Vonage Admits They Have No Workaround

drachenfyre writes "It looks like Vonage has no workaround for their recent patent infringements. This means if a permanent stay isn't granted it is likely that it will be the end of the line for Vonage. What will happen if millions of phone customers suddenly lose their service? Their own filing to the court stated 'While Vonage has studied methods for designing around the patents, removal of the allegedly infringing technology, if even feasible, could take many months to fully study and implement.'"

Comments

stalemate

[yada21]

Welcome to the patent quagmire. The whole progress of industry will become a stalemate if this goes on.

End the patent nonesense now!

Re:stalemate

[badasscat]

End the patent nonesense now!

There really needs to be a distinction made in this discussion between frivolous patents, patent trolls and legitimate patents.

I don't think Verizon is a patent troll, although their patent could still be frivolous and honestly, I don't know whether this is.

But the whole point of patents is to encourage innovation, by providing protection for unique ideas. Why would anybody bother coming up with new ideas if anybody else could just copy them the next day? (That's especially true for startups, which don't have the money to compete head to head with larger, more established companies.)

If this is a legitimate patent, then Verizon was right to enforce it, and it will only help innovation in the long run, by continuing the legal tradition of protecting new ideas. And the court decisions suggest that it was a legitimate patent.

Re:stalemate

[walt-sjc]

Of COURSE they are a patent troll - the patents are obvious to anyone in the field. The patent office is granting anything that is an old idea applied to the internet and calling it new. Until they stop this, the madness will continue.

Verizon is simply using this technology to maintain their defacto monopoly. This is not about innovation - it's about crushing a competitor or competing technology.

Vonage is not alone. If this case holds, it will effectively destroy VoIP.

Re:stalemate

[eln]

Maybe Verizon's patent is a good one, but it's still pretty sleazy the way they did this. They basically let Vonage exist for years, let Vonage spend all the money marketing the VoIP concept to the masses, let Vonage spend all the time and money proving the concept that VoIP could make money and could move beyond the geek space. Vonage did all of that, and now that Joe Blow is comfortable with the concept, and now that Vonage has millions of established customers, Verizon can swoop in, kill Vonage, and get all of those customers without having to spend all the time and money building all of that up themselves.

So, in this case, even if Verizon's patent is valid, they behaved like a patent troll would: Let someone else do all the hard work building up customers and developing your patent into a marketable product, wait until they have lots of customers and are making lots of money, THEN go in and nail them.

If Verizon was only interested in protecting their IP, they would have gone after Vonage a whole lot sooner.

Re:stalemate

[AVee]

I'm not entirely into the details, but according to this article the patents include the briliant idea to connect a voip network with the pots network. Anyone trying to patent something that obvious is a patent troll to me.

And to be honest, the rest of these patents really look like solutions anyone could come up with given the same problem. And perhaps that is the biggest problem with patents these days, most of them are just describing logical obvious solutions. Generally it's just an old solution applied to a somewhat new problem.

Re:stalemate

[davmoo]

While Vonage was doing all that work, they should have performed one more task. They should have had someone do a patent check.

Its not totally Verizon's fault.

Re:stalemate

[Znork]

"There really needs to be a distinction made"

No.

"But the whole point of patents is to encourage innovation"

Actually, the whole point of patents was to indirectly tax the population by handing out monopolies to friends of the crown. The later rationalizations have proven of dubious veracity and value.

"Why would anybody bother coming up with new ideas if anybody else could just copy them the next day?"

Why would anyone make a hammer if anybody else could just copy it the next day? Why would anyone invent a wheel? Why would anyone build better houses? Why would anyone bother writing code if anyone could copy it the next day? Yet we find both hammers and immense amounts of free software.

Innovation happens regardless of protection; it's done to scratch an itch, to solve a problem, to do things better than the competition. Competition and communication is what drives it, monopolies and legal issues merely slow it down.

The only real mitigation for the damage patents do to the economy is disclosure, and the only situation in which the disclosure aspect has more value than the damage cause is when nobody would have managed to reverse-engineer and distribute the knowledge in the time the patent takes to lapse. Doubt those situations even exist anymore.

