VONAGE HOLDINGS CORP

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1 VONAGE HOLDINGS CORP FORM 8-K (Current report filing) Filed 10/1/2007 For Period Ending 9/25/2007 Address 23 MAIN STREET HOLMDEL, New Jersey Telephone CIK Industry Communications Services Sector Services Fiscal Year 12/31

2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): September 25, 2007 VONAGE HOLDINGS CORP. (Exact Name of Registrant as Specified in Charter) Delaware (State or Other Jurisdiction of Incorporation) (Commission File Number) 23 Main Street, Holmdel, NJ (Address of Principal Executive Offices) (Zip Code) Registrant s telephone number, including area code: (732) (IRS Employer Identification No.) (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below): Written communications pursuant to Rule 425 under the Securities Act (17 CFR ) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR e-4(c))

3 Item Other Events. Sprint Litigation October 4, 2005, a lawsuit was filed against Vonage Holdings Corp. (the Company ) by Sprint Communications Company L.P. in the United States District Court for the District of Kansas. Sprint alleged that the Company infringed seven patents in connection with providing VoIP services. Sprint sought injunctive relief, compensatory and treble damages and attorney s fees in unspecified amounts. The Court issued an order holding that the Company s VoIP architecture does not literally infringe three of the asserted patents. As to the other asserted patents, the Court found that the Company s VoIP architecture does not infringe most of the asserted claims for inbound calls to the Company s subscribers. On September 25, 2007, after a trial on the merits, a jury returned a verdict in favor of Sprint, finding that the Company had willfully infringed Sprint's patents in providing its VoIP telephony services, and awarding $69.5 million in damages, which the jury found to be five percent of Vonage's revenues over the infringing period. A copy of the press release announcing the Sprint decision is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Verizon Litigation On June 12, 2006, a lawsuit was filed against the Company and its subsidiary Vonage America Inc., by Verizon Services Corp., Verizon Laboratories Inc., and Verizon Communications, Inc. in the United States District Court for the Eastern District of Virginia. After trial on the merits, a jury returned a verdict finding that Vonage infringed three of the patents-in-suit. The jury rejected Verizon s claim for willful infringement, treble damages, and attorney s fees, and awarded compensatory damages in the amount of $58 million through February The trial court subsequently indicated that it would award Verizon $1.6 million in prejudgment interest on the $58 million jury award. The trial court issued a permanent injunction with respect to the three patents the jury found to be infringed effective April 12, The trial court further granted a partial stay, pending appeal which permits Vonage to continue to service existing customers, subject to deposit into escrow of a 5.5% royalty on a quarterly basis. In addition, in April 2007, the Company posted a cash-collateralized $66 million bond, which reflected the $58 million jury award plus pre- and post-judgment interest and costs of $8 million, to stay execution of the monetary judgment pending appeal. On April 6, 2007, the Company filed an amended notice of appeal as well as a motion for a full stay pending its appeal with the United States Court of Appeals for the Federal Circuit ( CAFC ). The CAFC issued an order granting the Company s request for a stay pending appeal permitting the Company to continue to sign up new customers through the appeals process. On September 26, 2007, the CAFC partially remanded the jury verdict that the Company infringed three Verizon patents. The CAFC remanded the infringement verdict on the 880 patent and affirmed the verdict on the 574 and 711 patents. Further, the CAFC vacated the entire award of $58 million in damages and the 5.5% royalty. The CAFC remanded the case to the U.S. District Court and directed that the court retry those aspects of the original case. A copy of the press release announcing the Verizon decision is attached hereto as Exhibit 99.2 and is incorporated herein by reference. Item Financial Statements and Exhibits. (d) Exhibits 99.1 Press Release issued by Vonage Holdings Corp. on September 25, Press Release issued by Vonage Holdings Corp. on September 26, 2007.

4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. VONAGE HOLDINGS CORP. Date: October 1, 2007 By: /s/ Sharon A. O Leary Sharon A. O Leary Executive Vice President, Chief Legal Officer and Secretary

5 Exhibit No.: Description: EXHIBIT INDEX 99.1 Press Release issued by Vonage Holdings Corp. on September 25, Press Release issued by Vonage Holdings Corp. on September 26, 2007.

