Vonage Internet Calls to Phone Lines Blocked by Judge

[David Farber <dave () farber net>]

Vonage Internet Calls to Phone Lines Blocked by Judge (Update4)
2007-03-23 13:17 (New York)


By Jeff St.Onge and Amy Thomson
     March 23 (Bloomberg) -- Vonage Holdings Corp., an Internet
phone-service provider, was ordered by a judge to stop using
Verizon Communications Inc. technology that allows customers to
make calls to standard phone lines.
     U.S. District Judge Claude Hilton approved Verizon's
request for a block today in Alexandria, Virginia. Hilton said
he won't sign the order before a hearing in two weeks on
Vonage's request for a stay. A jury found March 8 that Vonage
infringed three patents and should pay Verizon $58 million.
     Cash compensation ``does not prevent continued erosion of
the client base and the customer base'' of Verizon, Hilton said.
``The only hardship to the defendant is loss of revenue.''
     New York-based Verizon sued money-losing Vonage in June,
claiming it lured away more than 1 million Verizon customers by
copying voicemail and other services, as well as a method for
allowing Internet calls to reach traditional phone lines.
Vonage's sales more than doubled to $607.4 million last year.
     ``My impression is they have to shut down if they have no
workaround and that's obviously disastrous,'' said Clayton
Moran, an analyst with Stanford Group in Boca Raton, Florida,
who covers Vonage and doesn't own the shares. ``If they are able
to complete the workaround, it'll be an added cost.''

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