February 20, 2007 4:18 PM PST

Vonage and Verizon head to court in patent dispute

A struggling Vonage goes to court this week to defend itself in a patent infringement case brought by Verizon Communications.

Verizon filed suit against Vonage in June claiming the company violated several of its patents. The suit focused on the technology Vonage uses to connect calls from its Internet Protocol service to phones on the traditional network.

Vonage denies that it has violated any patents. It claims that most of the technology it uses is standards-based and widely available throughout the industry. For example, Vonage uses voice gateways from Cisco Systems to route voice traffic over the Internet, connecting IP phone calls to the regular phone network.

Verizon has asked for monetary damages and an injunction. This means that if Verizon wins, Vonage could be forced to shut down its service, unless it can develop a work-around that does not violate the patents.

A Vonage spokeswoman said it is highly unlikely that service would be interrupted for Vonage's roughly 2 million customers.

"First of all, we don't think we have violated any of Verizon's patents," company spokeswoman Brooke Schulz said. "But if the court finds that we do, we will come up with a solution. And we won't have to shut off service to our customers."

The trial comes at a time when Vonage does not need any more distractions. Just last week, it announced during an earnings conference call that it was losing momentum in the Internet calling market.

In the fourth quarter, Vonage added only 166,000 new subscribers for its voice over IP service. That was down from 204,591 subscribers in the third quarter, and from 256,000 in the second quarter, of 2006. Despite its heavy marketing spend, many of Vonage's advertisements, designed to create more brand awareness, had been a flop, company executives have acknowledged. The company is now focusing on producing infomercials, which will highlight customer testimonials.

Vonage's slowing subscriber growth is in stark contrast to subscriber growth among cable operators, which have been setting records.

In an effort to diversify its business, Vonage has started to offer new services. It struck a deal earlier this year with EarthLink to resell wireless broadband in cities where the Internet service provider is building citywide networks.

Executives also said that Vonage will begin selling dual-mode handsets that will enable people to make Internet calls alongside cell phone calls. Some analysts speculate that Vonage is preparing to launch its own mobile virtual network. With MVNOs, as they are called, companies lease cellular network access from a provider such as Sprint and then rebrand the service. Virgin Mobile and Helio are examples of MVNOs.

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22 comments

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THis is what happens when you permit software patents
So stop permitting them. Oh, and by the way, the money you give to Verizon goes straight into their efforts to destroy net neutrality. It's only when consumers learn to make their value stalk with their pocket books that companies will stop working to undermine society.

Do yourself and your employment outlook a favor-fav and drop Verizon ASAP. THere's a nice MVNO called "working assests" that might better reflect the kind of world you'd like to see.

Software patents, and patents generally, aren't a natural right, like the right to assemble. They're there in incentivize inventors to show the rest of the world there incredible feats of intellectual prowess. Obviously, when everyone comes up with the same technology, there is no increidble intellectual feat involved, and equally obviously, no patent was needed to spur the innovation. SO no patent should be awarded because it's BAD for society and technological progress.

All this does is put money in the hands of people who can afford lawyers and run off to the USPTO with every little twit and twiddle of a idea like Bezeos did. It's all about keeping money in the hands of a small number of people.

The thing is, the more they do this, the LESS people are going to have ANY respect for IP laws. The music industry thought it was going to shove it down people's s throat, and they arguably had a moral leg to stand on...that didn't work out so well for them. How do you think IP laws around software are going to sit with developers?

Stop giving money to Verizon. Find another carrier when your contract comes up.

Call your Senator and tell them that you do NOT want software patents.

Give money, even a very small amount, a few dollars, to groups that actively oppose software patents, Ravincher's group is a good one.

Get your friends to do the same.

That's the solution to this problem.
Posted by asdf (241 comments )
Reply Link Flag
Vonage Ethics
Vonage sold me a phone, didn't deliver it, then wouldn't return my money. If that is typical of their ethics, I hope they lose big time. There are enough good VoIP resellers out there that the world doesn't need another arrogant behemoth. To me, this is like a war between Cuba and Venevuela. A win-win situation.
Posted by baldguy61 (63 comments )
Link Flag
THis is what happens when you permit software patents
So stop permitting them. Oh, and by the way, the money you give to Verizon goes straight into their efforts to destroy net neutrality. It's only when consumers learn to make their value stalk with their pocket books that companies will stop working to undermine society.

Do yourself and your employment outlook a favor-fav and drop Verizon ASAP. THere's a nice MVNO called "working assests" that might better reflect the kind of world you'd like to see.

Software patents, and patents generally, aren't a natural right, like the right to assemble. They're there in incentivize inventors to show the rest of the world there incredible feats of intellectual prowess. Obviously, when everyone comes up with the same technology, there is no increidble intellectual feat involved, and equally obviously, no patent was needed to spur the innovation. SO no patent should be awarded because it's BAD for society and technological progress.

