Internet phone company Vonage suffered a major setback Tuesday when a federal court ruled that it has infringed six patents owned by rival Sprint Nextel and should pay $69.5 million in damages to make up.
The New Jersey-based Vonage suffered this second legal setback following the March ruling when it was ordered to shell out $66 million to Verizon Wireless. That time Vonage had also been asked to pay 5.5 percent royalty of future revenues. This time it has been asked to pay 5 percent royalty to Sprint.
The company said that it was appealing against the Verizon decision and would also be appealing against the Sprint one.
"We are disappointed that the jury did not recognize that our technology differs from that of Sprint's patents," said Sharon O'Leary, chief legal officer for Vonage. "Vonage has already demonstrated that it can keep its focus on customers and on its core business while managing ongoing litigation."
The Sprint lawsuit was filed in 2005 with the company claiming that Vonage had infringed several patents involving voice-over-packet telephone services. Sprint spokesman Matt Sullivan said the verdict was just, "This verdict underscores the strength of our voice-over-packet portfolio and reinforces the importance of the innovations developed by our employees," he added.
In the backdrop of this verdict, Vonage shares took a 34 percent hit, but recovered to rise 6 percent in after-hours trading.
