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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.
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
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.
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.
If a job's not worth doing, it's not worth doing right.
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!