Vonage speaks out

"I'm not dead yet." --Monty Python

In light of the recent double whammy delivered Vonage by U.S. district courts – first a judgement finding in favour of Verizon Communications Inc. that will have Vonage pay $58 million plus 5.5 percent in royalties on future sales for copyright, then issuance of a permanent injunction against the company – surely folks at the VoIP provider are working overtime. Can you imagine what Vonage’s legal, PR and logistics departments look like right about now?

Currently, Vonage spin doctors are applying heavy damage control tactics in an attempt to reassure its 2.2 million-plus subscribers, including new mentions of “a disproportionately-negative reaction from the market.” (How long before the Vonagers take on the criticism and speculation in the media?)

Vonage CEO Mike Snyder broke out what is surely the most often-used cliché in such a situation, stating “To paraphrase Mark Twain, the rumors of Vonage's death have been greatly exaggerated. Friday's events represented one small step in what is sure to be a long legal battle.” Snyder stated that “The fact is we've been preparing for this verdict and the possibility of an injunction for months,” Snyder added. “For the market to react the way it did to the recent rulings shows an unfortunate lack of understanding of the judicial/appellate system, a lack of appreciation of Vonage's resourcefulness, or, perhaps, both.”

Except that Vonage has been steadily sinking pretty much ever since shares in the company were regularly traded on the New York Stock Exchange. Reuters, reporting on the earlier pro-Vonage verdict, noted that “Vonage … ranks as the worst-performing IPO in the past 15 months, according to analysts.”

The announced Vonage strategy will go as follows. The next step in the process would be the entering by the courts of a permanent injunction on April 6. Should the judge fails to grant the company's request to stay the injunction pending its appeal, Vonage will immediately file for a stay with the court of appeals for the federal circuit – the Vonage legal brain trust figures both calls to go against the company. Vonage has also reconfirmed its plan to file a notice of appeal to the circuit court of appeals with regard to the pricey $58 million decision.

According to Vonage’s defense team, “Verizon's overly broad construction of the patent claims was adopted across the board which is unprecedented, given the large number of claim terms.”

Vonage executive vice president/chief legal officer Sharon O’Leary, while simultaneously attempting to foster confidence among Vonage fans, displayed the wonderful cynical stoicism surrounding American due process: “No matter what happens on April 6, the reality is this litigation is going to take years to make its way through the legal system … once the case is up on appeal, we are confident that the appellate court will overturn the verdict based on the faulty claim construction of the patents involved.”

O’Leary claims that the circuit court of appeals reverses verdicts involving flawed claim constructions approximately forty percent of the time. Finally, proclaimed Snyder, “Anyone who's counting Vonage out is making a huge mistake.” Indeed; thus far, Vonage has proven as oddly persistent as the company’s koo-loo-koo-koo television commercial jingle.