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Vonage Reassures Users: Says Market Overreacting |
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Written by Adam Gosling
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Tuesday, 27 March 2007 |
Embattled American Broadband phone company, Vonage remains upbeat
despite getting a worse case scenario result in its court case against
Verizon.
Last week a US court jury found that the company had illegally used
technology, owned by US cable company Verizon, to deliver its services.
Although the company has vowed to appeal, it was hoped the court would
stay an injunction against it using the technology until the the appeal
could be heard.
Unfortunately for he company which seems to be having a run against it
since an unpopular float saw investors disappointed by a massive
post-listing stock plunge is struggling to reaffirm its confidence,
hang on to its 2.2 million customers and keep the share price from
tanking completely.
"To paraphrase Mark Twain, the rumors of Vonage's death have been
greatly exaggerated," said Mike Snyder, Vonage's chief executive
officer. "Friday's events represented one small step in what is sure to
be a long legal battle.
"The fact is we've been preparing for this verdict and the possibility
of an injunction for months," Snyder added. "For the market to react
the way it did to the recent rulings shows an unfortunate lack of
understanding of the judicial/appellate system, a lack of appreciation
of Vonage's resourcefulness, or, perhaps, both. Anyone who's counting
Vonage out is making a huge mistake."
If, as expected, the judge enters a permanent injunction against Vonage
on April 6, 2007, but fails to grant the company's request to stay the
injunction pending its appeal, Vonage will immediately file for a stay
with the Court of Appeals for the Federal Circuit. In addition, the
company reconfirmed its plan to file a notice of appeal to the Circuit
Court of Appeals to set aside the jury verdict which was handed down on
March 8, 2007.
"No matter what happens on April 6, the reality is this litigation is
going to take years to make its way through the legal system," said
SharonO'Leary
, Vonage's executive vice president and chief legal officer. "We are
optimistic the trial court judge will stay the injunction. If he
doesn't, however, we're very confident the Circuit Court of Appeals
will stay the injunction through the entire appeal process.
"And once the case is up on appeal, we are confident that the appellate
court will overturn the verdict based on the faulty claim construction
of the patents involved." The Circuit Court of Appeals, which will hear
the case shortly, has reversed prior verdicts involving flawed claim
constructions approximately 40 percent of the time, noted O'Leary.
Verizon's overly broad construction of the patent claims was adopted
across the board which is unprecedented, given the large number of
claim terms.
Vonage's accomplishments continue to validate its business model and
strategy. The company has achieved 19 consecutive quarters of double
digit revenue growth, doubled revenues to US$607 million in 2006 alone,
and added nearly 1 million net subscribers last year said a company
statement.
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