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Vonage gets injunction stay made permanent

Still confident of victory, but squirreling away cash just in case

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The US Court of Appeal has granted an indefinite stay on the injunction which threatened to prevent Vonage signing up new customers while its patent row with Verizon drags on - meaning the company might just remain viable.

Vonage has agreed to pay a 5.5 per cent royalty payment into escrow, as well as posting a $66m bond, which should cover its liability to Verizon if the case goes against it.

"We believe the original verdict was based on an erroneous claim construction - meaning the patents in this case were defined in an overly broad and legally unprecedented way," said Sharon O'Leary, Vonage's executive vice president, chief legal officer, and secretary.

An extension to the stay was essential if the company wasn't going to be driven out of business before the patent spat was over. VoIP services suffer very high churn rates, and if Vonage wasn't able to sign up new customers, there would be little left to sue by the time the case was settled. ®

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