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Vonage says solution to patent dispute may be at hand

IP telephony carrier reports higher revenues and a possible break in its Verizon litigation headache

Fighting for survival, VoIP telephone carrier Vonage may be close to evading a permanent clampdown on its ability to do business. In its earnings conference call, Vonage chairman Jeffrey Citron said that the company is on the verge of shifting its operations to avoid conflict with three patented concepts owned and successfully defended in US court by rival conventional telephone carrier Verizon. "We believe we have workable designs for the two name translation patents and intend to begin deploying the solution to our customers shortly. In addition, we are continuing our development of the workaround for the wireless patent," Citron said.

The company also reported its highest-ever quarterly revenues, US$196 million on the just-completed period and substantially higher than the US$120 million recorded in the year-ago quarter. Vonage still operates at a considerable loss on an ongoing basis, despite its claim to well over 2 million active customer lines.

Even if Vonage successfully changes its business to steer clear of Verizon's technology, it may not yet be out of the woods. The company was hit with a US$58 million penalty and is currently required to make regular royalty payments to Verizon and maintain a sizable escrow account towards that end. Using different technology to deliver calls to and from Vonage customers in the future would not erase that past judgment. Vonage continues to operate without a permanent CEO-Citron had no substantial update on the company's leadership search and continues to act as interim CEO.

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