6 Exhibit 99.1 FOR IMMEDIATE RELEASE For more information, contact: Charles Sahner Vonage Vonage to Appeal Court Decision in Sprint Patent Suit HOLMDEL, NJ, September 25, 2007 Vonage announced that it will seek to overturn today s U.S. District Court jury verdict in a patent infringement lawsuit brought by Sprint Communications Company L.P. and continue focusing on providing reliable, quality digital phone service. Federal court jurors in Kansas City, Kansas, ruled in favor of Sprint, finding that Vonage had willfully infringed Sprint s patents in providing its VoIP telephony services, and awarding $69.5 million in damages, which the jury found to be five percent of Vonage s revenues over the infringing period. Vonage will ask the court to set aside the verdict, and if it is not granted, will vigorously pursue an appeal of the decision, including the underlying issue of liability and the willfulness aspect. Vonage believes any damages awarded are inappropriate. In addition, Vonage will seek to develop technological workarounds that don t infringe on Sprint s patents. 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. -more-

7 About Vonage Vonage (NYSE: VG) is a leading provider of digital phone services with 2.45 million subscriber lines. Our award-winning technology enables anyone to make and receive phone calls with a touch tone telephone almost anywhere a broadband Internet connection is available. We offer feature-rich and cost-effective communication services that offer users an experience similar to traditional telephone services. Our Residential Premium Unlimited and Small Business Unlimited calling plans offer consumers unlimited local and long distance calling, and popular features like call waiting, call forwarding and voic for one low, flat monthly rate. For more information about Vonage s products and services, please visit Vonage Holdings Corp. is headquartered in Holmdel, New Jersey. Vonage is a registered trademark of Vonage Marketing Inc., a subsidiary of Vonage Holdings Corp. Vg-a ### Page 2

8 Exhibit 99.2 FOR IMMEDIATE RELEASE For more information, contact: Charles Sahner Vonage VONAGE RECEIVES PARTIAL REMAND IN VERIZON PATENT LITIGATION Case Returns to Lower Court for Retrial; Vonage Continues Delivering Uninterrupted Service to Customers Holmdel, NJ, September 26, 2007 Vonage announced today that the U.S. Court of Appeals for the Federal Circuit today partially remanded a March 8th jury verdict in the U.S. District Court in Alexandria, Va. that the company infringed on three Verizon patents. The U.S. Court of Appeals for the Federal Circuit remanded the infringement verdict on the 880 patent and affirmed the verdict on the 574 and 711 patents. Further, the Court of Appeals vacated the entire award of $58 million in damages and the 5.5 percent royalty. The Court of Appeals remanded the case to the U.S. District Court and directed that the court retry those aspects of the original case. In light of the workaround technology that Vonage has developed and deployed, today s decision is not expected to have an adverse impact on Vonage s business and customers will continue to enjoy the same great service they have come to expect from Vonage. Workarounds to the 711 patent and the 574 patent have been deployed for awhile. -more-

9 Page 2 We thank the appellate court for its thoughtful consideration of the merits of our case, said Vonage s Chief Legal Officer, Sharon O Leary. We are pleased with the decision to vacate the 880 patent and the damages. However, Vonage remains confident that it has not infringed on the 880 patent a position we will continue to vigorously assert and look forward to presenting at trial. O Leary continued, In the meantime, it s business as usual. We have had our workarounds for the 711 and 574 patents in place for some time and will remain focused on providing a great customer experience. About Vonage Vonage (NYSE: VG) is a leading provider of digital phone services with 2.45 million subscriber lines. Our award-winning technology enables anyone to make and receive phone calls with a touch tone telephone almost anywhere a broadband Internet connection is available. We offer feature-rich and cost-effective communication services that offer users an experience similar to traditional telephone services. Our Residential Premium Unlimited and Small Business Unlimited calling plans offer consumers unlimited local and long distance calling, and popular features like call waiting, call forwarding and voic for one low, flat monthly rate. For more information about Vonage's products and services, please visit Vonage Holdings Corp. is headquartered in Holmdel, New Jersey. Vonage is a registered trademark of Vonage Marketing Inc., a subsidiary of Vonage Holdings Corp. Safe Harbor Statement This press release contains forward-looking statements regarding Vonage s litigation with Verizon and the deployment of its workaround technology. In addition, statements in this press release that are not historical facts or information may be forward-looking statements. The forward-looking statements in this release are based on information available at the time the statements are made and/or management's belief as of that time with respect to future events and involve risks and uncertainties that could cause actual results and outcomes to be materially different. Important factors that could cause such differences include, but are not limited to, our damaging and disruptive intellectual property and other litigation; our efforts to design around third-party intellectual property and implement such design arounds; our history of net operating losses and our need for cash to finance our growth; the competition we face; our dependence on our customers existing broadband connections; differences between our service and traditional phone services, including our 911 service; uncertainties relating to regulation of VoIP services; system disruptions or flaws in our technology; the risk that VoIP does not gain broader acceptance; and other factors that are set forth in the Risk Factors section, the Legal Proceedings section, the Management's Discussion and Analysis of Results of Operations and Financial Condition section and other sections of Vonage's Annual Report on Form 10-K for the year ended December 31, 2006, as well as in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, and therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. Vg-a ###

VERIZON COMMUNICATIONS INC. (Exact name of registrant as specified in its charter)

VERIZON COMMUNICATIONS INC. (Exact name of registrant as specified in its charter) Page 1 of 9 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: October