Vonage Loses Sprint Case

Vonage (VG) shares hit a new low as the Net calling shop was slapped with another patent infringement setback.

A jury found Vonage had infringed on six of Sprint's (S) patents and said the company should pay $69.5 million in damages and a 5% royalty on future revenue, according to a Bloomberg report.

Vonage pledged to appeal.

"We are disappointed that the jury did not recognize that our technology differs from that of Sprint's patents," said Sharon O'Leary, chief legal officer for Vonage. "Our top priority is to provide high-quality, reliable digital phone service to our customers. Vonage has already demonstrated that it can keep its focus on customers and on its core business while managing ongoing litigation," she added.

Earlier this year, in another patent lawsuit, Vonage was hit with a $58 million penalty and told to pay Verizon (VZ) 5.5% of its revenue.

Vonage is appealing the Verizon decision and was granted a stay of an injunction that would have prevented the company from signing on new phone customers.

The Holmdel, N.J., voice-over-the-Net venture has seen a steady slide in its market value ever since its IPO in May 2006.

The news was not well received by Level 3 (LVLT) investors, who saw their stock slip 9 cents to $4.53. Vonage is a top customer to the wholesale network operator and contributes about $10 million a quarter to Level 3's top line.

Vonage shares were halted at midafternoon with the stock down 15 cents, or 8%, at $1.81.

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