Vonage’s appeal was rejected by a U.S. appeals court, and so troubled VOIP provider Vonage will have to pay $117.5 million to Verizon as punishment for infringing their patents. In addition, Vonage will be required to donate 2.5 million to charity. Ouch, ouch, ouch.
Vonage settled the infringement suit on Oct. 25 after Verizon won both a jury verdict and an appeal in the case. The accord left open the amount to be paid until the appeals court decided whether to grant Vonage’s request for reconsideration.
Legal costs have eaten into Vonage’s cash flow and may increase its risk of bankruptcy. The Holmdel, New Jersey-based company said yesterday that it may not have enough money to pay $253.5 million in debt due as early as December 2008. Vonage, which generated cash of $22.5 million in the third quarter, will try to restructure the debt.
Meanwhile, Verizon’s lawyers formed a giant robot and fought bunch of dragons, as is their habit.