Vonage Holdings was smacked with its second legal setback in two days when the U.S. Court of Appeals for the Federal Circuit on Wednesday upheld a lower-court ruling that the Internet-voice provider had infringed two patents held by Verizon Communications.
The decision came a day after a federal jury in U.S. District Court in Kansas City, Kan., found that Vonage infringed six Sprint Nextel patents and ordered the Internet-phone company to pay $69.5 million in damages. Vonage said it plans to appeal that ruling.
...
In a note issued after the appeals court ruling, Stifel, Nicolaus & Co. research analyst Rebecca Arbogast wrote, "On balance, we view this as bad news for Vonage because the court upheld the judge's patent construction and the injunction [on the two patents], which cover the [voice-over-IP to public phone network] connection and calling features, and thus go the core of Vonage's current business."
The key question now, Arbogast added, is whether Vonage's workarounds "will survive scrutiny by Verizon."
[MORE]