Vonage Working Around Verizon Patents

In its quarterly earnings report, VoIP provider Vonage says it'll soon be ready to deploy workarounds for key Verizon patents it was found to be infringing.

In a statement released with its quarterly earning numbers, Vonage CEO Jeffrey Citron says the company is working on implementing workarounds for key Verizon patents Vonage was found to be infringing.

“We believe we have workable designs for the two name translation patents and intend to begin deploying the solution to our customers shortly,” Citron said. “In addition, we are continuing our development of the workaround for the wireless patent.”

The translation patents refer to techniques for converting telephone calls between traditional phone numbers and IP addresses; the wireless patent covers ways to place wireless phone calls, including originating them via the Internet. The three Verizon patents cover concepts and techniques central to Vonage’s business; in March, Vonage was found to be infringing on the patents, and in April the case’s judge barred Vonage from signing up new customers. However, Vonage won a stay and has been allowed to continue operations while the case wends through the appeals process. The patent battle has raised serious doubts about the future of the company, although implementation of a viable workaround would be a strong step towards restoring confidence in the company.

“We have battled through an extremely difficult quarter and will continue the fight in the courtroom,” Citron said. “While the patent litigation has challenged our business, it has not distracted our focus on providing consumers with the opportunity to choose a better phone service.”

For the quarter, Vonage was able to grow its revenue to $196 million, which helped lower its operating loss for the quarter to $58 million, a 20 percent improvement after the $73 million loss the company recorded for the same quarter last year.