Vonage “the broadband phone company” has won a temporary stay from the US Court of Appeals, hours after it was barred from signing up new customers as punishment for infringing patents held by Verizon.

Judge Claude Hilton agreed with Vonage’s argument that if the company is denied new customers, it would be a disaster for its bottom line.

While Vonage is growing fast with about 2.2 million customers from 1.3 million in 2005, it loses at least 2 percent of its customers every month due to normal turn over, Vonage’s company lawyer Roger Warin said. Consequently, if Vonage can’t replace them, Warin predicted, the company could suffer a net loss of 650,000 customers a year.

Rich Tehrani, president of Technology Marketing at Vonage said, “If you’re not able to get those customers back, it makes life difficult.”

Verizon spokesman David Fish said the stay by the appeals court was “no surprise.” Verizon has until Friday to respond to the appeals court, which will decide whether to make its stay permanent.

“We are thrilled with the federal circuit appellate court’s decision and we look forward to presenting our case before them,” said Vonage spokeswoman Brooke Schulz. “This is about our customers and their right to great phone service at a great price.”

An industry analyst, who said Vonage’s business would face problems if the company could not add new customers while appealing the case, said the temporary stay was “unnecessary technically,” as Hilton was not expected to enter his ruling until Thursday, April 12.

Even if the appellate court ultimately agrees that Vonage can’t add new customers, Schulz emphasized that it still was providing service to its existing customers.

John Thorne, Verizon’s deputy general counsel, issued a statement praising Hilton’s decision for protecting “Verizon’s patented innovations while at the same time allowing Vonage to continue serving its existing customers.”

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Entry was posted on Sunday, April 8th, 2007 at 1:47 am under Legal, Technology.

Read more entries by Ruben Francia.
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