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Vonage Settles With Verizon for at Least $80M

Posted by Zonk on Fri Oct 26, 2007 08:31 AM
from the tough-room dept.
Patents Government The Almighty Buck The Courts News
netbuzz writes "Fresh off agreeing to pay Sprint Nextel $80 million earlier this month, Vonage has now agreed to compensate Verizon at least $80 million to settle their patent dispute, and the total could hit $117 million depending on the outcome of appeals Vonage has pending. 'If Vonage wins rehearing on either the '574 or '711 patent or if the injunction is vacated as to the '574 or '711 patent, Vonage will pay Verizon $80 million. If Vonage does not win rehearing on either the '574 or '711 patent, or if the stay is lifted reinstating the injunction, Vonage will pay Verizon $117.5 million.' And, of course, don't forget AT&T just recently opened charges against the company as well."
+ -
story

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An anonymous reader writes to tell us that following in the wake of their patent suit against Research in Motion (RIM), NTP has filed suit against Verizon, AT&T, Sprint Nextel, and T-Mobile for infringing on several patents. All of the patents in question relate to the delivery of email on mobile devices. "Five of the eight patents being used in the telco cases were the subject of NTP's 2001 patent suit against Research in Motion, the maker of the BlackBerry. In November 2002, a jury found that RIM infringed upon NTP's patents. The case continued to make headlines until 2006, when RIM agreed to pay NTP a settlement of $612.5 million, nearly four years after RIM had first been found guilty of infringing on NTP's patents."
[+] Vonage Hit With $69.5M Judgement 234 comments
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."
[+] Vonage Settles Patent Suit With Sprint-Nextel 45 comments
mytrip writes to tell us that Vonage has been able to settle their patent differences with Sprint-Nextel for a mere $80 million. This settlement resolves all pending claims by Sprint-Nextel as well as licensing Vonage to use over 100 patents and a $5 million advance in prepayment for services.
[+] Vonage Goes To Court III - The AT&T Suit 113 comments
kickabear writes "AT&T has filed a lawsuit against Vonage, claiming patent infringement. This is the third major lawsuit to have been brought against Vonage by a major phone company. Vonage lost the previous two lawsuits, brought by Sprint-Nextel and Verizon. How much more money can Vonage afford to give away? How can Vonage educate a jury on prior art? 'It said in a filing to the U.S. Securities & Exchange Commission that AT&T is seeking injunctive relief, compensatory and treble damages and attorneys' fees in unspecified amounts. Vonage said the lawsuit was filed in the U.S. District Court of the Western District of Wisconsin on October 17.'"
Submission: Vonage settles with Verizon for at least $80M by netbuzz (955038)
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  • Pattent Trolls (Score:2, Insightful)

    by Anonymous Coward
    "And, of course, don't forget AT&T just recently opened charges against the company as well."

    yea because AT&T invented voice over packet technology in friggen 2002. It never existed before that.

    voice over frame relay has been around for more than 20 years. telco's are a bunch of selfish a-holes who make outrageous claims that are allowed to go unchallenged. Its time for some vigilante justice... how about some random knee cappings ala Nancy Kerrigan on all members of the telcom board of directors.

    • voice over frame relay has been around for more than 20 years. telco's are a bunch of selfish a-holes who make outrageous claims that are allowed to go unchallenged. Its time for some vigilante justice... how about some random knee cappings ala Nancy Kerrigan on all members of the telcom board of directors.

      Even better. Hit 'em where it really hurts. In their pocket book. If enough people just simply stopped purchasing goods and services from Verizon, AT&T and Sprint-Nextel, the harm to those companies would be irreparable.

      • As the AC commented, that's bloody unlikely. I might be able to get by. I could switch to Alltel for cellphone service. Grandma? Don't think so.

      • Re:Pattent Trolls (Score:5, Interesting)

        by jonesy16 (595988) <jonesy.gmail@com> on Friday October 26 2007, @09:05AM (#21128011)
        I have to agree with the other poster whose comment got modded down. While I agree that not buying services from these companies would hurt them (duh), it isn't feasible. In most parts of the country you don't have too many options for a) land telephone, b) internet access, c) cell phone w/ reception. Odds are that in order to get at least one of those three services you're going to have to pony up to Verizon, AT&T, or Sprint. T-Mobile and US Cellular have pretty poor reception where I am. Verizon and Comcast are the only internet providers (and that's really a lesser of two evils) unless you want to go wireless (satellite, etc, $$$). And Verizon is the only POTS provider. So the only way that I can hurt them is to cease my communication to the outside world.

        The size of these companies and their control are beyond the scope of what consumers can affect. They muscle competition off of the playing field which has led to the helplessness of consumers at this point. But hey, it's part of the cycle. Another decade or so, after AT&T/Verizon/Sprint have all merged again and widened our collective sphincters a good couple of inches, maybe the governemtn will break them up and we'll start the whole cycle again.

