Vonage Loses VoIP Case With Verizon

cdrudge writes "A federal jury on Thursday said Vonage Holdings Corp. violated 3 of 5 patents of Verizon Communications Inc. and ordered the upstart Internet-phone company to pay $58m in damages as well as 5.5% in royalty fees per month per customer. Verizon said it would seek an injunction to block Vonage from using its patented technology. The jury did reject Verizon's claim of $200m in damages and that Vonage deliberately violated Verizon's patents. As you might expect, Vonage said it would appeal the decision and seek a stay if an injunction is granted. Judge Claude Hilton set a hearing for March 23 on whether to grant an injunction."

Comments

Maybe a little dose of reality

[cdrguru]

Vonage's businss model depends on Verizon, SBC and the other existing phone companies. It depends on utilization of their facilities without paying anything for the use.

It also depends on the customer independently having broadband Internet service, often over a conventional telecommunications companies facilities.

Vonage has pretty much no facilities of their own. They rely on the facilities of their competitors being used at no cost to them. This is hardly a case of competition - more of leeching.

Let's assume that Vonage were to be overwhelmingly successful against Verizon, to the extent that Verizon were to cease operations. Vonage would be unable to service the customers that were using Verizon lines to get on the Internet. Interesting. Vonage relies on Verizon to exist to provide free services so they can service the customer.

This doesn't sound at all fair or equitable. I don't see this business model surviving very long in any case.