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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."
... 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.
Damn, I wish I'd remembered to patent "connecting phone calls over the internet" when I thought about it... oh, the first time I saw a microphone attached to a PC.
Seriously, 8 random people who aren't smart enough to get out of jury duty are considered smart enough to understand the fine points of patent law and internet telephony? And this is enough to cripple a (relatively) small startup company? Can someone remind me what Sprint/Nextel did with these oh-so-valuable patents, and what Vonage did that cost them tens of millions of dollars? Besides not paying sprint tens of millions of dollars, that is.
If I knew the wedgies I gave you back in 6th grade would have resulted in this . . . I might have taken a moments pause.
From a customer viewpoint, I like Vonage because it's cheaper than a local phone, but I can't say I've seen any particular improvement in the service for the three years that I've been a customer. It works fine. There are some features, such as separate voicemail boxes for family members, which I've waited in vain for all along. Instead they introduced speech-to-text but are charging extra for it. Totally automated services like that ought to be free add-ons to differentiate themselves from "old-fashioned" telephone and nickle-and-diming cellphone companies. I'm not sure what their long-term plan is. Simply bridging between the Internet and POTS can't be all that hard.
In addition to the damages, jurors awarded Sprint Nextel a 5 percent royalty from Vonage on future revenues.
The correct legal strategy here is, change their name to an unpronounceable symbol, and force everyone to call them "the telecommunications company formerly known as Vonage".
The theory of relativity doesn't work right in Arkansas.
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.
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.
Interesting contradiction in a CNN article:
...
"We are disappointed that the jury did not recognize that our technology differs from that of Sprint's patents," chief legal officer Sharon O'Leary said in a statement.
"Vonage is working on a technology "workaround" to Sprint's patents similar to how it is addressing the Verizon patents."
Why would it be working on work-arounds for patents that it is not infringing?
Well, on the bright side, we won't be having to hear anymore of that damn "Woohoo" song from their commercials.
"If you have a real phone line, then most of the big long distance companies offer an unlimited plan.
A quick check showed plans from AT&T, and MCI, were avaible."
Sure they do, but at more than double the price I pay Vonage.
The pursuit of absolute tolerance leads to the most rigorous and ludicrous intolerance. - REX MURPHY
We've got patents being issued on obvious / unpatentable ideas and they're being upheld by courts that appear to be working for the big corporations - maybe the judges are clueless or overworked, but decisions like this one don't make the legal system look good.
Jointly, the current giant telecom companies hold patents on everything up to and including transmitting a voice over a wire. Any inventor that comes up with a better or cheaper way to provide voice telephony service will receive the same treatment that Vonage did.
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."
Sharon, you must think we're a bunch of chumps. We didn't get to be big phone companies by being nice, you know. Better service and lower prices? Did you really think we'd let you get away with that little stunt?
Why do you think we pushed patents in the first place? Monopolies have always been about better profits, and never about better customer service or value. Quite charming that someone out there actually believes in such antiquated notions, really.
I believe, Sharon, you are just beginning to understand how a phone company is supposed to work. Better customer service? Hah! We're here to make a profit, and while your little charade was entertaining, it's high time you got on with being serious about being a phone company.
I mean, honestly, when was the last time one of your customers was on hold for more than a half hour before finally giving up? And you call yourselves a phone company...
Better technology? Are you serious? Why, that costs money, you know. Did you really believe our lawyers would let you get away with that?
After all, just who do you think we are?
The society for a thought-free internet welcomes you.
It's really kind of ironic. Verizon bought out MCI, which was one of the first long distance companies that was able to circumvent the AT&T regulated monopoly. Their microwave towers were disrupting the existing market forces in much the same way that Vonage and VoIP in general has the potential to be. Now a company that only managed to get its start by being basically "a law firm with an antenna on the roof" is essentially using their army of lawyers to keep down their potential competitors.
Funny how that works.
Seriously though, why would ANYONE consider it smart to get out of jury duty when the decisions of the juries impacts case law like no other. Why is "Getting out of jury duty" considered smart? Yes, it is a hassle and there are opportunity costs involved, but think of the cost of ALL JURIES BEING RETARDED.
