Vonage Wins Permanent Stay in Verizon Case

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."

Comments

Good!

[norminator]

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

Vonage is likely saying....

[8127972]

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

still could be screwed?

[tedshultz]

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

Re:still could be screwed?

[zappepcs]

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.

Ok, so now what?

[AltGrendel]

Wait for the patents to expire?

Re:Ok, so now what?

[morgan_greywolf]

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.

Re:Ok, so now what?

[kilodelta]

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.

Not so fast on that 'huge sigh'

[morgan_greywolf]

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.

Re:Not so fast on that 'huge sigh'

[Billosaur]

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.

Re:Not so fast on that 'huge sigh'

[greenbird]

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.

Corperate America wins again

[Shambly]

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.

Re:Corperate America wins again

[Shambly]

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).

Re:Corperate America wins again

[NeutronCowboy]

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.

Re:Corperate America wins again

[norminator]

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).

I would have thought...

[Anonymous Coward]

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.

Somehow I can't imagine that Verizon really wanted

[soft_guy]

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.

Does the general public know?

[RobertB-DC]

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?

Re:Does the general public know?

[Jett]

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.

Verizon's Bitch Whore...

[Frosty Piss]

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.

We have a stay! Sign up today!

[searchr]

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!]

Re:Net to Phone

[dattaway]

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!

Link to the actual text of the patent in question

[Dejohn]

Here's the patent Click Here

Re:Vonage sucks donkey balls, no, really!

[Anonymous Coward]

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!

Re:Vonage sucks donkey balls, no, really!

[Mordaximus]

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.

Re:Link to the actual text of the patent in questi

[P3NIS_CLEAVER]

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

Jeff Pulver claims prior art....

[Newer Guy]

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....

Re:Somehow I can't imagine that Verizon really wan

[grasshoppa]

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.