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Vonage Signs Deal to Escape Patent Infringement

Posted by Zonk on Tue Apr 03, 2007 10:16 AM
from the dodge-this dept.
Government The Courts Communications Patents The Internet News
Tone Def writes "In the wake of a court injunction barring Vonage from infringing on three Verizon patents, the VoIP provider has signed an agreement with VoIP, Inc. to carry all Vonage calls over its network. Two of the Verizon patents Vonage was found to have infringed covered connecting VoIP calls to switched networks, so the agreement means Vonage is no longer infringing those patents. 'By signing the agreement with VoIP, Inc., Vonage has provided itself with a measure of protection against the injunction. VoIP, Inc. owns its own network, describing VOICEONE as the "first, seamless nationwide IP network." Perhaps most crucially from Vonage's standpoint, VoIP, Inc. claims to own the intellectual property around its network and services.'"
+ -
story

Related Stories

[+] Vonage Loses VoIP Case With Verizon 150 comments
cdrudge writes "A federal jury on Thursday said Vonage Holdings Corp. violated 3 of 5 patents of Verizon Communications Inc. and ordered the upstart Internet-phone company to pay $58m in damages as well as 5.5% in royalty fees per month per customer. Verizon said it would seek an injunction to block Vonage from using its patented technology. The jury did reject Verizon's claim of $200m in damages and that Vonage deliberately violated Verizon's patents. As you might expect, Vonage said it would appeal the decision and seek a stay if an injunction is granted. Judge Claude Hilton set a hearing for March 23 on whether to grant an injunction."
[+] Vonage Barred From Using Verizon VoIP Patents 247 comments
thefiremonk writes "Bloomberg reports that U.S. District Judge Claude Hilton has issued a permanent injunction against Vonage. The goal: to stop allowing customers to make calls to standard phone lines. 'U.S. District Judge Claude Hilton approved Verizon's request for a block today in Alexandria, Virginia. Hilton said he won't sign the order before a hearing in two weeks on Vonage's request for a stay. A jury found March 8 that Vonage infringed three patents and should pay Verizon $58 million.' Does this spell doom for the already troubled Vonage? "
[+] The End for Vonage? 296 comments
TheRealSCA writes "The latest in Verizon vs. Vonage is in. The judge has basically stopped Vonage from accepting new customers. From the article: 'A judge issued an injunction Friday that effectively bars Internet phone carrier Vonage from signing up new customers as punishment for infringing on patents held by Verizon. Vonage's lawyers said the compromise injunction posted by U.S District Judge Hilton is almost as devastating as an injunction that would have affected Vonage's 2.2 million existing customers. "It's the difference of cutting off oxygen as opposed to the bullet in the head," Vonage lawyer Roger Warin said.'"
[+] Technology: Vonage Allowed to Sign New Customers 47 comments
terrymr writes "The Court of Appeals for the federal circuit has stayed the injunction against Vonage pending their appeal." The appeals judge agreed with Vonage's argument that the amount of consumer churn that Vonage or any telco suffers from would surely mean disaster for their bottom line, were they denied an influx of new customers.
[+] Technology: Vonage Admits They Have No Workaround 345 comments
drachenfyre writes "It looks like Vonage has no workaround for their recent patent infringements. This means if a permanent stay isn't granted it is likely that it will be the end of the line for Vonage. What will happen if millions of phone customers suddenly lose their service? Their own filing to the court stated 'While Vonage has studied methods for designing around the patents, removal of the allegedly infringing technology, if even feasible, could take many months to fully study and implement.'"
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  • How about the third patent? (Score:4, Interesting)

    by gravesb (967413) on Tuesday April 03 2007, @10:20AM (#18588467) Homepage
    I will assume that VIOP will indemnify Vonage when they lose a patent case in court, but what about the third patent Vonage "infringed" upon? What services will they have to restrict in order to avoid violating that patent?
    • The third has to do with accessing VOIP over wifi, so it would only affect that specific technology, which they could no longer support without affecting most of their users.
      • The only Wi-Fi device that I know of that Vonage supports is the WiFi UTStarcom F1000 [vonage.com], of which Vonage sells a locked-down version, but the same phone is used as a general SIP client for other VoIP services... how is it that selling that device could possibly constitute a violation of a patent about VoIP over WiFi? Also, what's different about VoIP over WiFi than VoIP over Ethernet?

        Also, Vonage provides SoftPhone accounts, where you run SIP software on your PC using Vonage SIP credentials... If I use th
        • VoIP over WiFi is very different than voIP over Ethernet. Sure you can pretend it isn't and in low interference situations all will be fine. But WiFi has some retransmission stuff built into the low levels of the protocol - at the frame level. If a WLAN frame is not acked it will be retransmitted often at a lower rate. So one 11Mbps frame gets dropped and the device ends tries again with a 5.5Mbps frame - since the data rate just halved this triples the transmission time for that frame. But it's just sendin
          • Thanks, that at least explains how they're different, which does clear up why Verizon would have patents involving WiFi in the first place.