Because the jury selection process has been corrupted to the point that anyone with any background in the subject in question, or an engineering background in general, will be deliberately excluded from the selection.
If I understand it correctly, this apparently started out to avoid having jury members bring into their deliberations any personal knowledge of information that is not in evidence (and thus was not subject to challenge by the litigating parties). But the net effect is to exclude exactly those people with the educational toolkit to make informed judgements on technical issues, rather than being led around by the rhetorical skills of the attorneys.
People with technical backgrounds are, in fact, excluded from most trials. The ability to reason logically is seen as a liability by both prosecuting and defending attorneys.
One result is that the panels finally selected are far from a statistical sample of the population - with a statistical bias that subverts the intent of the jury system - and thus justice - to an extreme degree.
The other result is that going through jury selection is, for most technical people (along with anybody with a strong political position, knowledge of guns or crime, etc.), a massive waste of time. They will almost never be selected.
= = = =
By the way: You won't find the phrase "jury of his peers" in the US legal system. This is because we're all supposed to be peers before the law. Thus you have no case if you, as an engineer, object to being tried by a jury that systematically excludes engineers and consists exclusively of people who are retired or on welfare.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
You could try skype with skypein, I don't think it's unlimited, but at prices where it might as well be.
Everything will be taken away from you.
This is a perfect example of how bad patent laws and poor bureaucratic administartion utterly destroy innovation.
Fixed for you.
I am not a lawyer. This post does not constitute any form of legal advice.
It is increasingly starting to look like the US system will grind to a halt. The real question is what it will take for competition from abroad to force a reform. My guess is that sooner or latter the US economy will take such a hit that the rest of the world will no longer be dependant upon it. When that happens Black Tuesday will look like statistical noise in comparison.
A ZDNet analysis of the disputed Verizon patents 6,104,711, 6,282,574 and 6,359,880.
I haven't been able to find a list of the Sprint patents yet.
Who is John Galt?
I'd feel bad for Vonage except they already screwed me this year so I learned the hard way they were no less evil than any other phone company. I had been a customer of Vonage a year or so ago. I had several lines and had bought a couple decent phones to go with their service. I still have the boxes and receipts for these phones. I moved, switched jobs, etc and canceled my service until I'd gotten settled back in. When I go to turn my service back on I find out that they'd managed to leave one line subscribed. They swear up and down that there is no way I could have canceled my other lines without canceling that line unless I'd specified for that to happen. So if I want to get service back I'll have to pay the monthly fees and extra fees for that line before I can re-open my account. They never even sent me any kind of paper notice letting me know a line was still connected and going unpaid. Supposedly they emailed me the notice to my dead old work account and that I should have made sure they had an updated email address before I canceled my account. So fine, I argue with them for a while and get nowhere so I figure I'll just sign my wife up an account instead and worry about the fees later. No go - they lock the devices to individual users accounts. You can't switch them to another account even if you've previously disabled the phone from your account to add a different, more expensive, phone to your account. Okay this sucks - I check the packaging and none of the phones says anything about being locked to the vendor let alone to a specific account. The only note I have about this policy is a blurp that came with the original phone I got with my service and I'd assumed it'd only count for that phone as they gave me a discount off the price for signing up. The other phones I'd bought I couldn't get the discount because I was already a Vonage customer. Several hundred dollars down the drain with some nice VoIP phones I can no longer use at all and I chose not to open my wife a new account if I couldn't use the phones I'd already purchased.
This is ass stupid behavior from a company. I had been a loyal customer who frequently told people how good their service was. Now I tell them how much Vonage sucks and to beware their dishonest business practicies. Brilliant move. Giving me a $100 credit for service I didn't use would have got my business back for years to come.
At what price learning? At what cost wisdom? The price is a man's peace of mind, and the cost is his life.
If a job's not worth doing, it's not worth doing right.
I see from the article that the patent system is working as intended.
Patents really exist to slow the pace of innovation down to the point where the legal system can deal with it. They are also intended to protect the large economic organizations from threats by smaller corporations that may not be able or care to carry the loads for the system that the larger entities do. (However inefficiently.)
