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."

Good!

[norminator (784674)]

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

Re:

[jez9999 (618189)]

What is there to appeal against? "The patents system is fucking retarded and you should throw the case out on principle"?

Re:

[Planesdragon (210349)]

What is there to appeal against? "The patents system is fucking retarded and you should throw the case out on principle"?

No. Both the structure of Congress, our electoral system, and the absurd extremes of the 1st and 2nd amendment prove that "fucking retarted" doesn't disqualify a law.

I'd go with the simple "that patent is invalid" argument, and if that doesn't work a "they're a monopoly and should be made to license that patent for a court-determined cost" argument.

Vonage is likely saying....

[8127972 (73495)]

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

verizon will do whatever it takes to win

[by Anonymous Coward]

i work for a CLEC in NH. Verizon continually changes the rules
on us to make our lives difficult. I hope vonage wins the day.

Re:

[TheSHAD0W (258774)]

e.g, please?

Re:

[Shishak (12540)]

I OWN a CLEC in MA and Verizon does NOT change the rules on us. The rules are pretty straight forward, read 'The Act' and subsequent FCC TROs. The FCC DOES change the rules on occasion, sometimes for the good, sometimes for the bad. The biggest problem is that the 2 largest voices against the RBOCS were AT&T & MCI. Those voices have been silenced.

The single most troubling word in 'The Act' is 'impaired'. The RBOCS must provide a service to a CLEC at Unbundled Network Element (UNE) pricing if

still could be screwed?

[tedshultz (596089)]

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 (820751)]

I have a hunch that Vonage will survive http://gigaom.com/2007/04/08/voip-patent-mess/ [gigaom.com] 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 (175092)]

Wait for the patents to expire?

Re:Ok, so now what?

[morgan_greywolf (835522)]

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 (843627)]

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.

Re:

[Workaphobia (931620)]

As someone who despises both companies, I too hope Vonage prevails. It will be a sad day if the bigger player gets even more power. Underdog competition benefits the rest of us.

Re:

[rm69990 (885744)]

If they were smart, they would be spending this time also working around the patents (if possible) so they could also survive an injunction. Of course, it may not matter. Vonage is hemmoraging cash at an unsustainable rate. They only have $550M in total assets ($500M in Cash and Short term investments) and they lost $120M last quarter alone.

Re:

[vertinox (846076)]

Well... 15 years ain't that long.

Hopefully, mankind in the next few years will patent every obvious idea possible so that by 2030 we can get back to actually inventing real non-obvious inventions.

Not so fast on that 'huge sigh'

[morgan_greywolf (835522)]

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 (927319)]

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:

[greenbird (859670)]

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 [american.com] 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 (1075137)]

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:

[(A)*(B)!0_- (888552)]

"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."

What makes you think Verizon is willing to license to Vonage?

"All this posturing is merely a game of trying to reach the minimum amount of royalties they have to incur."

Or it's a matter of Verizon trying to sue Vonage out of business.

"The patent business is to profitable to jeopardize by bringing an argument to court."

Huh? How do you think the injunctio

Re:

[Shambly (1075137)]

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

Re:Corperate America wins again

[NeutronCowboy (896098)]

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 (784674)]

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).

Re:

[cdrguru (88047)]

The problem is that Vonage relies on Verizon and other telephone companies to be there to support the Vonage product. Without Verizon DSL, they would lose a substantial fraction of their customer base.

This means that Verizon is supporting their competitor, something I bet they would rather not do. They are going to get turned off, somehow or at least prevented from using Verizon's infrastructure to compete with Verizon.

Re:

[H8X55 (650339)]

using the Internet isn't supporting the Vonage product. Unless you also say ISPs support child pr0n.

what I do w/ my internet access is my business, be it play games, post on slashdot, or establish internet phone service.

You're also forgetting cable. In my area (somewhat rural Northwestern Virginia), cable is far more prevalant than DSL. Also in my area, there is no Verizon DSL package that doesn't require at least a basic home phone service.

I imagine that some users could have DSL through Verizon,

I would have thought...

