Vonage Ordered to Pay $69.5M to Sprint

Internet telephone company Vonage Holdings Corp. may be in big trouble after being ordered in federal court Tuesday to pay Sprint Nextel $69.5 million in damages for infringing on six telecommunications patents owned by Sprint Nextel Corp. In addition, jurors awarded Sprint Nextel a 5% royalty from Vonage on future revenues. Vonage said in a written statement that it would appeal the decision but also would begin developing workarounds so it won't need to use the disputed technology.

"We are disappointed that the jury did not recognize that our technology differs from that of Sprint's patents," said Sharon O'Leary, chief legal officer for Vonage. "Our top priority is to provide high-quality, reliable digital phone service to our customers." On the other hand, Matt Sullivan, a spokesman for Reston, Va.-based Sprint., said the company was "extremely pleased" with the verdict and that Sprint plans to ask U.S. District Judge John Lungstrum for a permanent injunction against Vonage using the patented technology. Greg Gorbatenko, a telecommunications and media analyst for Jackson Securities, said the decision "feels like a death knell" for Vonage because future revenue will likely dry up, preventing the company from investing in better technology or improving customer service.

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One might think that VoIP for consumers is down for the count – with the Sunrocket meltdown and now this legal mess with Vonage leaves one pining for a provider who has been around and won’t get knocked out the box. I asked my IT geek friend what they liked and they told me about Net2Phone. Unlike almost all the other guys – this company has been at this for about 10 years and they are well funded (big IDT owns them). He also said that now because of all the uncertainty – they are running a special try/ buy offer. Try them for 3 months free and then it is just $19.95/ month – plus you get to keep your phone number. It’s better than paying the big telco’s lots of $$$ every month.

Also—I have a lot of family overseas and have been blown away by the options for international calling – not only really cheap international rates – but you can get a local phone number in a huge number of countries. Most of my family is based in Brazil – they dial a local call to my Brazil number from Net2Phone and it gets to me here.

C'mon stupid Sprint, "permanent injunction against Vonage using the patented", atleast let them rent it for a while,... I hate lame cold war,...


hmm... wonder if it is time to press Vonage in to canceling my service (w/o penalty) since they won't have any money to improve their network or customer service.

Either they will be paying Sprint out the arse for years or spending all their money on court costs.