Vonage (like Europe) gets the Shaft

You may or may not have heard, that recently Verizon sued VOIP provider Vonage for patent infringement. You can read more about the case at Engadget, but in short, Vonage lost and had to stop using the technology they were infringing upon. To this Vonage said that their customers wouldn’t see a gap in service. It was a shame to see them in such trouble, but it sounded initially like things could work out if they were going to be able to get by without the patented technology.

However, in this article from Engadget, things aren’t looking so good for the VOIP provider. A District Court Judge, Claude Hilton, ruled that Vonage would not be allowed to sign up any new customers. Quite the death sentence it seems to me. I don’t even see how such a ruling could be handed down. In a free market economy how can a court decide that a company cannot try to attract new customers? I see that there should be a penalty for infringement, but I’d say disallowing the use of technology and paying damages sounds a bit more realistic, not to mention the fact that Vonage has already done that.

To top it all off the judge also put a $66 Million bond on the appeal. So, what began as a setback, that seemed to be recoverable, has turned into a potential death sentence. If they don’t win the appeal on this ruling, I doubt there will be much of a future for Vonage.