March 8th, 2007
Jury to Vonage: pay Verizon $58 million. What do you think?
A Federal jury today ordered Vonage to pay Verizon $58 million for patent infringement. The jury found that Vonage had infringed on three of the five patents Verizon accused its rival of doing.
The payment, which will be appealed, is exactly one-thirds that of the $197 million Verizon had requested. The reason for this is that the jury did not find that the infringement was willful. That degree of infringement is often assessed as triple damages.
Verizon had requested that the use of the allegedly infringed patents by Vonage should result in elelents of Vonage's being shut down pending settlement. That matter will be addressed in another court hearing two weeks from today on March 23.
"This is a significant victory for Verizon," company attorney Dan Webb, told reporters. "It shows that companies that infringe patents can be held liable."
In a statement, Vonage said it was pleased that the jury had rejected Verizon's claims that it infringed on two patents, and that it expected the verdict on the other three to be reversed on appeal.
Tension around the verdict affected Vonage stock today. The stock price plunged to an all-time low of $4.50 a share a little more than an hour before the Nasdaq closed, but the price rebounded to $4.86 a share at the close.
That could have meant either that Vonage investors were relieved that the judgment was not as severe as it could have been, or that bargain-sensing buyers lined up at the queue in the last hour of trading.
We haven't heard the last of this dust-up. It could go on for years.
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Russell Shaw is an enterprise computing journalist, analyst and author based in Portland, Oregon. See his full profile and disclosure of his industry affiliations.
