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Vonage Wins Permanent Stay in Verizon Case

Posted by kdawson on from the huge-sigh dept.

kamikaze-Tech writes "The US Court of Appeals for the Federal Circuit in Washington DC today issued Vonage a permanent stay of a previous court's injunction that would have barred it from signing up new customers. Vonage sought the stay following an April 6th decision by the US District Court in Alexandria, VA enjoining the company from using certain VoIP technology to add new customers."

43 of 104 comments (clear)

  1. Good! by norminator · · Score: 3, Insightful

    Here's to hoping everything goes well throughout the rest of the appeals process.

    1. Re:Good! by jez9999 · · Score: 2, Insightful

      What is there to appeal against? "The patents system is fucking retarded and you should throw the case out on principle"?

      --
      == Jez ==
      Do you miss Firefox? Try Pale Moon.
    2. Re:Good! by Planesdragon · · Score: 2, Interesting

      What is there to appeal against? "The patents system is fucking retarded and you should throw the case out on principle"? No. Both the structure of Congress, our electoral system, and the absurd extremes of the 1st and 2nd amendment prove that "fucking retarted" doesn't disqualify a law.

      I'd go with the simple "that patent is invalid" argument, and if that doesn't work a "they're a monopoly and should be made to license that patent for a court-determined cost" argument.
    3. Re:Good! by EdelFactor19 · · Score: 2, Interesting

      as much as I hate to say it, monopolies arent illegal. monopolistic practices are. The government has no right and would set a far worse precedent enforing licensing by a court determined cost. That would be the absolute worst thing that could possibly happen. Next thing you know based on that precedent judges through the land will be licensing patents for people against their will without their knowledge for whatever price they determine. A patent most fundamentally grants you the right to determine the fate usage and licensing of your patent. You have every right to refuse to license it to people whether or not you plan on doing any with it.

      to be honest im surprised big oil hasnt teamed up with the auto industry to patent everything under the sun involving electric cars and then refuse to license it to anyone so that they can continue to avoid the electric car thing (watch 'who killed the electric car')

      I really hate patent trolls, and I really side on vonage with this whole thing... but irregardless you cant just say fuck it they have all the control make them license everything.... and sadly the folks it will end up hurting the most is the FOSS community.. now commercial groups will have the means to forcibly pay for license to profit off Open source development.

      the one and only problem here is the flock of moronic idiots who are in control of the USPTO... which reminds me, I wonder if they are hiring, it would probably be fun to do nothing and grant patents simply because i felt like it.

      --
      "Jazz isn't dead, it just smells funny" ~Frank Zappa
      EdelFactor
  2. Vonage is likely saying.... by 8127972 · · Score: 5, Funny

    ..... Whoo hoo, hoo hoo hoo!

    --
    This is my opinion. To make sure you don't steal it, it's covered by the DMCA.
  3. verizon will do whatever it takes to win by Anonymous Coward · · Score: 2, Informative

    i work for a CLEC in NH. Verizon continually changes the rules
    on us to make our lives difficult. I hope vonage wins the day.

    1. Re:verizon will do whatever it takes to win by Shishak · · Score: 2, Interesting

      I OWN a CLEC in MA and Verizon does NOT change the rules on us. The rules are pretty straight forward, read 'The Act' and subsequent FCC TROs. The FCC DOES change the rules on occasion, sometimes for the good, sometimes for the bad. The biggest problem is that the 2 largest voices against the RBOCS were AT&T & MCI. Those voices have been silenced.

      The single most troubling word in 'The Act' is 'impaired'. The RBOCS must provide a service to a CLEC at Unbundled Network Element (UNE) pricing if the CLEC would be impaired without it. The definition of impaired has been strongly contested for the past 10 years. Am I impaired when I don't have access to fiber to homes & businesses? I say yes, Verizon says no. The FCC agrees with Verizon.

      I'm hoping Congress gets their act together with the 'Telecomunications Act of 2006', Maybe we'll see it in 2008, maybe it will be better written. It is more than just network nuetrality but that a big part

      --
      Now I hope and pray that I will But today I am still, just a bill
  4. still could be screwed? by tedshultz · · Score: 3, Interesting

    This lets them sign up new customers, but they still could be screwed as far as the patent thing.

    1. Re:still could be screwed? by zappepcs · · Score: 5, Interesting

      I have a hunch that Vonage will survive http://gigaom.com/2007/04/08/voip-patent-mess/ this article talks about how Verizon really shoudn't have the patents in the first place, and this might be a good argument in the appeals process.