If you want to 'encourage innovation', then fine, do it within ordinary government budget procedures. _PAY_ the inventors for their patents as they get used. Demand performance measurements; show some _proof_ that the resources are used appropriately. Quit handing out monpolies with their dubious value and economically damaging aspects, as well as their negative effects on development. Hand out a check instead. The patent system costs huge amounts and makes the economy less competetive as it is (in everything from higher costs of products to high medical costs); switching it over to a tax/benefits scheme costs nothing to the economy as a whole and merely has the benefit of making someone actually accountable for the true costs of the system.

Re:stalemate

[ciscoguy01]

Congress needs to address the problem with broad software patents once and for all.

Most of these software patents the clueless patent examiner lawyers at USPTO are granting are obvious and stupid.
Things that have *always* been done that way by *lots* of people are now patented property, since the patent examiners hardly have the experience and knowledge to tell the difference between the obvious and something actually unique.

Software patents should be either eliminated completely, or should be strictly limited, like a 1 year term and very easy to bring forward information (prior art) to cancel them.

This is absolutely ridiculous. Verizon basically patented an extension of DNS. Mapping addresses to phone numbers? Puleeze. We did that in a database in 1977.

I should have patented it then. Heh.

Re:stalemate

[virtual_mps]

While Vonage was doing all that work, they should have performed one more task. They should have had someone do a patent check.

Its not totally Verizon's fault. Hahahahaha. Have you actually ever done a patent search? Go ahead, list for us the patents that might affect a voice over IP business. That's why the system is stupid--there are so many patents that are so broadly written that it is easier to reinvent the wheel than to find it in the patent system. It is absolutely certain that any non-trivial product has implemented some patented ideas, but it would cost more than the product is worth to find them all.

Re:stalemate

[Hrvat]

Well, I'm sure many would be willing to join USPTO as patent examiners but for one thing: the pay. People who have the skills to examine these patents and to investigate prior art etc. are deterred by the dismal pay USPTO is offering: salary starts at less than a half of what software developers with measly 3-7 years experience are offered around DC these days, and the ceiling is definitively way under what someone qualified could make in the private sector or even as a contractor for the government.

Re:stalemate

[Alioth]

Have you ever tried to do one? It's almost entirely impractical, and you'll end up coming to the conclusion that "printf("Hello world\n");" infringes on someone's patent. I've been doing a bit of coding today for an embedded system I'm designing, and although all of the code is run of the mill trivial stuff, I'd not be surprised if I've probably infringed at least four or five patents in the process. Fortunately, I don't live in the US so I don't care.

Part of patent reform should include that if someone can prove beyond reasonable doubt that they independently came up with the idea that they are now being sued over, this should be evidence that the patent was not non-obvious in the first place (or else someone wouldn't have independently thought it up) - and this should automatically invalidate the patent.

The USPTO themselves admit that only 5% of patents are worthy, they even have a term for these 5% - "pioneer patents" - i.e. patents that are truly novel and non-obvious. The other part of patent reform should be that only these "pioneer patents" should be accepted.

Re:stalemate

[chihowa]

Welcome to capitalism my friend

Nope. This whole mess was caused by government intervention. In a capitalist free market system, there would be no artificial monopolies such as are granted by patents. This is Verizon killing off Vonage by decidedly non-capitalistic means.

Re:stalemate

[Thraxen]

While I think the patent system needs reform, your stance is a bit extreme and completely naive. It often costs a LOT of money to develop and idea into a product. Why should one company spend invest a ton of money into bringing a new idea into the marketplace only to have another company swipe their idea when they are done? The second company didn't spend a dime on the research. The first company should most definitely have the right to bring their idea into the market without a bunch of copycats suddenly appearing so they can recover their investment costs and establish their brand.

What we don't need are companies sitting on ideas and doing nothing with them. It's sort of the reverse of the situation above. Patent an idea, but don't spend a dime developing it. Then when someone else runs with the idea, sue them and take all their profits.

Both situations are equally bad... you simply traded one bad idea for another. Try again.

Re:stalemate

[Anonymous Coward]

Yes, it's the smart thing to do. But it's destructive behaviour, it's not what the patent system was designed to encourage. The system is broken and needs to be fixed.

