From MSN Money... link to story

Vonage hit by court setback
Internet-phone company Vonage (VG, news, msgs) received some static Tuesday afternoon when a federal jury in Kansas City, Kan., ordered the company to pay nearly $70 million in damages to SprintNextel (S, news, msgs) for infringing on a patent. In 2005, Sprint sued Vonage for infringing on seven patents used to connect Internet phone calls.

"We are disappointed that the jury did not recognize that our technology differs from that of Sprint's patents," Vonage Chief Legal Officer Sharon O'Leary said in a statement. Vonage said it would appeal the decision.

Vonage was also ordered to pay a 5% royalty to Sprint on future sales.

This was the latest setback for Vonage, which had to pay Verizon (VZ, news, msgs) $58 million in damages and 5.5% of royalties for infringing on one of its patents back in March.

Shares of Vonage have plunged 89% since the company went public in May 2006, as of Tuesday's closing price. Shares of the stock were up 7 cents to $1.37 in pre-market trading today.

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