        • Re:Pattent Trolls (Score:5, Insightful)

          by timeOday (582209) on Friday October 26 2007, @09:44AM (#21128507)
          I hate the local telco so much I went "vonage only." Through these lawsuits I'll still be paying the local telco anyways. You just can't escape.

          • Re: (Score:3, Insightful)

            by HumanPenguin (889927)
            Same here.

            but I am still stuck with the voids surrounded by sphincter muscles Comcast. It really is impossible to get a telephone line without one of the big phone companies or the cable monopoly now.

            Also as the main reason I have vonage is for free calls and a local phone line in the UK.

            There is no other US alternative.

            The world IS getting smaller and technology is passing the big Telco's because they have sat on their monopolies rather then use their innovations.

            instead of providing services customers wan

        • So the only way that I can hurt them is to cease my communication to the outside world.

          Okay, so where I am there is only Verizon and Bright House Networks for high-speed internet and Verizon is the only POTS provider. I use Bright House for Internet, Vonage for VOIP. I don't have a landline. I use Sprint for wireless because I'm stuck in a contract and unwilling to pay to get out of it. So of all the companies you listed, I only use one of them. I could just as easily switch to T-Mobile, though, once my contract is up.

          Like another poster said, you pick the most influential. Everyone boy

          • Sometimes it's not even as simple as just changing the "brand" of your high speed internet. In our town there is also a local provider called TBC for DSL internet. However, if you dig deep enough you find out they are just reselling you a Verizon DSL line. Congrats on limiting the damage to one company so far, I hope that our options continue to increase ;-)
        • Verizon and Comcast are the only internet providers (and that's really a lesser of two evils) unless you want to go wireless (satellite, etc, $$$).
           
          Wireless isn't necessarily expensive. I had a wireless broadband connection for a few years that was actually a little cheaper than my current Comcast broadband. It basically just used a dish on my roof that pointed at a tower a bit north of my house. I only switched to Comcast because the ISP was horrible...
          • OK, I concede that the price isn't as much of a factor. The problem is I can pay them $40-$50 / mo for a 256k line or get comcast/verizon at 6-10Mb for the same price. So it's only more $$ when you look at bandwith / cost.

        • Another decade or so, after AT&T/Verizon/Sprint have all merged again and widened our collective sphincters a good couple of inches, maybe the governemtn will break them up and we'll start the whole cycle again.

          Not likely-- the US government would prefer they did all merge, as it's then one-stop-shopping for the NSA. The US gov. would hate to have communications turn into a wild-west show of free market enterprise, as that could impede their wiretapping progress...

      • Re:Pattent Trolls (Score:5, Insightful)

        by Volante3192 (953645) on Friday October 26 2007, @09:12AM (#21128101)
        Hit them in their pocketbook? You know who that *really* hits, right? Customers.

        Hit them where it REALLY hurts. Pull away their sole right to the lines and put it in a government owned utility company whose sole purpose is to upgrade and maintain the lines. Slap em with common carrier status. Stick em in the Tower of London and make them part of the tour.

        We can do a lot better than just 'pocketbook' here.

        • Re: (Score:3, Interesting)

          by jimstapleton (999106)
          Actually, they don't have to go cold turkey.

          Find the most offensive one or two. Boycott them. They are forced to change to stay in business.

          Suddenly, the ones that you didn't boycott lose their market share as the formerly boycotted companies pick up a lot of clients. Even though they have had profit for a while, the non-boycotted companies will find their coffers significantly less lined. They now have to fall into line, and make the same changes.

          The trick isn't boycotting everyone, just one that can be in

          • Re: (Score:3, Insightful)

            by Shakrai (717556)

            Find the most offensive one or two

            That would be AT&T, followed by Verizon.

            Boycott them

            You can boycott them at one level but you can't escape the fact that sooner or later your money (however indirectly) will end up in their hands. I ditched Verizon POTS service for Verizon Wireless and later ditched them for T-Mobile. Now my money is going to little pink instead of big red, right?

            Of course T-Mobile has to purchase their connections to the PSTN from someone...... gee, I wonder who that is in New York State?

            Granted, it's still somewhat eff

            • he definetly had some good ideas - however he should have closed his mouth whenever he thought about social topics. The economic side of communism *might* work in a true democracy, or even a fairly true democracy with limited republic aspects.
    • What I particularly liked about that AT&T remark is how can there be so much overlap between the Sprint, Verizon and AT&T patents without SOME of them being kicked out for prior art?

  • Vonage looks great! (Score:4, Funny)

    by Big Nothing (229456) <big.nothing@bigger.com> on Friday October 26 2007, @08:37AM (#21127739)
    This "Vonage" company seems stable and solid - where can i purchase some stock in the company?

