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Vonage Barred From Using Verizon VoIP Patents

Posted by Zonk on Fri Mar 23, 2007 01:16 PM
from the those-are-my-patents-do-not-touch-them dept.
Businesses Communications Government The Courts Patents News
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? "
+ -
story

Related Stories

[+] Vonage Signs Deal to Escape Patent Infringement 60 comments
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.'"
[+] 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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Vonage Barred From Using Verizon VoIP Patents 50 Comments More /

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  • Once again Big Business wins and the customer get screwed.


    Isn't Democracy wonderful?

    :)

    • Aren't all? (Score:4, Insightful)

      by lenne (1050888) on Friday March 23 2007, @01:35PM (#18462111)
      Aren't all voip companies doing more or less the same?

      How many ways are there to connect voip to pstn?

      Leif

    • Re: (Score:3, Interesting)

      by antarctican (301636)
      It is yet again another perfect example of how patents actually hinder innovation rather than spur it. A sad day.

      I haven't been following this but I'm not curious to dig deeper to see what exactly these patents are. As in, is it as simple as a patent on network->land line calls? And if so, that's not only an overly broad patent, but could mean the doom for the entire coip industry. Or even open source projects such as Asterisk. I certainly hope this patent turns out to be some very specific technolo
      • Really?

        Does Verizon pay every ma and pa phone shop who's lines they use passing Cell Calls to land lines?

        I highly doubt it.

        • Re: (Score:3, Interesting)

          by URSpider (242674)
          Really?

          Does Verizon pay every ma and pa phone shop who's lines they use passing Cell Calls to land lines?

          I highly doubt it.

          Why do you doubt it? Of course they pay them. Check out this recent story [techdirt.com] on a company that was making millions off of these payments by redirecting incoming calls back out over VoIP, basically a form of bit-laundering.

          And, it's "whose," not "who's."

      • Re: (Score:2, Insightful)

        by phinsxiii (1078585)
        Really?

        What about the Billions of taxpayer dollars that the Bells received in the 90s to upgrade the infrastructure that they still haven't halfway finished? You remember fast access to every doorstep? Well that has only turned out to be limited to major metropolitan areas. I still can only get fast access to my doorstep through my cable company. Bellsouth has yet to provide DSL, and I live in a fairly large city.

        No. This is pure greed. Vonage forced the Bells to reduce their pricing before they were

          • Re:So Much For Customer Service (Score:4, Insightful)

            by dgatwood (11270) on Friday March 23 2007, @04:19PM (#18464953) Journal

            How do you steal something that is nothing more than the IP equivalent of what HAM operators have been doing for decades [wikipedia.org]? It's just a simple medium change, same as any other medium change. The fact that Verizon was able to get a patent on such a breathtakingly obvious thing is appalling, and the fact that the patent was upheld, triply so. It is a completely obvious extension of something that has been done for many, many, many years. Hell, I seem to recall computer modems that could be adapted to do this sort of thing back in the 80s.

            The fact is that this is just the old school telephone industry using lawsuits to protect their obsolete business practices and try to mask the fact that they've been charging line switching rates for packet switching long distance service for two decades. Verizon deserves to get their asses handed to them, and if Vonage is going to go under, it is the responsibility of other VoIP providers to prop them up so that they can continue this fight, for if it is settled in Verizon's favor, it will decimate the VoIP industry.

            Either way, screw Verizon. Long distance communication is what video chat services are for, and they don't cost anything, unlike VoIP. I don't remember the last time I used a landline telephone regularly, VoIP or otherwise. Even VoIP is too expensive for what they actually provide. :-)

      • I think you are looking at two very different problems here. The cost of using the network is different from the technology to connect to a network. Presumably Vonage has to pay a connection fee for the physical connection to phone networks and this should cover usage cost of the network. As for connecting to the network, there are probably a fairly limited number of ways to interface with the phone network and anyone looking to connect would reach a similar configuration. For the Universal Service Fund

      • Re:So Much For Customer Service (Score:4, Interesting)

        by mabhatter654 (561290) on Friday March 23 2007, @05:38PM (#18465769)
        but Vonage does pay for the lines. They pay to have "phone lines" to the demux box that down coverts from the network to phone company lines to make the calls. As well as for the network bandwidth they use.. fat pipes 24x7 cost thousands of dollars a month. The joke of the whole thing is that they are most likely using off-the-shelf phone company equipment turned around backwards... instead of binding 2-3 T1 INTO their company they are sending the phone calls back OUT in the proper format.... It's genius.