      --
      Support NYCountryLawyer RIAA vs People
  5. Ok, so now what? by AltGrendel · · Score: 4, Funny

    Wait for the patents to expire?

    --
    The simple truth is that interstellar distances will not fit into the human imagination

    - Douglas Adams

    1. Re:Ok, so now what? by morgan_greywolf · · Score: 5, Informative

      Wait for the patents to expire?


      They continue the appeals process. If they win on appeal, Vonage continues doing business. If they exhaust all available appeals and lose, the injuction goes back into effect, Vonage can't sign up any more customers and eventually goes out of business, unless it gets bought out by Verizon.

      As a very happy Vonage customer, I'm hoping they win.
      --
      My blog
    2. Re:Ok, so now what? by vertinox · · Score: 2, Insightful

      Well... 15 years ain't that long.

      Hopefully, mankind in the next few years will patent every obvious idea possible so that by 2030 we can get back to actually inventing real non-obvious inventions.

      --
      "I am the king of the Romans, and am superior to rules of grammar!"
      -Sigismund, Holy Roman Emperor (1368-1437)
    3. Re:Ok, so now what? by kilodelta · · Score: 3, Interesting

      I too hope Vonage triumphs. After all, the patents in question have already been clearly shown to be patents of existing art that was in the public domain. Lets go one further. If Vonage wins I say they should file an anti-trust suit against Verizon. Verizon is only going after Vonage because Verizon has lost 1/3 of their local loop business. Curiously they didn't go after the cable companies, or the other VoIP carriers. That makes it clear that they're trying to send a message. The worst part is, Verizon isn't really regulated anymore. They could do their own VoIP and they have, but the pricing is way out of line with what Vonage among others charges.

    4. Re:Ok, so now what? by rm69990 · · Score: 2, Informative

      If they were smart, they would be spending this time also working around the patents (if possible) so they could also survive an injunction. Of course, it may not matter. Vonage is hemmoraging cash at an unsustainable rate. They only have $550M in total assets ($500M in Cash and Short term investments) and they lost $120M last quarter alone.

  6. Not so fast on that 'huge sigh' by morgan_greywolf · · Score: 4, Informative

    The stay is granted until the appeals process is concluded. IOW, if Vonage loses in the appeals process, of course, the District Court's injuction goes back into effect.

    It ain't over 'til it's over.

    --
    My blog
    1. Re:Not so fast on that 'huge sigh' by Billosaur · · Score: 3, Interesting

      Very true, but it gives them time to try and get around the patents in question. So while I suspect the folks at Vonage corporate are happy, the tech staff is probably not popping champagne corks just yet.

      --
      GetOuttaMySpace - The Anti-Social Network
    2. Re:Not so fast on that 'huge sigh' by greenbird · · Score: 3, Insightful

      Very true, but it gives them time to try and get around the patents in question.

      They can't work around them. The patents basically cover converting an IP address to a phone number and visa versa. It's impossible to connect VoIP to the phone network without doing this. Unless or until the patents are determined to be invalid Verizon owns VoIP and can shut down any company that ties VoIP to the phone network.

      --
      Who is John Galt?
  7. Corperate America wins again by Shambly · · Score: 3, Insightful

    Somehow i doubt this case will result in a large portion of the Patent laws being repealed. Vonnage will look at its cost/risk analysis and decide that paying royalties to Verizon is much better then facing the risk of losing their business. A settlement will be reached behind closed door. All this posturing is merely a game of trying to reach the minimum amount of royalties they have to incur. Two large corporations fighting each other will not result in more freedom for the rest of us. The patent business is to profitable to jeopardize by bringing an argument to court.

    1. Re:Corperate America wins again by (A)*(B)!0_- · · Score: 2, Insightful

      "Vonnage will look at its cost/risk analysis and decide that paying royalties to Verizon is much better then facing the risk of losing their business."
      What makes you think Verizon is willing to license to Vonage?

      "All this posturing is merely a game of trying to reach the minimum amount of royalties they have to incur."
      Or it's a matter of Verizon trying to sue Vonage out of business.

      "The patent business is to profitable to jeopardize by bringing an argument to court."
      Huh? How do you think the injunction came into existence in the first place? Verizon has already taken the argument to court.
    2. Re:Corperate America wins again by Shambly · · Score: 3, Interesting

      What makes you think Verizon is willing to license to Vonage? Because there is money in doing so. It's likely more profitable for Verizon to obtain royalties from Vonage then to have them take over their business.