Re:stalemate

[grnrckt94]

If I'm a Verizon exec, I see this as a perfectly executed business tactic. Verizon seems not to have done anything outside the law. Vonage should have done their homework. Sleazy or not, it was a cut throat move by Verizon. I do believe there should be a statute of limitations on this type of thing though to prevent these larger companies from cutting down the "little" guy as Verizon seems to have just done. As far as a ruling, I'd like to see the courts force Vonage to pay some sort of indemnification to Verizon instead of forcing them to stop using the technology. Verizon can't reasonably expect Vonage to just close down, and the courts have to see this for what it was, blatant patent trolling by Verizon. There needs to be some sort of precendent set so that the Verizons of the world bring these types of patent violations up in a timely manner instead of using them as a manner to squash their competitors.

Re:stalemate

[Momomoto]

I believe that you are confusing patent examiners with patent agents.

Re:stalemate

[spagetti_code]

Have you ever tried to do one?

yes

It's almost entirely impractical, and you'll end up coming to the conclusion that "printf("Hello world\n");" infringes on someone's patent

In theory, yes, maybe.

In practical, no. There are core areas to everyone's technology and those
are what you need to focus on. In Vonage's case - their VoIP to POTS switching
would at least have deserved a quick patent check. Its painful, but a few days
work at most by a senior architect who understands their system.

I'm not defending the patent spagetti we have now - but it *is* possible to do
a relatively quick patent check when you are setting up a business.

I suspect what has happened is that Vonage started putting together their
service before patents really got as high profile and tangled as they are now.
I would *bet* they knew about the patent issue at some point, and probably
hoped it would go away.

Re:stalemate

[rifter]

I'm not entirely into the details, but according to this [ipurbia.com] article the patents include the briliant idea to connect a voip network with the pots network. Anyone trying to patent something that obvious is a patent troll to me.

It's not just obvious, but not even novel. First off, VOIP is not by any means a new technology. The way it is currently being marketed is somewhat new, but before the big phone companies started doing this there were a lot of little companies that were trying to innovate in this area only to be swatted by the big phone companies. Second, the connection between POTS and internet telephony is not new either; the aforementioned companies were doing this stuff back in the mid-to-late nineties. These patents are from 2001/2/3. The phone companies know all of this because they were the ones trying to stop telephony from leaking onto the internet, until they were able to move into the situation they are in now, where they are the ones setting the prices and making the money instead of free services and other low cost alternatives eating their bottom line. The result has been lesser technology for higher prices under the guise of innovation.

Even if you ignore the fact that these technologies and even their specific application to the internet are not new, nothing else described in the patents is any different than what has been done in telco systems for around a hundred years. You can't suggest that switching systems based on numbers and billing people for the calls is really an innovation in a sane world. It's not just BS, it is a many-layered onion of recursive BS, which is BS on so many levels it is astounding that anyone is seriously contemplating the idea that the situation as it stands might be justified.

Re:stalemate

[JesseMcDonald]

yeah but w/o regulation our nation would never have made it out of the railroad monopoly era. so win some lose some.

Without regulation we wouldn't have had the railroad monopoly era. (Or did you forget that the railroad monopolies were the result of tax-funded public-works projects?)

This is excellent

[ebcdic]

Millions of people will be inconvenienced by patent enforcement.

Re:This is excellent

[Drakin020]

But if this were blackberry it would be Millions of govt officials wont be inconvenienced by patent enforcement. I said this before but you know if blackberry were in this situation the government wouldn't allow this to happen.

But hey this doesn't affect the big shots so why should they care?

So what will happen?

[The Great Pretender]

Disclaimer - I am a Vonage customer

My best guess:

1) Vonage up the service cost to a level that Verizon can compete at and pay a licensing fee. Problem Verizon have them over a barrel and could pretty much demand what they want, forcing the operation costs too high - putting them out of business.

2) Verizon buy out Vonage at a reduced cost. There's a bunch of people subscribed to Vonage. Even if the fees go up and a chunk stay, that's an easy market capture strategy. Infrastructure is in place etc. Verizon would then jack up the service cost.

3) A third party buy out Vonage. Same problem, but now 1) and 2) are combined.

4) Vonage get their stay. The court case goes on for a few years. Vonage's only argument is that 'it will put us out of business'. They go out of business anyway due to legal fees.

There's plenty of more senarios, but in all cases the service bill will go up. So I need to read my subscription agreement and get ready to ditch the service when the bills start to go up. I wonder if there's a class action lawsuit here for deceiving the customer about ownership of the technology. I'm thinking along the lines of something like - you sub-lease office space, but then get kicked out as the primary leaseholders were not paying their rent to the landlord, also they did not have permission to sub-lease to you. So now you have no office and have lost other cash etc. Any lawyers care to comment?

