A federal jury has ordered Vonage Holdings Corp. to pay $69.5 million in damages for infringing on six telecommunications patents owned by competitor Sprint Nextel Corp.
Vonage also will have to pay a 5 percent royalty on future revenues. If neither this decision nor Vonage's Verizon patent infringement decisions are overturned, 10.5 percent of Vonage's recurring revenue will have to be paid out in damages to Verizon and Sprint together.
The upfront damage awards are hefty enough. The recurring 10.5 percent of gross revenue that will be lost might be more significant.
Vonage says it would appeal the decision but would also begin developing technological workarounds that it said would skirt the disputed technology.
Earlier this year Vonage also was ordered to pay Verizon $58 million in damages plus 5.5 percent royalties on future revenues. That decision also is under appeal.
Between the distractions (getting the work-arounds into place; the cost of further appeals), vigorous competition from cable companies and the damage payments, I suppose one now has to wonder whether Vonage can pull out of a dangerous spiral.
1 comment:
Hi Kim:
What do u think is going to happen with all these VOIP services providers? Why are the bigger telco's targeting the VOIP service provders. Does it mean, big telco's see these VOIP service provider as a big threat to them.
I still feel VOIP is going to stay.
Cheers,
Omfut
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