            But even so, in the case of the one WiFi phone that Vonage sells, aren't they just using the manufacturer's stack, which would be handling all of that? It's a standard WiFi SIP phone, and as far as I know the firmware doesn't have any major Vonage modifications, other than being locked down to Vonage service. In the case of the softphone programs running on a PC, I

      • Holy crap. How can you get a patent on [using a network protocol] over [a network technology]. I'm going to go patent [HTTP] over [Ethernet]. Then I'm going to patent [DNS] over [A Packet Switched Network]. Then I'm going to patent [IP] over [Fiber Optic Cables].

    • Re:How about the third patent? (Score:5, Interesting)

      by BlueTrin (683373) on Tuesday April 03 2007, @10:45AM (#18588845) Homepage Journal
      From the vague description of the patents, it seems that these so-called patents are alit bit abusive, I wonder if the patent system should not be changed so in the case of an invalid patent, you would have to pay a fee for trying to abuse the system.

      There is no barrier to make a patent, for a company it is ridiculously easy and cheap, an australian lawyer even patented the wheel [bbc.co.uk] to prove the flaws in the system.

      I work in trading and saw that Goldman patented an automatic trading system, but the description is so vague that anything that would be a database + a statistical engine + an order system could fall under this patent, it is quite ridiculous since there is no other way to make an automatic trading system, and since the patent is only from the late 90s I know that people wrote such systems before they patented it ...

      IMHO an invalid patent should be punishable by a fine.

  • Curses!!! Foiled Again!!!

    • Re: (Score:3, Interesting)

      by mccrew (62494)
      While switching to VoIP stops the infringement, hopefully, Vonage is still very much likely to be on the hook for past infringement. Standard disclaimers apply ("IANAL"), but this would seem to be the pattern based on other recent patent infringement disputes in this space.

  • Just curious how old are these patents (Score:3, Interesting)

    by codepunk (167897) on Tuesday April 03 2007, @10:26AM (#18588581) Homepage
    I handed a boss of mine a study paper about 12 years ago that covered probably 90% of the claims. I don't think it was ever released public which would kill any possible use as prior art.

  • VoIP calls from WiFi Phones? (Score:3, Insightful)

    by Paulrothrock (685079) on Tuesday April 03 2007, @10:27AM (#18588591) Homepage Journal

    How can you patent something like that? Could I patent "VoIP calls from Ethernet connected phones" or "VoIP calls from token-ring connected phones?" Something also tells me Verizon only patented this so that they could squash competition and keep their increasingly useless POTS system viable.

    This just shows how our patent system is completely incompatible with TCP/IP. If you can patent one layer of the stack, you can halt innovation on other systems.

    Also, aren't there Skype phones that do this? Why isn't Verizon suing them?

    • There was also Net2Phone, which Vonage's lawyer brought up during the trial, but apparently nobody was paying attention...

    • Also, aren't there Skype phones that do this? Why isn't Verizon suing them?

      don't worry, once a sufficiently large portion of the customer disconnections are attributed to skype, they too will be sued.

      it's importnat, however, to wait for the "infringer" in question to get close to profitability before slapping the infringment case on them.

    • Re: (Score:2, Informative)

      by mattatwork (988481)
      There are a number of providers besides Vonage... * AT&T CallVantage, Broadvoice, Cable & Wireless (Global product), Clearwire (only for Clearwire Wireless customers), Comcast, Covad (ClearEdge Office, Pro and Integrated access), Cox Communications (Northern Virginia)(Parts of Rhode Island), Engin (Australia), FaktorTel (Australia), fonVantage, iTalkBB, Jajah (connects two regular telephones), Lingo, Mediacom, Net2Phone, Packet8 (8x8), Primus Canada, Qwest, Sipgate (Germany, Austria, UK), SIPphon

    • Re: (Score:2, Interesting)

      by cdrguru (88047)
      Fortunately, the "increasingly useless POTS" system is the one that has requirements for reliability and service. There are no such tariffs in place for VOIP - the level of service is up to the vendor and if they go down for 24 hours no regulator is going to be at their doorstep. It is the same as if your cable TV goes out for 24 hours. No big deal.

