Vonage, the beleaguered VoIP service provider is in court today, trying to defend its position that it doesn’t infringe on Verizon’s patents. If Vonage loses, then things get really tough for the company, which has claimed that it has developed a workaround Verizon patents, and can still stay in business.
If the three Verizon patents – there are some questions about their validity – could cost Vonage about $66 million in back payments and 5.5% royalty. If workaround doesn’t pan out, there are some who are thinking bankruptcy and liquidation. Vonage (VG) is trading at $3 a share this morning.
These are desperate times for Vonage: it is losing a lot of customers, otherwise why else would it offer a $3.99 a month (for a year) deal to the defectors. Judi Sohn, a defecting customer, sums it up best when she writes, “Getting garbage at discount still stinks.”