Vonage has been ordered to pay Verizon US$58 million plus 5.5% per line in monthly royalties to Verizon for infringing on three patents relating to VoIP services, the Virginia Eastern District Court has ruled. The jury found five patents (from an original seven) to be valid but found the claim (rather than the patents) on two patents relating to billing, account management, and fraud minimization to be invalid. The jury also found that the infringement was not wilful, which would have tripled the award-maximum liability would have been in the region of US$197 million and 19% royalties claimed by Verizon.

The patents infringed cover call translation from the Internet to the PSTN, call waiting features, and Wireless VoIP handsets. Vonage also stated that it will immediately file an appeal and has argued that Verizon was not actively pursuing utilization of the patents until competitors such as Vonage came to market. Verizon has countered that it was unable to do so because of regulations in place at the time.

This is definitely a big blow to Vonage which is already struggling. Though the decision is going to be appealed, things don’t look good for this VoIP company.