Why Patents

[SwiftOne]

Have you ever tried to do one? It's almost entirely impractical, and you'll end up coming to the conclusion that "printf("Hello world\n");" infringes on someone's patent.

(One of) The tragedy here is that the patent system is supposed to reward innovators in exchange for the recording and propagation of their idea. Pre-patent times, inventors (allegedly, I don't know the actual history) would secret away their creations, afraid that it'd be copied. Theoretically, many inventions were lost wit the death of their creator, only to be reinvented by someone else. Publication and recording is part of getting a patent, with one of the goals being that we don't spend ingenuity reinventing the wheel.

If no one is consulting these patent records for how to solve a problem, we're not achieving a lot of the intended goal.

patent re-examination?

[Per Bothner]

I haven't heard anything about a patent re-examination. Has Vonage requested that? Has the patent office really re-affirmed the validity of these apparently overbroad patents? If not, why didn't Vonage ask for a stay (preferably before the verdict) so the patent office could re-examine the patents? Didn't they learn anything from the Blackberry case?

Re:No real meat here...

[Paulrothrock]

I was not aware that Verizon could tell me which sort of packets I could send and what destinations I could send them to. If I chose Verizon's DSL, which I don't, I'm buying the ability to send and receive packets on their network from destinations of my choice. If I want to use VoIP, there is no legitimate way they can prevent me.

And it's not like Vonage is stealing from Verizon. People need to buy the DSL service from Verizon at full price, which includes a basic hookup for a POTS phone. And people don't even need Verizon to work with Vonage. I've got cable internet. Is Vonage stealing from Verizon because they're letting people talk on the phone without having a phone line? If so, then Comcast should shut down their VoIP service.

If McDonald's wants to stop me from "stealing" their burgers, they can either raise my price or lower theirs. If Verizon wants to compete with Vonage, they either raise the charges to access their voice network or lower their prices to compete. It's not Vonage's fault that Verizon charges twice as much for half the features.

Re:Devil lives in the details

[danpsmith]

Great idea, but sometimes it takes more than a year to take a product to market. Sure it shouldn't take more than a year for a one click patent to come into use, but if you discover cold fusion, well it might take some time to get the funding and actually build a state of the art first ever cold fusion power plant. Should they really lose their patent after spending billions of dollars? What kind of research will this encourage?

Oh come on, I know you were desperate to point out flaws in the parent's argument, but the truth of the matter is there could be provisions. The point is that you shouldn't be able to file a patent and then just sit on an idea to prevent it from being made, as this definitely stifles not only innovation, but keeps technology stagnant. This type of technology, point blank, was bad for their business model. The fact that they sat on it is not surprising. They could've championed the idea, sure, but it would've taken work and research. They'd much rather sue the pants off anyone who pursues the idea. Which is not what the patent system was set up for.

I think the parent is right, if the company isn't pursuing the idea in a year they should be cut off from patent protection. They'd be able to document whether they were pursuing the idea or not to the patent court and let the judges there make a decision over whether progress is being made. Until an idea is brought to market they could re-hold hearings to make sure the idea is being progressed upon, otherwise the patent becomes null and void.

The whole point of this type of patent trolling is to stifle innovation while seeping money from competitors, which is exactly what is happening here. Why shouldn't the patent system prevent this non-sense? Every time something threatens the phone monopolies, the courts and big gov find a back door to bail them all out and let them continue to charge dollars for what costs them fractions of a cent. They don't want real competition. Patents were designed to give an incentive for innovation, now they just take the incentive away in some cases.

Re:No real meat here...

[The Cisco Kid]

Your argument is utter bullshit.

Vonage wasnt using Verizon DSL. The Verizon CUSTOMER was using their Verizon DSL, to access various parts of the Internet, which included Vonage VOIP servers. Also, I doubt that that many of Vonage's customers have Verizon DSL. Most VoIP customers go with cable broadband, to avoid being forced to pay for a phone line from the ILEC that they dont need in order to get DSL.

If you have a Verizon DSL line, and you access www.ibm.com, should IBM have to pay Verizon for 'using' their DSL to send you packets containing the files making up their website? If you visit amazon.com and buy something, should Verison get a percentage? Its called the Internet stupid! The whole point is to INTER connect.