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April 24, 2007

Vonage Off Hook

A few hours after hearing oral arguments, the appeals court (CAFC) granted Vonage reprieve from an injunction for infringing Verizon patents.

Claiming extinction if the injunction was not lifted, Vonage acting CEO Jeffrey Citron declared the situation now "business as usual." Vonage has a tab of $58 million for past damages, and an ongoing 5.5% royalty.

Vonage is aiming to upset Verizon's apple cart with a different claim construction on appeal.

Verizon lawyer Dan Webb exhibited a perverse hubris in suggesting that the injunction would put Vonage in the black by forcing Vonage to jettison its $400 million per year marketing budget. It was Vonage's successful pilfering of Verizon customers that incensed Verizon to begin with. Webb had no suggestion how Verizon might best Vonage competitively.

Naturally, Vonage stock boosted, by around 36%, rising $1.05 to $3.94, easing back from a high of $4.43 on profit taking.

Posted by Patent Hawk at April 24, 2007 2:34 PM | Patents In Business