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To understand why cable operators or any other VoIP provider might be vulnerable to future Verizon litigation, the patents themselves must be examined. The first two patents, U.S. Patent 6,282,574 and U.S. Patent 6,104,711, define the process by which VoIP traffic is handed off to the traditional Public Switched Telephone Network (PSTN). Specifically, U.S. Patent 6,282,574 explains the process of mapping numerical IP addresses to textual domain names, like in an e-mail address such as maggie.reardon@cnet.com, and eventually to a phone number. This mapping process makes it possible for a Vonage customer to call someone whose phone service is on a traditional phone network.
U.S. Patent 6,104,711 explains how a service provider can offer advanced calling features like call waiting, caller ID and three-way calling on a packet network. This patent describes the process of translating an IP address to a textual domain name and eventually to a phone number to provide these enhanced services for people using a VoIP service.
The third patent, U.S. Patent 6,359,880, covers how public wireless and cordless Internet gateways communicate with the Internet. This patent describes the business process that allows users to make and receive VoIP phone calls over a short-range wireless network, such as one using standard Wi-Fi equipment.
professor, The Wharton School of Business
The actual patents can be accessed online using the patent numbers through the U.S. Patent and Trademark Office.
Depending on how broadly the first two patents are interpreted, they could apply to just about any VoIP service that allows people to make phone calls from a packet network to a regular phone network, say some experts. This includes services, like the digital voice services that cable operators offer. It would also include services like SkypeOut, which allows people to make calls from their computers to a cell phone or landline phone, or SkypeIn, which allows people to receive phone calls from regular phones on their PCs.
But patent experts say that reading the patents as they've been filed with the U.S. Patent Office provides only part of the picture. In patent litigation, judges hold what is called a Markman hearing before the trial begins to determine the meaning and scope of the patent claims in dispute. It is in this hearing that the judge determines how broadly the patents will be applied. In this particular case, the court has sealed the judge's Markman decision, making it impossible for anyone in the public to truly understand exactly how broadly these patents have been interpreted.
During a conference call on Thursday, Sharon O'Leary, Vonage's chief legal officer, said that U.S. District Judge Claude Hilton had "artificially expanded the coverage" of the patents during this hearing. She claimed that both parties were very limited in the information they could supply to the judge and that the hearing, which typically takes days, was decided in little over an hour.
Patent confusion
She also said that the judge ignored and neglected to address certain terms during the hearing that had been in dispute. For example, she said the judge included in his interpretation of U.S. Patent 6,359,880 wireless devices that transmit signals wirelessly hundreds of feet, which would essentially include all Wi-Fi-enabled devices and hotspots. Vonage would argue that the patent is referring only to devices that transmit wirelessly in close range, which would not necessarily include Wi-Fi devices and Wi-Fi hotspots. The judge also construed the term server to mean a collection of devices as opposed to limiting the meaning to a single device, O'Leary said.
Rosenblatt said that Vonage has a decent chance of winning its appeal.
"It looks as though the Markman claims are astonishingly broad," he said. "So the first thing they need to do is challenge the scope of those claims. The second thing is there was a lot of prior art, or other patents filed before the Verizon patents, so there is a chance Vonage could challenge the validity of the patents."
Vonage has said that it plans to challenge the Markman decision, the patents' validity, as well as the jury's decision. Those appeals are all still pending.
Many economists and legal experts say the Vonage case is a good example of how confusing and dysfunctional the U.S. patent system has become. During the past decade, there have been thousands of patents filed pertaining to VoIP technology. Experts say it's almost been impossible for the patent office to keep up with the flood of patents being filed.
"Patent litigation has become a real wild card in American business, especially in the high-tech and communications industries," said Gerald Faulhaber, a professor in the business and public policy department for The Wharton School of Business at the University of Pennsylvania. "It has gotten out of control. People are getting patents for all kinds of crazy stuff."
The other major issue with the current patent system, experts say, is that decisions surrounding these highly technical patents are dealt with in the regular court system and decisions are made by lay juries who likely have no technical background.
"We often think of telecom policy in the U.S. as being set by the Federal Communications Commission or sometimes state regulatory agencies," Wu said. "But the courts are also exerting a lot of power too, and their decisions are based on questions of law. They have nothing to do with looking at the state of competition in a particular market."
He added. "It will be a disaster for the entire telecom industry if the fate of VoIP is determined by patents and the strangeness of our patent system."
