Future looking very uncertain

Vonage has been refused leave to appeal in its patent spat with Verizon and will have to pay out $120 million in damages.

The judge at the U.S. Court of Appeals for the Federal Circuit denied the application for an appeal and the company will now pay $117.5 million to Verizon and an additional $2.5 million to charity.

The fine was levied after a court found Vonage had violated three patents owned by Verizon regarding VoIP and call features.

"We were not surprised, but disappointed that the court denied our request for a rehearing of the case," Vonage spokesman Charlie Sahner told Bloomberg.

"We are pleased to continue putting litigation behind us."

Vonage has had a difficult few years financially. The price at its initial public offering was at $17 per share but this fell by over 20 per cent on the first day's trading and currently the price stands at just over $2.

The firm has already said it may not be able to meet its obligations over debt, with potentially $253.5 million in due by December 2008.

The company settled an earlier patent dispute with Sprint Communications with a payout of $80 million.