      Or it's a matter of Verizon trying to sue Vonage out of business. Despite what you think company execs aren't vicious little monsters out to destroy everything that is not them. It is more profitable for them to charge large licensing fees to Vonage then to destroy them.

      Huh? How do you think the injunction came into existence in the first place? Verizon has already taken the argument to court. We are still in the deliberation stage. Verizon and Vonage can still reach an agreement that is mutually beneficial (at least better then one that may be arbitrary assigned by a judge).
    3. Re:Corperate America wins again by NeutronCowboy · · Score: 3, Insightful

      It's likely more profitable for Verizon to obtain royalties from Vonage then to have them take over their business.


      No. Monopoly rents are more profitable than any royalty or customer payments.

      It is more profitable for them to charge large licensing fees to Vonage then to destroy them.


      And one way to destroy Vonage is to charge licensing fees that are larger than Vonage's profit margin. It's win-win for Verizon, really.
      --
      Those who can, do. Those who can't, sue.
    4. Re:Corperate America wins again by norminator · · Score: 3, Informative

      Huh? How do you think the injunction came into existence in the first place? Verizon has already taken the argument to court.
      We are still in the deliberation stage. Verizon and Vonage can still reach an agreement that is mutually beneficial (at least better then one that may be arbitrary assigned by a judge).

      Actually, no, we're in the appeals stage. The deliberation ended a couple weeks ago when the jury decided that Vonage infringed on 3 out of 5 of Verizon's patents. Then Verizon sought an injunction against Vonage. I think it's safe to say that either Verizon, Vonage, or both are not interested in a licensing agreement. Vonage's entire defense was that the patents are junk and are too broad to be valid. Of course they'd rather pay licensing fees than close up shop, but if that possibility ever comes up, it will happen after the appeals process has been exhausted.

      And when you say it's more profitable to Verizon to license the patents' use, I think that's complete speculation. We don't know how much business Verizon can hope to reclaim by stomping out Vonage (and then the other VoIP providers that could also be infringing), and we don't know how much they'd be able to charge for licensing fees (or how much Vonage would be able to pay).
  8. I would have thought... by Anonymous Coward · · Score: 3, Insightful

    this to be a no-brainer, considering what SCOTUS has already said about injunctions. This was actually a pretty important case, in recent history that the injuction issuing judge should really have read. I am pretty sure Verizon couldn't show the injunction met the 4th requirement. Actually, I think they would have a hard time showing items #1 or #3, as well.

  9. Somehow I can't imagine that Verizon really wanted by soft_guy · · Score: 3, Insightful

    Somehow I can't image that Verizon really wanted to cause Vonage to immediately go out of business which is what would have happened had they not gotten this stay. They would have been out of business by the time the case made it to trial and Verizon wouldn't have received much if anything.

    --
    Avoid Missing Ball for High Score
  10. Does the general public know? by RobertB-DC · · Score: 4, Insightful

    This is a huge story among us techno types, but does the general public have any clue?

    Just last night, I got the usual pack of coupons in the mail... including one inviting me to choose Vonage for my local phone service. I'd wager nobody on my block has ever heard of the Vonage vs. Verizon patent battle. What happens to these folks -- especially the non-technical ones who don't even understand the 911 and VoIP thing -- if Vonage eventually loses its case entirely?

    Or is Vonage's strategy now built around pumping up the customer base in advance of the inevitable bankruptcy and fire sale of their only remaining asset: their customer list?

    --
    Stressed? Me? Of course not. Stress is what a rubber band feels before it breaks, silly.
    1. Re:Does the general public know? by ivan256 · · Score: 2, Informative

      especially the non-technical ones who don't even understand the 911 and VoIP thing


      Given that many "technical" people still don't get the 911 thing (and claim it's way worse than it actually is), maybe it's for the best...

      It wouldn't be the end of the world if your phone company went out of business and you had to sign up with a new one. Especially in the age of number portablilty.
    2. Re:Does the general public know? by HolyCrapSCOsux · · Score: 2

      I have Vonage. My other options are Cox (VOIP) or Embarq (POTS)
      I have internet through Cox at the moment, but their VOIP costs more than Vonage.
      I will fight tooth and nail going back to Embarq(Formerly Sprint).
      My wife has had the same phone number her whole life. I can just see something going wrong and losing the number. I'd probably get a divorce.