That patents promote innovation is a propaganda line that has never been true. Patents were created as a mechanism to prevent the rapid spread of a technology that threatened a royal monopoly in the late 1600s. They have always been no more than a way to slow down or stop change in the economy.
Preventing other people from using new ideas is all patents allow anyway. To really use a patent, you have to have a large amount of money to spend on lawyers. The results are usually chaotic, with the normal result being that the side with the most money wins. Often by bankrupting the other side with legal bills. Private patent holders are even told this in court, with the judge agreeing. There are exceptions, mostly when the patent owner is a law firm (Patent Troll). Even then the systems works, as the Trolls increase the cost of doing anything in a new way to the point where only truly outstanding ideas are ever doable.
The problem here is that this crowd (Slashdotters generally) doesn't understand the real reasons for the system. They are falling for the propaganda reasons, which are obviously not working. If you understand the real reasons, the system is working just fine. Those very public reasons of 'promoting innovation' are only out there to dupe the masses, and allow for the usual corruption at the top to continue.
Next thing I know, you will be claiming that drug patents reduce the cost of drugs. I guess P.T. was right, there really is one born every minute.
Everybody knows 3 people with my name.
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.
I am Homer of Borg. Resistance is Fut.. Mmmmmmmm, Donuts!
Let me start by saying i know very little about the specifics of this case. I also believe that there is a time and place for some sort of patent system (whether the current system is flawed, I don't know). Alot of the posts have critized the patents for stiffling progress. I'm wondering if these responses have been gut reactions reactions, or if these posters know something i do not. Does anyone know which patents are in question? Of those people who do, does anyone have the technical and legal expertise to distinguish a valid patent from one which should never have been granted? Does Sprint have a valid case for any of the patents in question? I'm not posting to defend sprint. I'm just curious what has tipped so many peoples opinion in favor of Vonage. What is it that you know that I don't?
From the parent post pdf:
Sprint filed this lawsuit in October of 2005, asserting infringement of sixty-one claims from seven representative patents from its patent portfolio. The patents in suit can be divided into essentially two groups: the '301 Family Patents and the '605 Family Patents. The '301 Family Patents include U.S. Patent Nos. 6,473,429 (the '429 Patent), U.S. Patent No. 6,665,294 (the '294 Patent), and U.S. Patent No. 6,298,064 (the '064 Patent). These three patents are collectively referred to as the '301 Family Patents because they all share an identical written description and drawings with U.S. Patent No. 5,991,301 and were filed as continuation applications of the '301 Patent. For priority purposes they all claim the filing date of the '301 Patent, which is September 8, 1995. Each of these patents is entitled "Broadband Telecommunications System," and generally discloses an invention which is "a system for providing virtual connections through an ATM interworking multiplexer on a call- by-call basis." '429 Patent, Abstract. The '605 Family Patents include U.S. Patent No. 6,452,932 (the '932 Patent), U.S. Patent No. 6,304,572 (the '572 Patent), U.S. Patent No. 6,463,052 (the '052 Patent), and U.S. Patent No. 6,633,561 (the '561 Patent). These four patents are collectively referred to as the '605 Family Patents because they all share an identical written description and drawings with U.S. Patent Application No. 08/238,605 (the '605 Application, now abandoned) and were filed as continuation applications to the '605 Application. For priority purposes they all claim the filing date of the '605 Application, which is May 5, 1994. Each of these patents is entitled "Method, System and Apparatus for Telecommunications Control," and generally discloses an invention that "includes a method, system, and apparatus for providing communication control." '932 Patent, Abstract.Who is John Galt?
You mention, skype, which is a voip company, but there are using their own proprietary method. Vonage otoh, is using SIP (session initiation protocol) which is the standard for voip. I just don't see what patents vonage could be infringing on but no one else is.
Do not anger the worm.