[by Anonymous Coward]

this to be a no-brainer, considering what SCOTUS has already said about injunctions. This [wikipedia.org] 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 (534437)]

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.

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

[grasshoppa (657393)]

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.

Except to shutdown the most public use of VoIP outside of any physical medium carrier. Or, in verizon's case, outside of their own business.

That'd be a huge bonus to them.

Re:

[soft_guy (534437)]

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. Of course, I am hypothesizing on the premise that Verizon is trying to act like a patent troll.

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

[grasshoppa (657393)]

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.

Does the general public know?

[RobertB-DC (622190)]

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 [911voip.org] -- 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:

[ivan256 (17499)]

especially the non-technical ones who don't even understand the 911 and VoIP thing

Given that many "technical" people still don't get the 911 thing (and claim it's way worse than it actually is), maybe it's for the best...

It wouldn't be the end of the world if your phone company went out of business and you had to sign up with a new one. Especially in the age of number portablilty.

Re:

[HolyCrapSCOsux (700114)]

I have Vonage. My other options are Cox (VOIP) or Embarq (POTS)
I have internet through Cox at the moment, but their VOIP costs more than Vonage.
I will fight tooth and nail going back to Embarq(Formerly Sprint).
My wife has had the same phone number her whole life. I can just see something going wrong and losing the number. I'd probably get a divorce.

Re:

[Jett (135113)]

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.

Re:

[ivan256 (17499)]

Actually, apparently you do get it.

Unfortunately many techies read way too much into the situation and assume that you get sub-par E911 service on your Vonage phone. It's just plain not true. The only additional complication is that you need a UPS for your router so you can call 911 when the power is out.

Re:

[cdrguru (88047)]

It wouldn't be the end of the world if your phone company went out of business and you had to sign up with a new one. Especially in the age of number portablilty.

Except that Vonage then goes out of business because all you can call are other Vonage customers.

Vonage counts on the existing telephone service being there and working for all non-Vonage customers. This was never about putting the existing tariffed telecoms out of business, it was about reselling their services with a different wrapper.

Net to Phone

[mastershake_phd (1050150)]

Now they just need a new way to get calls from the net to a phone line. I wonder if anyone has patented taping a phone to a speaker.

Re:Net to Phone

[dattaway (3088)]

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!

Verizon's Bitch Whore...

[Frosty Piss (770223)]

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.

Re:

[PPH (736903)]

Meanwhile, Vonage has some more time to research prior art on tying packet-based telecom systems to the PSTN. And they may very well find them. I've seen exmples of this nearly 30 years old.

Verizon's patents may prove to be worthless.

How about..

[loconet (415875)]

I'm not too familiar with what exactly is going on here and the reach of the issues but how about Vonage Canada? Did Verizon register the patent up here as well? Does it even matter (considering traffic still goes through American based technology/infrastructure)?..

We have a stay! Sign up today!

[searchr (564109)]

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!]

Link to the actual text of the patent in question

[Dejohn (164452)]

Here's the patent Click Here [uspto.gov]

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

[P3NIS_CLEAVER (860022)]

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

Is V the new X?

[slapout (93640)]

Vonage, Verizon, VA, VoIP. Too many Vs!!

Jeff Pulver claims prior art....

[Newer Guy (520108)]

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 [pulver.com]

Verizon is looking more and more screwed every day....

Re:

[CastrTroy (595695)]

That reminds me of the blackberry case where there was an injunction for everybody except the US government. Wouldn't want your elected representatives to go without their blackberry, they might actually see how messed up the patent system really is. Luckily in this case RIM came up with a technical work-around and never had to actually shut down their system.

Re:

[revlayle (964221)]

So how do you get a actual phone number tied to your VoIP and how can you dial out to an arbitrary phone number? If I knew how to do that, I wouldn't get Vonage (or Verizon) either!

Re:Vonage sucks donkey balls, no, really!

[Mordaximus (566304)]

Through any number of wholesale VoIP providers. This might help : http://www.voipproviderslist.com/ [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:Vonage sucks donkey balls, no, really!

[by 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!