        I find patent infringement hard to swallow though. This is all off-the-shelf equipment, the patents should have been paid for with the equipment purchase.. so maybe it's a software patent on moving the data type "phone call" from an internal network to the phone company network. Either way, the Phone company and equipment maker has been well paid... and they've found a technicality to sue on.

        As far as the phone company not getting their "fair share", realize in most cases a phone call is only a 28.8k stream for them... and they pay "long distance" over the same pipes we use the internet for.... in other words typical long distance calling is ALREADY VOIP and customers are being raped for cost of voice (28.8k * $.15/min) compared to data (1Mb/S for $39/month). Phone companies need to adjust their models to better reflect the cost structure... perhaps we should pay more for the higher speeds (6mb) but less for basic (768k) and do away with POTS altogether.. it's a quick change of boxes at your house for most people.

  • well (Score:3, Funny)

    by mastershake_phd (1050150) on Friday March 23 2007, @01:20PM (#18461803) Homepage
    They better come up with a none-infringing way to send calls from the internet to a phone line. Maybe a speaker a phone and some duct tape?

  • Yet another reason for patent reform (Score:5, Insightful)

    by Overzeetop (214511) on Friday March 23 2007, @01:20PM (#18461805) Journal
    Actually, it's this kind of patent use (abuse) - restraint of trade - that should be forbidden. It should be prevented becuase of the monopoly and incumbent carrier status that Verizon holds on the wired telephone market.

    They are not using the patents to forward the condition of man, but rather to choke off a competitor in an estabilshed industry with an (effectively) insurmountable cost of entry using traditional methods.

    It's no surprise that Verizon is one of the top ten hated corporations.

    • Re: (Score:2, Insightful)

      by operagost (62405)

      They are not using the patents to forward the condition of man
      That's not the purpose of patents. Patents are used to encourage invention by limiting the ability of others to copy the inventor's work during a limited period.

    • Re: (Score:3, Interesting)

      by Kenja (541830)
      OK.... so how big (in your opinion) does a company have to be before they should be forced to give away their research and Ip to competing companies?

      Not saying I agree with the situation, but the problem is not Verizon enforcing their patents but the patent process itself.
    • Every time this issue comes up, I have pleaded with nearly everybody to make a clear cut example where patents were actually useful to anybody outside of the legal community.

      There is one and only one semi-useful function that patents actually serve: they document the historical development of technology in a systematic fashion. In other words, the USPTO is really a bunch of poorly disguised historians and nothing more.

      I have known many individuals who have spent fortunes on developing patents, and I've bee
  • This is what happens when you have technical cases decided by 12 ordinary citizens too stupid to get out of jury duty. It's why IBM doesn't want the SCO case to go to trial without a finding from the judge that it didn't infringe on any of SCO's copyrights. (If the summary judgement is granted and it does go to trial, the jury has to proceed on the idea that IBM hasn't violated any of SCO's IP.)

    Verizon is just suing to keep Vonage -- and every other company offering a similar service -- from making it irrelevant in the home phone market. Which is exactly what's happening.

    • Re: (Score:2, Insightful)

      by operagost (62405)

      This is what happens when you have technical cases decided by 12 ordinary citizens too stupid to get out of jury duty.
      I'm with you, dude. Voting is stupid too! Look at those idiots standing in line on election day! Better off playing WoW.

    • 1) There is no indication that a jury was involved. Trial by Jury is a right. It is not compulsory. Many corporate court battles take place without a jury because it reduces the risks associated with jurries

      2) What the F***? 12 ordinary citizens too stupid to get out of jury duty? Some of us are happy to serve and protect your right to trial by jury. The next time a Big Media legal thug drags your ass into a court room, you should be happy that a "smart person" who supports the right of trial by jury

  • Like, for example, the patents being infringed?
  • The aritcle is decidely non-technical, beyond saying the infringement was over "a technology," and "a method for allowing Internet calls to reach traditional phone lines." Anyone have any real details on what's being fought over?

