U.S. District Judge Claude Hilton said on Friday that he will issue an injunction barring Vonage from using VoIP technology patented by Verizon Communications. However, Judge Hilton said he would delay signing the order by two weeks in order to give Vonage an opportunity to convince him the injunction should be stayed while the company appeals its entire case.
The move comes after a federal jury found Vonage had infringed on three key Verizon patents and ordered the company to pay $58 million in damages plus a 5.5 percent royalty on future sales.
Lawyers from Vonage expressed confidence the injunction will be stayed, either by Judge Hilton or the federal circuit court of appeals.
Judge Hilton rejected arguments from Vonage that any harm done to Verizon by Vonage’s continuing infringement of the patents was outweighed by other considerations, including the general public interest. According to Reuters, sealed documents filed with the court indicate Vonage would suffer “enormous business difficulties” if faced with an injunction, but Hilton agreed with Verizon’s assertions it would suffer irreparable harm if Vonage were allowed to continue to infringe on its technology.
Following Judge Hilton’s ruling, Vonage shares fell sharply in trading on the New York Stock Exchange. Vonage has been repeatedly described as the worst-performing IPO in recent memory, with shared initially offered at $17 a share routinely trading under $5. As of this writing, Vonage shares are trading at $3.26.
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