      --
      0xB315AA8D852DCD3F3DCA578FD2E0BF88
    3. Re:Does the general public know? by Jett · · Score: 3, Interesting

      I don't get the whole "911" thing. I've had to call 911 on my Vonage phone and it worked fine. As I'm sure everyone here knows, when you sign up you have to "activate" 911 service (i.e. fill out a form with your address and wait for them to verify it) - it's no big deal.

    4. Re:Does the general public know? by ivan256 · · Score: 2, Insightful

      Actually, apparently you do get it.

      Unfortunately many techies read way too much into the situation and assume that you get sub-par E911 service on your Vonage phone. It's just plain not true. The only additional complication is that you need a UPS for your router so you can call 911 when the power is out.

  11. Net to Phone by mastershake_phd · · Score: 2, Funny

    Now they just need a new way to get calls from the net to a phone line. I wonder if anyone has patented taping a phone to a speaker.

    --
    Libertarian Leaning Political Discussion Forum.
    1. Re:Net to Phone by dattaway · · Score: 3, Funny

      I wonder if anyone has patented taping a phone to a speaker.

      Just because it seems obvious to you, doesn't mean it didn't take someone else millions of dollars in reasearch to develop this INVENTION. It could have taken many billed hours to perfect the tape required to adhere the phone to the said speaker. What will happen if those who carefully do this research aren't compensated for their efforts? We will all be cast back into the stone age with our children. Please think of the children!

    2. Re:Net to Phone by hicksw · · Score: 2, Funny

      Acoustic couplers?
      --
      Somewhere, something incredible is waiting to be known, but not here.

  12. Verizon's Bitch Whore... by Frosty+Piss · · Score: 3, Interesting

    Unfortunately for Vonage, under the current patent system, Verizon almost certainly has them under their thumb. Within the current rules, I'm betting that Vonage can't win, and somehow will become Verizon's bitch whore just to stay in business. Patent reform is the solution, but it's not going to happen in time for Vonage.

    --
    If you want news from today, you have to come back tomorrow.
  13. How about.. by loconet · · Score: 2, Interesting

    I'm not too familiar with what exactly is going on here and the reach of the issues but how about Vonage Canada? Did Verizon register the patent up here as well? Does it even matter (considering traffic still goes through American based technology/infrastructure)?..

    --
    [alk]
  14. We have a stay! Sign up today! by searchr · · Score: 5, Funny

    Vonage! We can't guarantee we'll be here tomorrow, but we promise great service today!

    [Sign up for a 3 or 5 year plan, pay in advance, and earn a special reserved seating package for all future Vonage court proceedings!]

  15. Re:Vonage sucks donkey balls, no, really! by revlayle · · Score: 2, Interesting

    So how do you get a actual phone number tied to your VoIP and how can you dial out to an arbitrary phone number? If I knew how to do that, I wouldn't get Vonage (or Verizon) either!

  16. Link to the actual text of the patent in question by Dejohn · · Score: 3, Informative

    Here's the patent Click Here

  17. Re:Vonage sucks donkey balls, no, really! by Anonymous Coward · · Score: 5, Informative

    I pay $16 a month for 500 minutes, which is about 30 minutes more than I have ever used in one month. I can take my little Vonage box with me to any broadband connection on earth and my phone magically rings there. When someone leaves me voicemail their message gets emailed to me. If I ever want to see who has called me or who I have called I can check it on a webpage. I've had Vonage for almost three years now and haven't had a single problem with it.

    Tell me what can compete with this for $4 a month. Hell, tell me what can compete with this for even $30 a month. I used to pay almost $40 a month just for local phone service!

  18. Re:Vonage sucks donkey balls, no, really! by Mordaximus · · Score: 3, Interesting

    Through any number of wholesale VoIP providers. This might help : http://www.voipproviderslist.com/

    I've personally used Unlimitel (In Canada) for over a year and have been extremely happy with the service. $2.50/month for a DID and $0.01/minute for calls on their network, which is where I place most of my calls. It was far, far cheaper with me (With 4 DIDs) using their service than even basic service from other providers.

    You're best off if you're running your own PBX, such as Asterisk, since you can provide your own voice mail services etc.

  19. Re:Link to the actual text of the patent in questi by P3NIS_CLEAVER · · Score: 3, Insightful

    It seems that they have patented using a computer to store information and to facilitate a transaction.

    --
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  20. Jeff Pulver claims prior art.... by Newer+Guy · · Score: 3, Interesting
    Jeff Pulver has come forward claiming that he published a book called "The VOIP Toolkit" that has all of verizon's patent stuff in it. The problem for Verizon is that the book was published MONTHS before they filed for their first patent. he used name translation for Free World Dialup back in 1995. It also looks like Dialpad predated Verizon's use of this technology as well...

