As I predicted, Vonage was issued a stay in the Federal Court of Appeals and would not be shut down as a result of their litigation with Verizon. Vonage today stated that it views the Court of Appeals' granting of a temporary stay on Friday as the first step in resolving the matter in Vonage's favor. The temporary stay allows Vonage to continue to add customers and will will remain effective while the Appellate Court considers making the stay permanent. As I also predicted, "I think Vonage will most likely get a stay in the Federal Circuit Court of Appeals, but may have to incur daily penalties (issued by the court) for patent violations should they eventually exhaust all their legal options." It would appear this is the case, since Vonage was ordered to escrow a quarterly royalty of 5.5% and post a bond of $66 million to secure Verizon's damages.

According to Vonage's statement, "Vonage will continue to provide digital telephone service to existing customers indefinitely by paying into escrow a quarterly royalty of 5.5% throughout the appeals process.