  • Don't forget, no net neutrality (Score:1, Interesting)

    by Anonymous Coward
    Once they finish paying all the phone companies for the patents, then the phone and cable companies will come back and demand extra payment to use their networks. Otherwise, Vonage customers will watch their service degrade until it's unusable. This will continue until Vonage is bankrupt.

    • Once they finish paying all the phone companies for the patents, then the phone and cable companies will come back and demand extra payment to use their networks. Otherwise, Vonage customers will watch their service degrade until it's unusable. This will continue until Vonage is bankrupt.
      Exactly. All of this corporate racketeering by the telcos has got to be stopped. Hello? EFF? Where are you?
      • Uhm, you state your support for Ron Paul in your signature. He is a libertarian, and he is the last person on Earth who will have the government interfere with the "free market." Not to start a slashdot political discussion, but honestly, if you want to support a candidate who might actually do something, you need to look for someone like Ralph Nader (who did fight big corporations, and won, prior to the god-awful Reagen presidency).
        • Actually, he's under the Republican flag in Congress. I don't think he's likely to win the Republican primary, though, so it'd remain to be seen if he'd want to jump ships to the Libertarian side of things, but they've already got their 4 candidates lined up.

          Even if he WAS Libertarian, it wouldn't be outside their scope to reform patent law, since it's a government-backed and granted monopoly and defended in a court of law at that.

          The nit pick then would be that it takes Congress to do that and not The Pres
          • Except that the telco problem is not a patent one, it is a monopoly one. Patents may be contributing factors, but without any government interference the telcos would be forced to form a trust and exclude companies like Vonage, something that they wouldn't require patents to do. Historically, that is why we started having a government regulated economy.
          • Ron Paul ran on the Libertarian Party ticket in 1988.

        • As corporations are a creation of the state, being pro-libertarian doesn't necessarily mean being pro-corporation. Personally, I'm all for getting rid of the fiction known as the corporation.
        • Uhm, you state your support for Ron Paul in your signature. He is a libertarian, and he is the last person on Earth who will have the government interfere with the "free market."

          What do you think patents are?
  • What if it wins both patents? Vonage shouldn't have to pay anything. Instead, they've agreed to be $80 million in protection money to the mobster Verizon. Can anyone say RICO?
    • Disclaimer: I work for Vonage (not for legal department) The reason we still have to pay as far as I understand it is because we never actually got a court to side with us on the issues of whether we actually infringed on the patents, and if the patents were obvious. The appeals court held up the district court's ruling on the two patents. So from that, we still are infringing in the view of the courts. The original ruling was for $56 mil + 5.5% of future revenue. So that $80 if we got the injunction t

  • what is this going to do for other VoIP providers? (Score:5, Insightful)

    by Lumpy (12016) on Friday October 26 2007, @08:51AM (#21127869) Homepage
    I chose Broadvoice over Vonnage because I wanted Open access. I.E. use my gear unlocked, use asterisk, etc...

    Will Other Voip companies be targeted after Vonnage is decimated by the telcos?

  • New commercial theme song (Score:1, Funny)

    by Anonymous Coward
    Boo-hoo, boo-hoo-hoo
    Boo-hoo, boo-hoo-hoo
    Boo-hoo, boo-hoo,
    Boo-hoo, boo-hoo-hoo.

    I put an extra line in here by the way so the filter wouldn't ding me for "too much repetition."

  • Note to self... (Score:3, Funny)

    by JK_the_Slacker (1175625) on Friday October 26 2007, @09:03AM (#21128001) Homepage
    ...Call lawyer. Have him sue Vonage for patent infringement.

  • You know? (Score:4, Interesting)

    by Penguinisto (415985) on Friday October 26 2007, @09:07AM (#21128037) Journal
    This is going to sound bad, but it's stories like this that make me feel not so bad when some tiny company (like, say, Eolas) comes along and hammers a big company.

    IMHO, software patents in and of themselves suck, but there's a bit of me hoping like Hell that Verizon, AT&T, and all their kith and kin get slammed (soon) with a multi-billion-dollar patent lawsuit from some tiny company no one has ever heard of. Something big enough to hurt.

    (or at least something big enough to get legislative attention and end this whole software patent silliness...)

    /P

  • an increase in their prices.

  • Tell me again (Score:3, Insightful)

    by zappepcs (820751) on Friday October 26 2007, @09:21AM (#21128203) Journal
    how software patents are supposed to protect innovation?
    Seems pretty clear that they are only being used to protect big businesses, or as weapons by patent trolls. When the patent system itself became a business (patent trolls) it should have been the wake up call to fix what is obviously broken.