    • Re:What's the infringement? (Score:5, Informative)

      by interiot (50685) on Friday March 23 2007, @01:37PM (#18462145) Homepage

      Here's the original 7 patents [ipurbia.com]... #6,430,275, #6,137,869, #6,104,711, #6,282,574, #6,128,304, #6,298,062, and #6,359,880.

      It sounds like #6,430,275 (tiff [uspto.gov], pdf [pat2pdf.org], text/png [google.com]) is the one that's the VOIP/POTS bit.

      • As someone that has been working hard to develop some competency with VOIP serving, it seems that anyone trying to do anything with http://www.openser.org/ [openser.org] without voicemail or POTS services is royally screwed.

        You can't touch it.

        This one deserves a headline at http://www.chillingeffects.org/ [chillingeffects.org].

        Anyone have any ideas as to how one can operate a VOIP server for free and still pay the bandwidth bill each month? I'm serious, I'm open to anything

      • Re:What's the infringement? (Score:5, Informative)

        by Jason Pollock (45537) on Friday March 23 2007, @05:43PM (#18465835) Homepage
        If it's 6,430,275, I personally developed the same class of product (PSTN/VoIP gateway with prepaid charging and authentication) in 98/99. We had been doing the same with ISUP and AIN variants even earlier.

        It should appear obvious to any telecom's protocol engineer that this is possible. It is even encouraged by the protocols.

        For example, INAP (ITU version of AIN in the patent), uses the same call model as ISUP, the circuit control protocol. ISUP and H.323 are both Q.931 protocols, therefore they also share the same call model. That makes it obvious (it was to us), that H.323 can be easily made to trigger an INAP call model. Obviously, the benefit is that this ensures that the applications can run unchanged on both the PSTN and the VoIP networks.

        And H.323 has been around for a lot longer than this patent.

        Once you understand that H.323 and ISUP are Q.931 variants, you see that all the work done to trigger IN applications on the various country and network ISUP variants is also prior art.
  • I thought that was just Vonage's marketing hype, not their business model!

  • Yep. (Score:5, Informative)

    by russotto (537200) on Friday March 23 2007, @01:27PM (#18461945) Journal
    If the order isn't stayed pending appeal, Vonage is dead; revenue drops to zero nearly overnight. So are all other independent VoIP providers, when Verizon gets around to crushing them.

    A concrete manifestation of a patent system out of control.
    • There are companies with bigger pockets who make money off of connecting VoIP calls to the legacy voice network (eg. Comcast, Time Warner, in combination with their cablemodem service), and presumably they're concerned about the patent. Is it ever the case that a larger company provides legal assistance to a smaller company in cases like this? Or would Verizon never go after Comcast/Time Warner if they think they'd lose, and therefore it's actually in Comcast/TimeWarner's best interests to stand back and

  • Hopefully they are forced out of business (Score:5, Interesting)

    by mulvane (692631) on Friday March 23 2007, @01:27PM (#18461949)
    Down with Vonage!! I had the service for 11 months. First 3 months was great, but then nothing but trouble after I deployed to the Gulf for 6 months. My wife tried to call them repeatedly to have it fixed and they kept blaming my ISP which after I got home I ruled out as it happened on my COMCAST, neighbors ATT, and Clearwire in local area. I could see one ISP being the problem, but not 3, and after I called again they said I wasn't qualified to make such assumptions. Funny, I can sure manage to make UHF/VHF, and SAT links and manage the LAN on a US Guided Missile Cruiser, but I wasn't technically smart enough to call the bullshit flag on the blame they focused on my ISP. Further, when the 10 month mark rolled around, I had military orders requiring me to move and at the time it was to a place I wouldn't have broadband, or hell, access at all, and they tried to pressure me into keeping the service and singing another year anyway. They just didn't get the fact that small islands sometimes don't have access. Then, they argued with me about how I owed them an early cancellation fee even though I was also canceling due to shitty service THEY couldn't fix. I had to end up also telling them a lie that I was not married, and I had no family who could make use of the account before they would close it. I had read horror stories at the time about people who had went over the 12 month period already and Vonage had refused to cancel the account, or had verbally said they would and the charges kept coming. I feared this so I even canceled the card. And low and behold, I started getting statements from my bank who issued a new card telling me about the activity that they were refusing.
    • You must have called the AOL customer service line by mistake.

