Struggling voice over IP provider Vonage has been hit with millions more in damages after a US court ruled its services infringe on Sprint Nextel patents.
Jurors in a Kansas court have decided Vonage wilfully infringed on Sprint's patents and awarded Sprint $69.5 million in damages, which is 5 percent of Vonage's revenue during the infringing period.
Vonage plans to ask the court to set aside the verdict. If that fails the company will appeal. In the meantime, Vonage will also develop workarounds that don't require Sprint's patents, it said.
This is the second legal blow to Vonage this year. A court found earlier this year that Vonage infringed on Verizon's patents. That case came with an injunction that would have prevented Vonage from signing up new customers, but Vonage won a stay and is appealing the original infringement ruling.
Although it's clearly more bad news for Vonage, the appeals could change everything, said Seth Ostrow, a partner specialising in patents at the law firm Dreier. "Often there are mistakes made during various stages of a case that form the basis for a successful appeal, and that, coupled with the statistics, gives reason to think that Vonage has a significant chance of getting this changed," he said. Statistics show that patent cases often get changed on appeal, he said.
In August, Vonage said it had nearly completed rolling out workarounds for two of the three patents claimed by Verizon. Still, the Verizon case alone appears to have slowed growth for the company, the largest independent VoIP provider. In its second quarter this year, Vonage added 57,000 customer lines, compared with 256,000 in the same quarter in the previous year.
Vonage has said that Verizon pursued the lawsuit in an effort to eliminate a competitor.