Vonage Wins Permanent Stay in Verizon Patent Litigation

HOLMDEL, N.J., April 24, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- The U.S. Court of Appeals for the Federal Circuit in Washington D.C. today issued Vonage a permanent stay of a previous court's injunction that would have barred it from signing up new customers. Vonage sought the stay following an April 6th decision by the U.S. District Court in Alexandria, Va. enjoining the company from using certain VoIP technology to add new customers. The permanent stay enables Vonage to add new customers as we pursue our appeal. Existing customers remain unaffected by the company's ongoing patent litigation.

"We thank the appellate court for its thoughtful consideration of the merits of our case," said Jeffrey Citron, Vonage chairman and interim chief executive officer. "It's business as usual for us. We will continue providing reliable, quality digital phone service at the best value in the market and connecting thousands of phone calls every day. We remain focused on growing and strengthening our business and driving toward profitability."

Citron added, "We continue to believe we have not infringed on any of Verizon's technology and remain optimistic that we will ultimately prevail in this litigation."

Vonage will continue to serve existing customers by paying into escrow a quarterly royalty of 5.5 percent throughout the appeals process and by posting a $66 million bond as required by the court. The company's current cash position allows it to pay these fees to secure the stay as it continues to make progress on and pursues its legal appeal over the coming months.

Appeal

Vonage remains highly confident in the strength of its legal appeal.

"We believe the original verdict was based on an erroneous claim construction -- meaning the patents in this case were defined in an overly broad and legally unprecedented way," said Sharon O'Leary, Vonage's executive vice president, chief legal officer and secretary. "We believe the district court's decisions repeatedly neglected well-established law on claim construction and, as a result, artificially expanded the coverage of Verizon's patents well beyond what was intended by the patent trademark process."

O'Leary continued: "We are confident this error will be rectified by the appeals court, which hears intellectual property cases exclusively. As a result, we remain highly confident Vonage will prevail on appeal."

About Vonage

Vonage (NYSE: VG) is a leading provider of broadband telephone services with 2.4 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 voicemail -- for one low, flat monthly rate. Vonage's service is sold on the web and through national retailers including Best Buy, Circuit City, Wal-Mart Stores Inc. and Target and is available to customers in the U.S., Canada and the United Kingdom. For more information about Vonage's products and services, please visit http://www.vonage.com.

Vonage Holdings Corp. is headquartered in Holmdel, New Jersey. Vonage(R) 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 development of workaround solutions, its financial position and the likelihood of success on appeal. 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 inability to implement an effective workaround, potential claims by creditors, 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; our ability to manage our growth; the risk that VoIP does not gain broader acceptance; and other factors described in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended 12/31/06, and in our subsequent periodic reports filed with the SEC. 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.