    • Re: (Score:3, Interesting)

      by dattaway (3088)
      For me, Vonage had a good service, but they were too aggressive. I also had a well documented case against Vonage. Their service was good in my case, but cancelling was a problem that lasted a year. I quickly learned their customer service were script junkies who didn't have an option for "cancel." I may have been a test case for them to see how far people would take it. I ended up giving my card company a statement and a dispute. Then I called Vonage once again and it got into a long shouting match w

        • Re: (Score:3, Interesting)

          by drinkypoo (153816)
          Yeah, litigation just isn't necessary once we all have VoIP phones. That day is coming, albeit slowly. Sooner or later you'll just access people by DNS, instead of by phone number, making a VoIP call to them via IPv6. The telephone network as you know it is a strictly limited-time affair, and the cellular providers are the most scared because even 3G cellular data is SLOW AS HELL compared to, say, the current generation of DSL hardware, or WiMax, or basically anything else. I mean it's barely faster than sa

    • Re: (Score:3, Interesting)

      by dAzED1 (33635)
      I had great service, worked well when my net connection worked (and my net connection was indeed flaky), but I still canceled after a month and a half for various complicated reasons. They happily canceled, told me to keep the router, and said if I changed my mind to give them a call again. Was absolutely painless.

      My (true) anecdotal story conflicts with yours. Neither shows a trend.

  • These patents can't be valid (Score:4, Interesting)

    by spectro (80839) on Friday March 23 2007, @01:28PM (#18461967) Homepage
    "A method of translating calls between the Internet and standard phones, call-waiting features and wireless handsets"

    - So they have a patent on transcoding from/to VoIP?, there's got to be some prior art on that
    - Call waiting?... are you kidding me?
    - Wireless handsets?, how does vonage infringe that?, VoIP got nothing to do with wireless handsets.

    Vonage needs to hire themselves some real lawyers, Boies seems pretty good at dragging lawsuits forever.

    • Re: (Score:3, Interesting)

      by russotto (537200)
      Remember, for the purpose of demonstrating prior art, the prior art has to be pretty much exactly the patented invention. However, for the purpose of demonstrating infringement, the alleged infringer's product just has to be close. This is a ridiculous state of affairs.

  • Skype (Score:2, Interesting)

    by rebmemeR (1056120)
    How could this affect Skype?

  • Vonage's official response (Score:5, Informative)

    by rGauntlet (54921) on Friday March 23 2007, @01:30PM (#18461999) Homepage
    Via a Press Release on their site: http://pr.vonage.com/releasedetail.cfm?ReleaseID=2 35198 [vonage.com]

    One interesting tidbit:

    "We are confident Vonage customers will not experience service interruptions or other changes as a result of this litigation," said Mike Snyder, Vonage's chief executive officer.
    .
    .
    "Our appeal centers on erroneous patent claim construction, and we remain confident that Vonage has not infringed on any of Verizon's patents - a position we will continue to vigorously assert in federal appeals court," said Sharon O'Leary, Vonage's executive vice president, chief legal officer and secretary. "Vonage relied on open-standard, off-the-shelf technology when developing its service. In fact, evidence introduced in court failed to prove that Vonage relied on Verizon's VoIP technology, and instead showed that in 2003 Verizon began exploring ways to copy Vonage's technology," she added.
    • And this press release is NOT going to keep me from looking at transferring my phone service Real Soon Now(TM) to another provider. As much as I like Vonage, I'm not going to ride this roller coaster of not knowing if or when my phone service will go off thanks to a company I've never done business with.

  • Is the injunction legal? (Score:5, Interesting)

    by RingDev (879105) on Friday March 23 2007, @01:31PM (#18462025) Homepage Journal
    Seeing as how Vonage is required by law to connect callers to traditional 911 call centers (over standard phone copper) is the injunction, baring Vanage from connecting VoIP calls to POTS calls legal if it prevents those calls?

    -Rick

    • Re:Is the injunction legal? (Score:5, Informative)

      by cdrudge (68377) on Friday March 23 2007, @02:17PM (#18462839) Homepage
      There are many technical details why I think the injunction was granted but a stay will also be issued. You point out one very good one just because millions currently use VoIP. There also would be catastrophic damage done to Vonage if the stay was granted but minimal damage to Verizon (and what damage could be recouped) if the stay was granted but later lifted.
  • millions will be without phones soon!