See more CNET content tagged:
Vonage Holdings Corp., cable industry, VoIP service, patent, VoIP
I don't think they will stop with cable companies either. This is nothing but bad for VoIP and IP Telephony.
Think of this, Vonage does what most IP PBX do except on a larger scale (gateways / billing / Call Control, user management) I don't think its too much of a stretch for VZ to suggest that any VoIP communications that touch the PSTN is covered under their patent.
I am a satisfied Vonage customer in spite of their shaky business plan. But if Verizon can attack ANY VoIP patents then I can't change to Comcast cable "digital voice" or anyone else except Verizon! Monopolies like that is why I dumped my telephone company!
the article say, so do cable operators. What "monopoly" does
Verizon have? If people don't want POTS they can rely on cell
phones. If they don't like either of those they can use Voip.
The problem isn't some mythical monopoly, it is the ridiculous
patent laws. Government is the source of this problem.
And BTW, the cable companies have all the opertunity in the world to fire right back with lawsuits against Verizon's FIOS offerings. In many cases the break local, state, and FCC regulations when installing their 3 product offerings.
You see it's like this.
I want good value for my money. Verizon stopped offering that some time ago. I can't say when exactly Verizon stopped treating me like a paying customer and started treating me like they were milking a cow but it's just not a good feeling.
Oh enough paying customers leave and the companies you sued can buy your carcass and get on with life.
That's not to say I like what we're all seeing happen with the patent system, but I just don't think you'll see people leave.
Let's face it. Verizon has a darned good wireless network. In my case, they're the only company I've signed up with for a second 2-year term.
Hopefully, at some time in the future they'll provide decent competition against the cable companies for television, as well as high speed internet, be it FIOS or DSL based.
I don't much care for this litigation of theirs, but I don't think you're going to see people leave.
Charles R. Whealton
Charles Whealton @ pleasedontspam.com
Hardware can potentially use some sort of telephony software such as Microsoft's or any software company. It even goes beyond VOIP since the patents are so broad.
This is hardcore Internet and seems central to the recent open source patent disputes, for instance: like Software as a Service Innovations.
Modems, Microsoft, HD radio tuners all use waiting and switching processes like this at some level. This is a large software patent issue I think. This needs to be clarified in the higher courts I hope quickly.
Hopefully the price could drop to at least 1% though rather than 5%. But is this right? I hope there is some help for Vonage out there as they really don't deserve to suffer like this all alone.
Another fascinating case. I can't wait to see what the higher courts think on the 24th., when more information is gathered.
I am a satisfied Vonage customer in spite of their shaky business plan. But if Verizon can attack ANY VoIP patents then I can't change to Comcast cable "digital voice" or anyone else except Verizon! Monopolies like that is why I dumped my telephone company!
The bigger issue at hand here is that Judges in the legal system, and the legal system itself for that matter are so far behind the times and so high tech illiterate. Additionally the patent system suffers quite a bit from illiteracy when it comes to the ether world.
usually they are trying to figure out ways to decrease service and increase fees!
Those that can't sue.
I strongly suggest that CNET look carefully at this issue and the list. Some of the names listed do NOT do business in the way Vonage does. Ergo they do not infringe upon the kind of patent Verizon holds. Indeed some of the listed companies own MANY patents of their own.
Since some of these companies have listed stocks and some are relatively small, giving misleading suggestions can have dire ramifications.
1) VOIP removes the requirement to pay the government imposed taxes so consumers move to voip providers.
2) Traditional phone companies are slow to respond and compete.
3) A suit is filed which now threatens VOIP providers.
This story can't end well.
- Combatting Frivolous Lawsuits
- by ogman April 16, 2007 4:55 AM PDT
- The best way to combat frivolous lawsuits by companies that do nothing with patents and then want to get paid for them is to boycott the company. Verizon is an excellent target for this type of action, since they have basically abused their customers for year anyway. Cancel your services with them and when they ask why you are leaving, tell them.
- Like this Reply to this comment
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(25 Comments)Verizon is only taking this action because they are bleeding customers. For years they operated under the "a little less than good enough" only providing improved services when the churn rate finally hit panic inducing numbers. Their arrogance and blatant hatred of their customers in obvious in every anti-consumer move they make and every customer bashing comment spewing forth from their CEO (who seems to have been muzzled only recently). Flipping off the customer is today's number one corporate sport and the only thing that gets their attention is a kick in the financial groin.