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Optical/IP

Vonage Wins Stay

The U.S. Court of Appeals for the Federal Circuit in Washington D.C. today said Vonage Holdings Corp. (NYSE: VG) can continue to sign up new customers while it appeals its patent infringement case against Verizon Communications Inc. (NYSE: VZ). (See Vonage Wins Stay.)

This wasn't that big a surprise, considering that the Appeals Court had almost immediately weakened the U.S. District court's first ruling by granting the company a temporary stay only hours after it was handed an injunction to stop signing up new VOIP customers. (See Vonage Dissed at Injunction Junction and Appeals Court Lifts Vonage Injunction.)

Shares of Vonage were up $0.96 (33.22%) to $3.85 in late afternoon trading on the first positive news Vonage has received in a long time.

"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 Vonage's chief legal officer Sharon O'Leary, in a statement released today. "We are confident this error will be rectified by the appeals court, which hears intellectual property cases exclusively. As a result, we remain highly confident Vonage will prevail on appeal."

The oral arguments for the appeals case will take place on June 25, with three briefings scheduled before then. Vonage must submit its brief by May 9, and Verizon must counter by May 23. Vonage must then reply by May 30 before the official hearing in June.

"The Court of Appeals set a very short schedule for hearing Vonage's appeal," says Verizon's senior vice president and deputy general counsel, John Thorne. "The expedited schedule will accomplish the same thing that a partial stay of the injunction pending a longer appeal would have accomplished -- limiting Vonage's infringement during the appeal.

"An appeal could have taken a year or longer; now it will be argued in just two months," Thorne says. "We expect the unanimous jury verdict of infringement will be upheld."

— Raymond McConville, Reporter, Light Reading

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