Heck, getting a naked DSL connection from the local telco provider in my region (Canada) means I also get hit with a $10 charge, (penalty) because I'm not also subscribing to their phone service. What kind of company bills you for NOT using their service? It's damned criminal, but there's precious little which can be done about it. I liked it waaaay back when Bell was a government controlled monopoly. When they pulled greedy tactics, the public was quick to slam them down. It was rare for me to ever see a phone bill over $25 a month back then.
Then the whole show was deregulated and competition opened up and everybody cheered because they were ignorant. (People! Oh lordy, but they can be sooooo dumb!) I was one of the only people yelling, "Don't you see? It's a trap!" --Before I finally switched to VOIP, $100 phone bills were not uncommon. And that didn't include ISP charges.
I love socialism. Competition is a great idea, but it doesn't work at the huge corporate level, because the big players are too few in number, they can cleverly jack up prices and nobody can sick the government on them to control their rampant greed.
If people were less easily fast-talked by corporate America, if our governing bodies actually served the people who pay for it, then this could be a really beautiful world.
The problem isn't just greed, it's ignorance.
Knowledge protects.
-FL
Umm, socialism doesn't work at the huge corporate level either. All socialism does is merge low and middle class into a single peasant class for easier management by the ruling class. The "big players" are eliminated and replaced by the government. There are no consumers left because individualism and choice is gone...not to mention that they no longer have money. Say hello to Big Brother.
Did you catch the part where I said, "if our governing bodies actually served the people who pay for it"? --Cuz, I like to qualify my statements even while ranting. In any case, with respect to Bell, the socialist system DID work and it worked exceptionally well. Whoever told you that socialism doesn't work was lying to you. --With regard to essential services, it works just fine, thank-you very much. How much do YOU have to pay for hospital visits? How many dumb wars has your military industrial complex hurled you into in order to swipe your tax dollars? How many kids are starving and illiterate in YOUR country?
And I'm certainly not against non-essential services competing. If two companies want to develop two different kinds of communication hardware to compete for the big Bell contract, then that's great. When Bell was under the government's thumb, (My thumb), because we have a nice paper vote here, we got to choose. And the whole, "Individualism and Choice" being threatened argument is just so obviously flawed, and can't believe Americans have been so effectively hog-tied by it. It's an emotional argument used by the dark side to trick people into making dumb choices. (I love how the right call the left 'bleeding hearts' when the right is constantly using emotionalism rather than logic to get its way.) But anyway, how does individualism and choice vanish when the Telco actually does what the people tell it to do? Cuz the reality is this: I don't WANT to have to choose between phone companies. I want the POWER to make one phone company do what I want it to do. --That is, an excellent job for a reasonable price. Having this power to make a difference creates choice. But people seem to fear work; they want companies to come to them to offer Red or Green. Lazy. It takes more effort, but the rewards are higher when you think, "I want Blue and I'm willing to make it happen."
Honestly, do you feel more individual power because you can choose which identical telco screws you? --I felt power when I could call up the CRTC (Canadian Radio & Television Commission) and say, "Hi, I just moved into a new place and Bell is telling me that they aren't going to hook me up unless I pay them $500 in advance because the last tenant didn't pay her bill and they think I'm going to do the same thing. This is ridiculous. I've got a business to run." and have them say, "They said that? They're not allowed to do that. You call them back and tell them that you talked to us. If they keep giving you problems, you call me back right away and I'll fix it." "Thanks!"
Problem solved. This is a true story. --And it happened after de-regulation, too. (Some vestiges of the socialist system haven't entirely eroded. But back in the day, such an ass-backwards problem would never have even come up.)
Man, I remember when Bell's customer service actually HELPED people. They didn't try to screw them. They solved problems. Man, what a great period of time. I miss it.
Which is not to say that the conservative creep isn't doing everything it can to destroy Canada. People, through ignorance, keep getting pulled down the conservative path. I've watched a lot of good things become undone over the last twenty years under conservative rule. Things which cost more now and no longer work properly.
You obviously don't live in Canada. And if you turn off US news (read: "propaganda pushed by threatened American oil interests who have a puppet in the White House") about Chavez, and tune into world news on the subject, you might begin to see Venezuela in a new light. I hear they've go