Vonage Told, “No New Customers For You!”

The beating Vonage has been taking in the courts over patent infringement is nothing less than staggering. The latest news from the bench paints the picture for the future of the company even more starkly.

A judgment passed by magistrate Claude Hilton Friday ?bars Vonage from signing up new customers.? If that is not reason for Vonage to worry about its future, it?s difficult to image what, if anything, would faze the company?s executives and managerial body. The decision by Hilton to issue an injunction against the VoIP provider shows that the hill it has been made to climb throughout its battle with Verizon just got much more vertical in grade.

The fight is currently being waged between big and small because methods and technologies used by Vonage are said to violate several key patents Verizon owns. The court issued a ruling against Vonage prior to Friday?s injunction for the same unlawful activity in which the judge requested that Vonage change its methodology within a grace period and demand Vonage pay Verizon for the infringement. Vonage stated it would appeal that decision.

Now Judge Hilton has ordered Vonage unable to sign new customers, effectively halting any potential growth for the company and all but forcing Vonage to respond with changes to its data transmission processes, or else face rather dark days, and those would be experienced not only at HQ but by its entire customer base as well.

The decisions laid out against Vonage in recent months don?t offer good signs for VoIP providers in the US. Whether it is Vonage standing as the phone service provider - or Skype or Gizmo Project - the nation?s largest telecoms may now choose to investigate any number of small entities for similar questionable activity.

Because Vonage is the most visible of US-based VoIP providers, Verizon had incentive to look for wrongdoing. Now that it has rather quickly paralyzed Vonage from moving forward without addressing the issues it?s been forced to contend with, there?s now a real possibility that the [nearly] victorious giant in this courtroom clash will wish to ?peer into the souls? of startups to see where it can inflict damage. Regardless of the clear need for patent law reform, a company?s bottom line is a company?s bottom line, and if an organization can benefit from the downfall of another through legal means, it will work to produce such an outcome. Vonage is in Verizon?s crosshairs now. Who?s next?

Update: Vonage won an emergency stay on Friday, Apr 6th, allowing the company to sign new customers while the battle in court remains active.

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