      Vonage would not be able to compete with Verizon or any other POTS provider if the same rules were in place on it. Neither would the other VOIP carriers. Th

      • Pure FUD. (Score:4, Insightful)

        by Belial6 (794905) on Tuesday April 03 2007, @01:24PM (#18591371) Homepage
        Pure FUD. POTS is referring to the analog service that is provided by the incumbent phone companies. If the existing analog service disappeared tomorrow, you would just see a rise in competition from digital services. You would also see better SLAs from digital providers. The biggest problems with things like 911 on Vonage are not caused because Vonage cannot or will not provide the service. It is caused because the current POTS providers put up actual road blocks to prevent interoperability. Once set up, my ISP has had 99.9% up-time. I have lived in places in the US that had worse up-time. My cell phone has never been down when I tried to use it inside my home. The whole, "Your going to die if you don't pay the incumbent phone company." line is FUD. Pure FUD. When you stop leaving the safety of your POTS, then you can talk. I personally leave my home on occasion, and thus have no access to 911 via my POTS line.

        • My cell phone .... I personally leave my home on occasion, and thus have no access to 911 via my POTS line.

          Right. And that cell phone has no access to 911 at all? Your point is mostly chicken-little-screaming, most likely from someone with little to no actual knowledge of any of the systems.

          Is a POTS line a requirement? The answer is increasingly "no". Cell phones, even ones without a service plan, can call 911. For that matter, so can any POTS line still physically connected to a switch. The issue wi

          • Uh, I don't know if you misunderstood my post, or are confusing things on purpose. My point was that when you leave your house, you have no better 911 service than if you have VIOP. Cell phone 911 works basically the same as VIOP 911. Thus, if you leave your home, you are obviously not all that concerned about the difference between POTS 911 and non-POTS 911.

            "The issue with voip-911 has NOTHING AT F'ING ALL to do with local phone companies."

            Wrong. Vonage offers E911 in many areas. These are the a
          • 3 nines uptime does not cut it in the telecom world

            Who lives in the telecom world? Three nines is what, 1.5 minutes of downtime for every 24 hours and 5 nines is 0.015 minutes of downtime? Does it really matter at this point? Doesn't everyone own a cell phone at this point anyway?

      • I can order a pizza online, and if there's a fire I have my cell phone.

        And there's absolutely no reason IP networks can't have the same service requirements that POTS systems have. In fact, Verizon's FiOS system installs a UPS backup to allow access during power outages. For a fifty bucks, I can get the same reliability from my cable broadband service.

        • there's absolutely no reason IP networks can't have the same service requirements [as] POTS

          Except they aren't designed for or dedicated to voice traffic. It's an unreliable transport medium. Placing traffic that requires some measure of reliablity on such a system and then bitching about it being unreliable is laughable. Mandating reliablity standards suitable for voice is also laughablly misplaced. IP networks are reasonablly reliable for most purposes, but not critical, emergency communications.

          Verizo

      • Re: (Score:2, Informative)

        by nolife (233813)
        No one is milking off of anyone. If you are making a call between two people using VoIP, there is no POTS involved at all. Therefore, no POTS fees and no additional costs to the POTS providers. The call is 100% void of any POTS lines. If you are making a VoIP --> POTS call, only half of the people involved are using POTS, and that person with the POTS line is paying the POTS provider for the POTS service. Where is the something for nothing coming from that you speak of? What if we were all using CB

    • This just shows how our patent system is completely incompatible with TCP/IP.
      Patents are incompatible with the Internet.
    • Skype is based in Belgium, where Verizon's patents won't hold water. They could still get some sort of injunction to stop any US based activities that Skype engages in, but they are not as lucrative and straightforward a target as Vonage.
  • C'mon Zonk, seriously. "Vonage signs deal to excape patent infringement"?! They've already been ruled against, so no deal would allow them to "escape patent infringement", aside from a deal with Verizon. It merely allows them to continue operating whether the judge rules to enforce the injunction against them now or allow them to appeal first.

    Seriously, can we get some editors that are worth a damn!
    • So? They really are escaping the patent infringement... in the future. One would assume any mention of escape to involve changing the status of the escapee in the future. You don't generally hear about people escaping something and changing the past, unless you're driving a fine DMC made machine.

      This deal means that the WORST that can happen is that Vonage pays some fixed-price settlement/damages/whatever and then the problem is done with. Vonage won't get stuck with an injunction or paying eternal license

      • Re: (Score:2, Informative)

        by Raistlin77 (754120)
        From the article:

        Last month, a federal jury found that Vonage's VoIP services infringed on three patents owned by Verizon after deliberating for less than a day. Two of the patents cover connecting VoIP calls to public switched telephone networks (PSTN); the third covers VoIP calls made using WiFi phones. While the jury found that Vonage did not knowingly infringe on Verizon's patents, it did award the telecom $58 million in damages.

