Vonage Wins Permanent Court Stay in Verizon Patent Fight

Internet phone company Vonage Holdings Corp. said on Tuesday a federal appeals court permanently stayed a lower court order that barred it from signing up new customers.

A federal district court on April 6 said Vonage could not add new customers because of a finding that it infringed patents held by Verizon Communications Inc. for making phone calls over the Internet.

The latest ruling came about two hours after the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. heard arguments from lawyers representing Vonage and Verizon.

Vonage shares jumped nearly 49 percent after the announcement of the decision.

Each side answered questions for about 45 minutes. However, the judges gave no indication at the hearing which way they would rule. A court clerk later confirmed that the stay had been granted by the court.

"In layman's terms, it means business as usual," said Brooke Schulz, a spokeswoman for Vonage.

Vonage said it will continue to serve existing customers and is putting funds into a reserve as required by the court.

The stock soared to $4.42 on the New York Stock Exchange, after earlier sliding to a 52-week low of $2.83.

(Additional reporting by Peter Kaplan in Washington, and Sinead Carew in New York)

Copyright 2007 Reuters Limited.

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