    Here: http://pulverblog.pulver.com/archives/006846.html

    Verizon is looking more and more screwed every day....
  21. Re:Somehow I can't imagine that Verizon really wan by grasshoppa · · Score: 3, Interesting

    This doesn't SAVE Vonage - it just allows them to continue to exist until Verizon can either buy them on the cheap or else get lots of money from them. In order for your argument to make sense, then Verizon would have to believe that another larger player in the VOIP market was going to emerge that they should wait and try to extort for a larger payday in the future.

    It's not about the money. Phone companies in general aren't about making money; They have more money than God. What do they need an extra 60 mil for?

    The telcos are all about power; Consolidating theirs. If there are external voice players out there, they want them eliminated. A rival and real competition would threaten their hold on their market, and that's not something they'll stand for. VoIP has the potential to be the most disrupting technology since the internet itself; The telcoms are terrified of it. If they can supress it long enough to establish a strangle hold on it, they win.

    --
    Mod me down with all of your hatred and your journey towards the dark side will be complete!
  22. Email response from Verizon! by An0maly · · Score: 2, Insightful

    i emailed verizon about this crap last time there was a big thread. here is my email and the response:

    I recently read about Verizon's attempt to stop Vonage from allowing VOIP calls to connect to old telephone systems on basis of "patent infringement". If I recall, other companies used the technology mentioned before Verizon had acquired those patents. I have to say that I'm angry and baffled.

    What is the ultimate goal for this type of action? Do you think that all of the Vonage customers who could potentially be without service soon would flock to gobble up everything Verizon has to offer? Don't you think that those people that have Vonage land lines, but have Verizon cellular service might reconsider their wireless provider when it's time to renew the contract? I don't have a wireless phone, but I had considered getting service from Verizon. You guys just shot that to hell. Well done.
    - Show quoted text -

    ---------- Forwarded message ----------
    From: customersupport@verizon.com
    Date: Mar 23, 2007 3:38 PM
    Subject: RE:Verizon.com Consumer email response [#16185185]

    Thank you for contacting the Verizon eCenter. I have received your email dated March 23, 2007 regarding our recent lawsuit with Vonage. Thank you for taking the time to provide us with your comments. My name is Wendy, and I will be happy to assist you.

    We appreciate you sharing your concerns with us. We value the opinions of our customers and those that visit our website. On March 8, 2007, a jury found that Vonage Holdings Corp. had infringed three United States patents awarded to Verizon covering methods of offering commercial-quality VoIP services, including wireless access to VoIP.

    As stated by John Thorne, a Verizon senior vice president and deputy general counsel, "Patents encourage and protect innovations that benefit consumers, create jobs, and keep the economy growing. Verizon's innovations are central to its strategy of building the best communications networks in the world. We are proud of our inventors and pleased the jury stood up for the legal protections they deserve."

    I hope I have resolved your reason for contacting us. If you have additional questions, or if we may be of assistance to you in the future, please let us know. We look forward to serving you.

    Thank you for using Verizon. We appreciate your business.

    Sincerely,
    Wendy
    Verizon eCenter

    to customersupport

              Mar 23
    My main question is what constitues infringment by Vonage and not others who offer identical service? Will you be suing all companies that are able to bill by the minute (every wireless carrier on the planet)? All VOIP providers that connect to POTS (Virtually ALL cable providers)?
    - Show quoted text -

              Mar 26
    Thank you for contacting the Verizon eCenter.

    I apologize for the delay in my response, and I regret any inconvenience to you.

    My name is Jamie and I have been forwarded your email with further questions regarding the Vonage lawsuit. You wanted to know if Verizon plans to pursue other companies who have produced the same services as Vonage. You also wanted clarification as to what constitutes infringement by Vonage, and not other VOIP carriers.

    Vonage is the only company to our knowledge that used our specific patents to produce their products. Other VOIP companies that offer this service were able to provide this service using a different method other than our patents.

    At this time, we do not have any intention to pursue other companies regarding this issue. We are not aware of other companies that have used our patents to produce this service.

    If any further companies attempt to use a Verizon patent, a press release will be issued advising of any plan of action against other companies.

    I hope this has clarified your concerns.

    Thank you for using Verizon. We appreciate your business.

    Sincerely,
    Jamie
    Supervisor
    Verizon eCenter

    --
    "...if you don't like your job, you don't strike. You just go in every day and do it really half-assed..." -Homer