        Both the summary and the article CLEARLY state that the deal is to prot
        • To clarify, it would have made sense to use escape if this deal somehow got them out of being ruled against and fined. The way the title uses escape, it implies just that. When I first read the title, I immediately assumed that they struck a deal with Verizon, because that is the only way they could have "escaped" the lawsuit.
        • Isn't Vonage required to pay fees to Verizon based on subcription revenue? How does this affect that? Do they still have to pay (other than the $58M, of course)?

    • IANAL, but it seems that by taking this step, they are making the appeal process more favorable, as they will be able to point to this and go, "See, we're not infringing on the patents anymore!" The main suit will still go forward, as Verizon can continue to claim damages for the period that Vonage was infringing, but no further. This might even lower the amount of damages awarded. That and Vonage gets to keep operating.

      I saw this lawsuit as a cheap and dirty way for Verizon to work its way into Vonage, a

  • I think I speak for everyone when I say there are far too many letter 'V's in the summary. Let's tone it down, eh, Zonk?
  • They should save time and rename themselves "pwnage" right away.

  • Vonage says it is NOT patent-related. (Score:5, Informative)

    by Dekortage (697532) on Tuesday April 03 2007, @11:49AM (#18589785) Homepage

    Note the end on the Ars article:

    Update: After the story ran, Ars was contacted by a Vonage spokesperson that claimed that the agreement with VoIP, Inc. has "nothing to do with the patent situation." She described the deal as another termination deal similar to those Vonage has signed with other carriers, reiterating that the agreement was unrelated to the Verizon agreement. However, an unnamed source at VoIP, Inc. suggested to TelecomWeb that Vonage would indeed be using its network to carry its calls, while refusing to speculate about the patent dustup.

    So supposedly it's just biz as usual.

    I am a Vonage customer. I'm actually satisfied with it, despite all the negative reviews that other Slashdotters give it. It is still more reliable and higher-quality than my land line ever was. Verizon owns the physical lines in my part of New York. As Verizon's own linemen have told me, the switching equipment in my neighborhood is so old that it can't support caller ID, for example, and dial-up phone connections (in case of cable modem downtime) max out at 14.4k because of the fuzziness and static on the line. And Verizon has no plans to upgrade. Thanks. (Of course I can't use dial-up over Vonage, but I have an alternative backup -- wireless EVDO service, at near broadband speeds... sadly THAT is through Verizon because they have the best wireless service in my area.)

    • I am a Vonage customer. I'm actually satisfied with it, despite all the negative reviews that other Slashdotters give it. It is still more reliable and higher-quality than my land line ever was. Verizon owns the physical lines in my part of New York. As Verizon's own linemen have told me, the switching equipment in my neighborhood is so old that it can't support caller ID, for example, and dial-up phone connections (in case of cable modem downtime) max out at 14.4k because of the fuzziness and static on the

      • Yeah, what you said.

        I think of it this way... when ranked against tech companies, Vonage really isn't so good. When ranked against phone companies, it's a bit above average. Your choice.

    • I can't use dial-up over Vonage

      Then don't tell my modem! It can connect at 50K pretty reliably when my cable company is not having a bad packet day. Of course, I do this to test modems, not because I need dial-up. I even have my Vonage box working with my DirecTivo for its once every few months call out. (After a while, I get tired of it whining at me...)

      What's been pissing me off lately is that some calls that are supposed to forward, don't. (I have calls forwarded to my cellphone, and because of the M

      • Interesting point about the modem. Of course, I would use the modem in case my cable modem was down for some reason (== Vonage being down) so it's a moot point for me.

        You also said "but at least with a landline, if you have a problem, Bellsouth (or whoever) can't point fingers at somebody else." That's not true where I lived. Verizon may own the lines but they frequently pointed to everybody and their mothers for problems. For example, the Verizon customer support line would even tell me that the lack

    • Have you tried cancelling your vonage service?
      I had vonage for ~1.5 years. I was quite happy with their service. Other than the fact that my internet would die when my 900KHz cordless phone would go off, everything else worked fine.

      However...I had to move eventualy and so decided to cancel my vonage service.

      On 3-4 different phone call attempts to their customer service (which appeared to be in India), they would intentionally hangup the phone on me after I had been on hold for over 45mins each time. The lin
  • Old: Can you hebzz*static*shhme now?
    New: Can you [silence]me nononononow?

  • The whole case was BS (Score:1, Insightful)

    by Anonymous Coward
    All the old telcos are circling the drain and this was an attempt by one of the most useless ones to stem the tide. I used to deal with them when they were still GTE and let me tell you, they made AT&T look like saints. I have some advice for Verizon and anyone else who wants to take this tack. You aren't saving yourselves. You aren't making companies like Vonage look bad and by association making yourself look better. You are hastening your own demise.

    Hop over your chinese firewall and talk to you
  • Call quality over Vonage has dramatically declined in the last few weeks, I guess this explains it..

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