Vonage says its business will not be affected

A permanent injunction was issued on Vonage using the technology to connect users to landline phones but it was stayed for two weeks pending an appeal. Vonage was told to pay $58m (�30m) to Verizon for infringing three patents, as well as royalties on future sales.

Vonage is a pioneer in the market for voice-over-internet telephony.

'Customer erosion'

This allows users to make cheap phone calls.

Vonage shares dropped 6% on the news of the injunction, which it is likely to appeal.

Some industry experts believe Vonage's phone services to its 2.2 million customers could be hit by its loss of the patent case.

But Vonage said that despite the injunction, its business would not be affected because it would switch to different technologies to connect customers.

Judge Claude Hilton said a permanent injunction was justified, on top of damages, since compensation alone did not prevent "continued erosion" of Verizon's client base.

Verizon - one of the largest telecoms firms in the US - argued that continued use of its patents would do "irreperable harm" to the firm in terms of customer defections.

Vonage argued that an injunction would be against the public interest.

In the original court case, Verizon claimed the violations cost it more than $280m while Vonage argued Verizon should not have been granted the patents in the first place.

Analysts believe the dispute has reduced loss-making Vonage's chance of being bought out.