    Yeah, anarchy! I hope that was the intent of the injuction.

    Tom
  • aren't the carriers required to provide access to 911, regardless?

    Anyway - nothing will actually stop any off-shore our out-of-country IP phone services unless that kind of services are blocked in the broadband network, and that may also prove both inefficient and causing a stir.

    A secondary problem that I have seen is that a majority of all VoIP to analog boxes are bound to a service provider. That actually limits the development of VoIP today since the users aren't able to change operator unless they b

  • Just a thought (Score:3, Insightful)

    by Cauchy (61097) on Friday March 23 2007, @01:40PM (#18462187)
    Have any of us bothered to look at the patents? Are they good and valid? Did Verizon truly invent something, and thus, perhaps, because of their investment, deserve some level of protection against theft in exchange for them contributing to the overall body of knowledge? Perhaps these patents are bogus, but I haven't seen anyone in this discussion yet attack Verizon/the PTO on the merits of the patents.

    I agree that the patent system is broken, but, as I've said before, patents are more important to the little guy than the big guy. Without patents, if I as a little person invent something, there is nothing to stop Microsoft or IBM or some GE from copying my invention. Then, it just becomes a matter of who can out market who, and the little guy will lose this battle.
    • I had a primitive voip-pots gateway back in oh... 95 or so, hacked with speak-freely and some
      old soundcard hardware. Worked pretty good too !

      j.
      • ...that I've seen the quality of "professional" IP counsel up close, I can tell you that many of them
        aren't any better at it than we are, believe it or not. I've got one of the better lawyers in the field
        as my patent attorney, and he's razor sharp and what meets your apparent picture of them. The previous
        joker, also a lawyer at the Law Firm we retained, heh... Many, VERY many of them only pretend to know
        what is and isn't viable or not. If I were Vonage, I'd have fired their litigators and got better one
  • The primary thing I care about is uninterrupted service, at my current service and price level, with my current telephone number.

    If Verizon intends to squish Vonage, they had better be completely prepared to seamlessly transition me to their service, at my current price and service level. If they are willing and able to do that, I'm OK with it. (Well, I'm not thrilled with this abuse of patent law, but I can't do much about that myself.)

    Is there anyway I can contact the court system and have them consider t
    • Cable companies are offering great bundles on their digital phone service bundled with high-speed Internet and digital cable. Comcast and Bright House Networks both offer service that competes with Vonage on price, but not on features. If I had to jump ship, that's where I'd go.

      (Disclosure: I've been a Vonage customer for more than 2 years, but I did turn down the IPO.)
      • Brighthouse certainly doesn't compete on price OR features. I pay about $30.15 a month with Vonage for unlimited nationwide (and some other countries that I don't care about). Bright House, for Tampa, is $39.95 *plus* fees, which according to a BHN rep, are about $8/month on $40, or around $48/month. You can get "Florida-wide" coverage for $11 less, but you have to pay another $4 for simple voice mail. Bright house, according to reps, doesn't allow simultaneous rings, e-mailed voicemail messages. According

    • Re:If Not Vonage, Then Who? (Score:5, Interesting)

      by jtn (6204) on Friday March 23 2007, @01:28PM (#18461961) Homepage
      You realize, of course, if Vonage is unsuccessful in having a stay granted and cannot develop a technical work around and thus departs from the marketplace, Verizon will become emboldened to press lawsuits against other voice providers using VoIP-to-PSTN gateway technologies? Goodbye Packet8, goodbye Broadvoice, goodbye VoicePulse...

      It would seem the only solution in the end is to entirely bypass the legacy PSTN system and encourage the people you call to switch to a VoIP solution so no calls are terminated by Verizon.

      • Re: (Score:3, Insightful)

        by wizbit (122290)
        I have Vonage, and this story obviously worries me quite a bit. But your point about Verizon misses the mark for its other services - Verizon are also providing competition in other areas (eg, cable TV). Comcast is the undisputed king in my area (Philly) but I am seriously considering switching to Verizon's TV service after seeing their lineup and pricing. Not to mention, I don't have many options here (no view of the southern sky = no satellite TV) and I'm tired of giving my money to the local monopoly - o
      • We need a "-1 wrong" mod.

        The quote is, indeed, said by Arthur Carlson. After all, it was HIS idea to drop the turkeys from the chopper.

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