By Sharla Sikes

It’s almost over—maybe—for the lawsuit embattled former VoIP industry leader Vonage.

Verizon and Vonage have been embroiled in a patent infringement suit for most of this year.

Verizon alleged in a $58 million suit that Vonage infringed upon two of its patents, regarding WiFi and name translation. Verizon’s 1997 patents protect its wireless VoIP devices and the translation of domain names and IP addresses, or how Internet calls travel over traditional phone lines.

In March, judges ordered a permanent injunction against Vonage and ordered it to halt new subscriptions, but an appeals court granted a stay and encouraged the two companies to find “middle ground.”

Vonage has been developing workarounds to fight its way clear of the lawsuit, and announced its success just as it also reported bittersweet second-quarter earnings.

“We have substantially completed the deployment of workarounds for the two name translation patents and have completed the development of the wireless patent workaround,” Vonage CEO Jeffrey Citron said on a conference call. “This is a significant step toward moving ahead with our business in the wake of the Verizon litigation.”

Lawyers say even if Vonage loses the suit, a permanent injunction is not justified. The company admits it loses 600,000 customers per year and would face bankruptcy without the ability to recruit new subscribers. Company officials remain optimistic that the workarounds—a third is in development—will be a permanent solution.

“The workarounds did not infringe on the Verizon patents as defined by the court,” Citron said, adding the Verizon litigation has so far cost the company $6 million. “We remain confident in the strength of our appeal.”

The U.S. Federal Court of Appeals is expected to rule in September. Also in September, a patent infringement suit against Vonage from Sprint Nextel will commence.

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