All this does is put money in the hands of people who can afford lawyers and run off to the USPTO with every little twit and twiddle of a idea like Bezeos did. It's all about keeping money in the hands of a small number of people.

The thing is, the more they do this, the LESS people are going to have ANY respect for IP laws. The music industry thought it was going to shove it down people's s throat, and they arguably had a moral leg to stand on...that didn't work out so well for them. How do you think IP laws around software are going to sit with developers?

Stop giving money to Verizon. Find another carrier when your contract comes up.

Call your Senator and tell them that you do NOT want software patents.

Give money, even a very small amount, a few dollars, to groups that actively oppose software patents, Ravincher's group is a good one.

Get your friends to do the same.

That's the solution to this problem.
Posted by asdf (241 comments )
Reply Link Flag
Vonage Ethics
Vonage sold me a phone, didn't deliver it, then wouldn't return my money. If that is typical of their ethics, I hope they lose big time. There are enough good VoIP resellers out there that the world doesn't need another arrogant behemoth. To me, this is like a war between Cuba and Venevuela. A win-win situation.
Posted by baldguy61 (63 comments )
Link Flag
verizon
verizon is one of the worst co's i Have ever dealt with it is no wonder they are again trying to shut down competition now they are sticking their nose into cable tv if the succeed in shuting down vonage i will switch to a cell phone i will never use their service again
Posted by tutster2 (2 comments )
Reply Link Flag
I Agree 100% DEATH TO Verizon!
Every one DUMP them ASAP! DUMP Verizon Now! or as soon as your contract is over!

My Contract is over in March! I am Dumping the big V then for sure!
Posted by Migraine (95 comments )
Link Flag
verizon
verizon is one of the worst co's i Have ever dealt with it is no wonder they are again trying to shut down competition now they are sticking their nose into cable tv if the succeed in shuting down vonage i will switch to a cell phone i will never use their service again
Posted by tutster2 (2 comments )
Reply Link Flag
I Agree 100% DEATH TO Verizon!
Every one DUMP them ASAP! DUMP Verizon Now! or as soon as your contract is over!

My Contract is over in March! I am Dumping the big V then for sure!
Posted by Migraine (95 comments )
Link Flag
Hey Verizon.....Why not sue Cisco then?
Here is there claim:

technology for completing phone calls between VoIP users and people using phones on the traditional public switched network = a voip gateway

authenticating VoIP callers, validating VoIP callers' accounts, fraud protection = a call accounting software package

providing enhanced features = an IP PBX

using Wi-Fi handsets with VoIP services = a wifi ip phone

Monitoring VoIP caller usage = historical CDR reporting

All of these "technologies" exist in Cisco's, Avaya's and Nortel's IP Telephony portfolios

So how come they are not the ones being sued? Oh yeah...cause they are not shredding your monopoly with cheap telephony service.

Why isn't everyone who runs a VoIP service provider jumping to Vonage's defense? If VZ wins this, they will set a precedent for use in future "sue you out of business cases cause we don't want to compete" cases. What's next go after Skype, google talk, anyone with an IP Phone...where will it end?

Its stuff like this and their ridiculous mobile phone bluetooth profile hobbling, their greedy anti-net neutrality stance, and their crappy customer service that made me leave them completely. I use my cable company for my home phone and internet now.
Posted by LarryLo (164 comments )
Reply Link Flag
Hey Verizon.....Why not sue Cisco then?
Here is there claim:

technology for completing phone calls between VoIP users and people using phones on the traditional public switched network = a voip gateway

authenticating VoIP callers, validating VoIP callers' accounts, fraud protection = a call accounting software package

providing enhanced features = an IP PBX

using Wi-Fi handsets with VoIP services = a wifi ip phone

Monitoring VoIP caller usage = historical CDR reporting

All of these "technologies" exist in Cisco's, Avaya's and Nortel's IP Telephony portfolios

So how come they are not the ones being sued? Oh yeah...cause they are not shredding your monopoly with cheap telephony service.

Why isn't everyone who runs a VoIP service provider jumping to Vonage's defense? If VZ wins this, they will set a precedent for use in future "sue you out of business cases cause we don't want to compete" cases. What's next go after Skype, google talk, anyone with an IP Phone...where will it end?

Its stuff like this and their ridiculous mobile phone bluetooth profile hobbling, their greedy anti-net neutrality stance, and their crappy customer service that made me leave them completely. I use my cable company for my home phone and internet now.
Posted by LarryLo (164 comments )
Reply Link Flag
This isn't good
Vonage is right that they are using mostly standard technologies to connect their VoIP network with the circuit switched network.

In cases where they are using proprietary solutions from companies like Cisco, so are several other VoIP carriers.

Verizon is just mad because people are defecting off their cash cow circuit switched networks by literally the hundreds of thousands over to VoIP providers.

If Vonage loses this case it would could set a dangerous precedent and deal a significant blow to VoIP.

I really hope some of the other companies with an invested interest in VoIP don't make Vonage go it alone.

