Vonage Hit With $69.5M Judgement

andy1307 writes "The Washington Post is reporting that Net telephone company Vonage Holdings Corp. was ordered in federal court Tuesday to pay Sprint Nextel $69.5 million in damages for infringing on six telecommunications patents owned by competitor Sprint Nextel Corp. In addition to the damages, jurors awarded Sprint Nextel a 5 percent royalty from Vonage on future revenues. It was the second verdict against Vonage this year. A jury in Virginia determined in March that Vonage had violated three Verizon patents in building its Internet phone system. The jury awarded Verizon $58 million in damages plus 5.5 percent royalties on future revenues. Greg Gorbatenko, a telecommunications and media analyst for Jackson Securities, said the decision 'feels like a death knell' for Vonage because future revenue will likely dry up, preventing the company from investing in better technology or improving customer service."

Comments

And so, the incumbent telcos smugly feel...

[Anonymous Coward]

... they have destroyed VOIP as a threat, and they can go about their usual greedy, grasping ways. Sprint will raise a glass to Verizon and toast to their continued wealth.

But there will come a day when we will kick their corporate corpses and spit on them.

Re:And so, the incumbent telcos smugly feel...

[NeutronCowboy]

No, they don't feel that they have destroyed VOIP as a threat. They've destroyed someone who was using VOIP to threaten their monopoly. I'm sure that we'll see Sprint, Verizon and ATT provide VOIP at some point as a legitimate alternate to a landline. And to some extent, they already do. But there will never, ever be a new company that will rely on VOIP to become a legitimate telco competitor. Because before that company will become a legitimate competitor, the incumbents will have sued it into the ground. $100 million verdicts are tough for an incumbent, but not a deal-breaker. $100 million verdicts are death sentences for anyone trying to start a competitor.

The only day that we will kick their corporate corpses is if we get rid of stupid patents and actually enforce anti-trust regulations (note to the FCC: cable and satellite providers are no more competitors to ATT than pencils and markers are competitors to Bic). And I don't see that coming anytime soon.

A perfect example of patents destroying innovation

[Anonymous Coward]

This is a perfect example of how patents utterly destroy innovation.

Here we have Vonage, offering a novel and efficient solution to global communication. They're opening up new possibilities. Yet the incumbents dare not face true competition, so they quash this innovative burst of talent. And what do we get? Less innovation, and less economic efficiency.

Absurd

[cdn-programmer]

This is utterly absurd.

In 1985 I worked out everything that was required to do this and in fact even went so far as to track down Dialog cards so I could interface a PC to a T1 line.

There is NOTHING required that is worthy of a patent. NOTHING at all. This is all a totally obvious idea and relatively easy to implement. In fact it is so obvious that when I started working on the project I never even considered that patents would be available.

I never finished that project. I was a single parent working at home and my kids at the time decided I should not be allowed to program. Alas.

Now of course we have projects like Asterisk and its quite mature.

So how does this ruling affect projects like Asterisk? (www.asterisk.org)

Are we banned from plugging a hand held device that contains both a speaker and a microphone into a computer now? Or are we banned from connecting the computer to the telco switch, which BTW is a computer.

Maybe we are banned from connecting a computer which is called a PC to a computer which is called a switch via a network which has been in common use for decades.

To the fellow who points out that people who are too dumb to get out of jury duty are put in charge of million dollar technical decisions which they cannot possibly understand.... yes. You are 100% correct and you make an excellent post.

Its clear that lawyers have managed to turn technical progress into a game of craps. IMHO this is something the public needs to be more aware of and somehow it would be nice if our pollies could be held accountable for the bad legislation they created. We really need to get patent business out of the computer business.

Re:Because the jury selection process is corrupted

[MrDoh1]

I was the foreman on a murder trial a few years ago.

After the trial, speaking with the defense and prosecutors, they both said they nearly excluded me, but both took a chance. They outright told me that they are afraid of people in technical, specifically IT related technical fields, serving on juries. They didn't really elaborate much but it was the general rule, not one just for this case.

I did convey to them that I believed that was wrong thinking on thier parts.