    I know that companies are in business to make money, but this kind of heavy handed business practice is not necessary. This type of situation is an example of exactly why people would not be encouraged to start a business. You have to invest a lot of money/resources to ensure that you will not be sued into oblivion just to risk starting up a business. Software patents are WRONG, and the USPTO/patent system is BROKEN.

    Yes, we all know that, now what do we do about it?
  • Maybe AT&T/Sprint/Verizon should just buy Vonage. I mean Vonage has a presence in the market place, and they must have some of their own patents, right? This could be a way for one of them to take more of the VOIP market, which will continue to boom as networking infrastructure improves.
    • Maybe AT&T/Sprint/Verizon should just buy Vonage.

      They won't because they offer competing services at higher prices with fewer features. They want to sell the services they already offer at the price they decided. To do that they need to stop the company offering a better service for less.

      Traditional economics would dictate that they should lower their prices to increase demand in their service, but why do that when they can just use the patent system to harass Vonage until it goes out of business or has
    • As a happy Vonage customer, I would cancel my service if any of those companies bought them. If I wanted to have my phone service with one of the big abusive incumbents, I would already have service with them. It's not like I am unaware of their existence after all.
  • I know I'm supposed to support plucky little Vonage and hate the big telcos and really hate the idea of patents. It's a no-brainer how I'm supposed to feel here.

    But honestly? After years of those hoo hoo, hoo hoo hoo ads I'm pleased, nay, pumped, even amped, that those Vonage jerkoffs are getting nailed again. I don't even care why because the ads were so obnoxious. So suck on that, Vonage. And take your fucking ads with you, bitches.

    Oh yeah, and mod me down for this, for I have sinned.
  • How do multiple companies sue for pattent infringment on a pair of patents and not get sued themselves from the other companies or have prior art come into effect. Is there pattent licensing in effect here?
  • OK. I have a great internet connection. If you do not have a great internet connection, then you probably hate Vonage.

    All calls are crystal clear, they Email me my messages (as WAV file attachments), I can access my account on line, caller ID, etc. etc.

    Other pluses. If someone calls and doesn't leave a message, I call them back, I don't care if they live in Alaska, it doesn't cost me anything. Here is a big one, when calling, say, an Internet vendor about a problem, I never call the 800 number, I call d
  • Until I canceled my service with them. I was hassled by their offshored customer retention staff, offered months of free service, pleas for me to leave my account on inactive status, anything except cancel. And when I insisted, I then found out about the $39 disconnect fee -- what a crock.

    Fuck Vonage!
    • Woah, yeah. I can see why a $39 disconnection fee would make you change your allegiances from a competitive company to a bunch of dinosaurs that continue eternally to fuck up your country's telephony market for everyone but themselves.
  • So as far as I can tell we have (at least) 3 companies claiming to hold a patent on sending telephone calls over a network.

    Why are they all allowed to sue Vonage but aren't forced to settle the obvious patent disputes they have between them. Let's assume for a second that any one of them has a valid patent and had it first. Why aren't they suing the other 2 for getting settlement money out of Vonage that they as the rightful patent holder should have received?
    • So as far as I can tell we have (at least) 3 companies claiming to hold a patent on sending telephone calls over a network.

      Why are they all allowed to sue Vonage but aren't forced to settle the obvious patent disputes they have between them. Let's assume for a second that any one of them has a valid patent and had it first. Why aren't they suing the other 2 for getting settlement money out of Vonage that they as the rightful patent holder should have received?

      Most likely, the companies in question all have
    • Because they have patent cross-licensing deals where they agree not to sue each other in exchange for sharing their patent portfolios. All the big boys do that. What's more to the point, however, is that they all see VoIP providers as a direct threat to their own core businesses, and will do anything to squash that threat. If they're successful in forcing Vonage into bankruptcy, that will have a definite deterrent effect on future VoIP contenders.

      I currently have AT&T's CallVantage VoIP service. I'm
  • ... I started seeing all those commercials recently on TV again!
  • Let's say that you had a business of selling daisies. You are making a nice living working with flowers.

    For some reason, the city tells you that you have to sell daisies to other florists directly at a discounted bulk-quantity price. Which turns out to be just less than you were charging people. Overnight, a florist comes in with a lot of slick advertising and buys up half your daisies and suddenly you find your income cut by a lot more than the city promised you originally. And, you really miss the cus
    • Let's say that you had a business of selling daisies. You are making a nice living working with flowers.

      And let's say that you own every bit of arable land in the state, so that a competitor would have to buy up high rises and demolish them to get enough arable land to grow their own daisies.

      Idiot. This is nothing like growing daisies. The ILEC owns the only line into my building. A line which, by the way, should have been at least upgraded to fiber with the $200 billion [muniwireless.com] "infrastructure upgrade" wind

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