Vonage to Dodge Verizon with VoIP, Inc.

Earlier this month, VoIP operator Vonage was found to be in violation of three Verizon patents covering core aspects of its service. Although Vonage will undoubtedly appeal the case, the company is facing an a ruling on an injunction April 6 which could prohibit it from using the patented technology in its business; if the injunction is approved, it could do bad things for Vonage—although the company continues to assure customers they will not see any disruption in service.

Part of Vonage’s contingency plan has come to light by way of an 8-K filing with the Security and Exchange Commission, wherein VoIP Inc. admits to having entered into a two year deal to provide network services for Vonage. The service would likely be labelled under VoIP’s Voiceone carrier services brand, which offers protocol-agnostic IP services to a variety of clients over its own network, focusing an telecommunications needs.

VoIP will receive money from Vonage based on the amount of network services provided to the company; after two years, the companies will have the option of continuing the arrangement on a month-to-month basis.

If a judge approves a permanent injunction barring Vonage from using Verizon’s patents while the case is sorted out, the deal with VoIP, Inc. would at least keep Vonage’s network operational: two of the three patents Vonage was found to have violated revolve around connecting VoIP calls to public switched telephone networks. The third patent concerns Wi-Fi phones; Vonage doesn’t need an immediate step-in replacement for that technology in order to keep its business operational.

Vonage’s agreement with VoIP will keep the company operational in the even of a permanent injunction, but also represents an ongoing financial commitment as the struggles with existing, ongoing fiscal challenges.

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