Given what Verizon has riding on case it is highly unlikely they are sending in just any thrown together legal team.

Vonage's subscriber growth might be slowing from their 100%/year gains, but the VoIP companies as a whole are quickly eating Verizon's circuit switched lunch and this is their response.
Posted by Dachi (797 comments )
Reply Link Flag
This isn't good
Vonage is right that they are using mostly standard technologies to connect their VoIP network with the circuit switched network.

In cases where they are using proprietary solutions from companies like Cisco, so are several other VoIP carriers.

Verizon is just mad because people are defecting off their cash cow circuit switched networks by literally the hundreds of thousands over to VoIP providers.

If Vonage loses this case it would could set a dangerous precedent and deal a significant blow to VoIP.

I really hope some of the other companies with an invested interest in VoIP don't make Vonage go it alone.

Given what Verizon has riding on case it is highly unlikely they are sending in just any thrown together legal team.

Vonage's subscriber growth might be slowing from their 100%/year gains, but the VoIP companies as a whole are quickly eating Verizon's circuit switched lunch and this is their response.
Posted by Dachi (797 comments )
Reply Link Flag
Shorten Patent's Life
Perhaps patents on software should only exist for a shorter period of time say three years due to the nature of the industry, i.e. what is "new" today is obsolete tomorrow.

Patent rights on drugs should be shorten too.

Or as to software and prescription meds a cap on profits from such patents is imposed. It is one thing to get rich on your idea and another to get "filthy" rich. A better balance needs to be found between the legitimate rights of a patent owner and the needs of society as a whole.
Posted by FLLaw33870 (4 comments )
Reply Link Flag
Shorten Patent's Life
Perhaps patents on software should only exist for a shorter period of time say three years due to the nature of the industry, i.e. what is "new" today is obsolete tomorrow.

Patent rights on drugs should be shorten too.

Or as to software and prescription meds a cap on profits from such patents is imposed. It is one thing to get rich on your idea and another to get "filthy" rich. A better balance needs to be found between the legitimate rights of a patent owner and the needs of society as a whole.
Posted by FLLaw33870 (4 comments )
Reply Link Flag
I ask that every one Dump Verizon ASAP
This is just another case of the big guy trying to crush the little guy...I am both a verizon & Vonage customer...I will be dumping Verizon in a few weeks as soon as my contract is over ....I ask every one ells to do the same!

Hey Vonage Offer me cell phone service then I can have both my cell and landline from you!
Posted by Migraine (95 comments )
Reply Link Flag
I ask that every one Dump Verizon ASAP
This is just another case of the big guy trying to crush the little guy...I am both a verizon & Vonage customer...I will be dumping Verizon in a few weeks as soon as my contract is over ....I ask every one ells to do the same!

Hey Vonage Offer me cell phone service then I can have both my cell and landline from you!
Posted by Migraine (95 comments )
Reply Link Flag
maybe. . .maybe not
w/o patents, inventors/developers and the like may be reluctant to share their new ideas until they can engineer a good method to earn from it in a patent free world. This will drastically slow the pace at which technological advances make it to the masses.
Posted by zboot (168 comments )
Reply Link Flag
maybe. . .maybe not
w/o patents, inventors/developers and the like may be reluctant to share their new ideas until they can engineer a good method to earn from it in a patent free world. This will drastically slow the pace at which technological advances make it to the masses.
Posted by zboot (168 comments )
Reply Link Flag
Verizon knoqingly allows thousands of employees to possibly be injured
If I were Vongage, I would question every thing and every document that Verizon states and presents. Given the fact that Verizon has purposely and knowingly allowed thousands of current and former employees to work with , be exposed to a product they knew could cause severe injuries, disabilities, cancer and death, purposely not warned employees to apparently avoid workers comp , disabilities and related costs associated with such injuries, cancers and deaths, Verizon is perhaps not a company that can be trusted in any forum.
Posted by benny594 (7 comments )
Reply Link Flag
Verizon knoqingly allows thousands of employees to possibly be injured
If I were Vongage, I would question every thing and every document that Verizon states and presents. Given the fact that Verizon has purposely and knowingly allowed thousands of current and former employees to work with , be exposed to a product they knew could cause severe injuries, disabilities, cancer and death, purposely not warned employees to apparently avoid workers comp , disabilities and related costs associated with such injuries, cancers and deaths, Verizon is perhaps not a company that can be trusted in any forum.
Posted by benny594 (7 comments )
Reply Link Flag
Can't beat them, buy them
All this is a ploy to cut down (stock) acquisition costs if a bid is made in for Vonage. This helps ripen the possible merger for Verizon. I bet they will make a purchase within 2 years.
Posted by richardishere (13 comments )
Reply Link Flag
Can't beat them, buy them
All this is a ploy to cut down (stock) acquisition costs if a bid is made in for Vonage. This helps ripen the possible merger for Verizon. I bet they will make a purchase within 2 years.
Posted by richardishere (13 comments )
Reply Link Flag
 

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