SAN FRANCISCO - A US federal court said Tuesday Vonage can sign-up new customers while it appeals a conviction for violating patents of rival Verizon, giving the Internet telephony firm a critical reprieve.
The court agreed to extend a reprieve Vonage had already obtained immediately after a trial judge's decision in April to bar the company from taking on new customers, a situation analysts believe would choke the financial life from the firm.
The ruling by the US Court of Appeals for the Federal Circuit in Washington DC, stay's District Court Judge Claude Hilton's order until Vonage has finished appealing the verdicts.
"It's business as usual for us," Vonage interim chief executive Jeffrey Citron said in a statement thanking the appellate court.
"We continue to believe we have not infringed on any of Verizon's technology and remain optimistic that we will ultimately prevail in this litigation."
Verizon filed suit against the New Jersey-based, cut-rate Voice over Internet Protocol (VoIP) company in US District Court for the Virginia Eastern District in 2006.
Verizon, which has its headquarters in New York City, accused Vonage of infringing on five of its patents involving online telephony.
A two-week trial ended on March 8 with jurors finding that Vonage had infringed on three Verizon's patents.
The jury ordered the start-up to pay Verizon 58 million dollars for its transgressions and to pay Verizon royalties amounting to 5.5 percent of revenues if it continues using the technology.
Vonage said on Tuesday that it is paying royalties of 5.5 percent into an escrow account to be held for Verizon until the appeals process is exhausted.
Vonage depicted the trial verdict as a victory, emphasizing that Verizon had succeeded with only three of its claims and that the damages awarded were much less than the 197 million dollars Verizon asked for in court.
Vonage has appealed the award, arguing that Verizon is due no money in the case.
04/24/2007 19:45 GMT