Vonage Loses VoIP Case With Verizon

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."

Re:Hmmm...

[ximenes]

Vonage has two plans, unlimited is $25 and 500 minutes is $14. The instant they introduced the 500 minute plan I switched down to it. This includes all of the services (voicemail in particular) that you pay through the nose for with a real phone company.

I cannot even conceive of using 500 minutes in a single month.

Re:What patents ?

[1310nm]

"The infringed patents cover a method for translating calls between an Internet network and the standard telephone network, call-waiting features and wireless fidelity, or Wi-Fi, handsets. Vonage was cleared of infringing two patents related to billing systems designed to prevent fraud."

http://www.bloomberg.com/apps/news?pid=20601087&si d=anDrCRkj4nn0&refer=home [bloomberg.com]

Alternative

[nbucking]

Why is Vonage taking the flame for VOIP? Isn't there other buisnesses out there that allow people to use the public phone lines for comunication from computer to phone. I use skype which does not have a monthly payment(12 months for $24 for an phone number and voicemail)and 2 cents a minute for calls made in the US. Also, I do enjoy the video phone functionality of it.

Google patent search is your friend

[Ungrounded Lightning]

Maybe some of these [google.com]?

Re:Hmmm...

[pdhenry]

1) incoming calls don't come out the the 500 bucket.
2) calls to toll free numbers don't come out of the 500 bucket.
3) calls to Vonage customers don't come out of the 500 bucket.

It's harder to burn through 500 Vonage minutes than one would think.

Holy...crap...

[1310nm]

Look at these patents:

http://patft.uspto.gov/netacgi/nph-Parser?u=%2Fnet ahtml%2Fsrchnum.htm&Sect1=PTO1&Sect2=HITOFF&p=1&r= 1&l=50&f=G&d=PALL&s1=6137869.PN.&OS=PN/6137869&RS= PN/6137869 [uspto.gov]

So basically any VOIP system utilizing a database to authenticate callers and bill them for usage is infringement. Amazing.

http://patft.uspto.gov/netacgi/nph-Parser?u=%2Fnet ahtml%2Fsrchnum.htm&Sect1=PTO1&Sect2=HITOFF&p=1&r= 1&l=50&f=G&d=PALL&s1=6104711.PN.&OS=PN/6104711&RS= PN/6104711 [uspto.gov]

VOIP DNS.

http://patft.uspto.gov/netacgi/nph-Parser?u=%2Fnet ahtml%2Fsrchnum.htm&Sect1=PTO1&Sect2=HITOFF&p=1&r= 1&l=50&f=G&d=PALL&s1=6282574.PN.&OS=PN/6282574&RS= PN/6282574 [uspto.gov]

Same.

http://patft.uspto.gov/netacgi/nph-Parser?u=%2Fnet ahtml%2Fsrchnum.htm&Sect1=PTO1&Sect2=HITOFF&p=1&r= 1&l=50&f=G&d=PALL&s1=6298062.PN.&OS=PN/6298062&RS= PN/6298062 [uspto.gov]

Voice mail / call waiting / call forwarding I assume. Now this is proprietary because it's been ported to VOIP systems?

http://patft.uspto.gov/netacgi/nph-Parser?u=%2Fnet ahtml%2Fsrchnum.htm&Sect1=PTO1&Sect2=HITOFF&p=1&r= 1&l=50&f=G&d=PALL&s1=6359880.PN.&OS=PN/6359880&RS= PN/6359880 [uspto.gov]

This looks more applicable to wireless networks; I wonder how it applied in this case.

what PDF's?

[Anonymous Coward]

Top of the page [zdnet.com]. It's a small PDF, and the patents are near the back. I'll leave it up to the rest of you to find and read (and understand) the patents yourself.

Re:Hmmm...

[NormalVisual]

I'm paying a comparable amount through Vitelity [vitelity.net] and I've been quite happy with the service. $1.49/mo. for each DID, 1.39 cents/min/channel outbound, and 1.1 cents/min/channel inbound. It's very much an ala carte service - you can order as many DIDs as you want for a single account, and if you want CNAM lookups (caller ID), you pay for them on a per-use basis (something like 2 cents/lookup IIRC). Most importantly for me, they actively support and welcome customers running their own PBX boxes (Asterisk , etc.) and they will let you have as many simultaneously active calls as your bandwidth will support.

I've had no problems with the service, and they were very helpful in porting my previous Vonage number over. They do offer a few other plans, but the ala carte offering worked best for me.

Prior Art: Free World Dialup, MSN Messenger?

[Cocoshimmy]

The patents in question seem to have claim to have invented VOIP in 1999. However, the free world dialup project has been around since 1995 [freeworlddialup.com]. Also, back in 1998-1999 I remember Microsoft was offering free PC-Phone calls to the US using MSN Messenger. Their partner was charging for the same service. I think that would certainly qualify as prior art.

Re:Maybe a little dose of reality

[Anonymous Coward]

You are a poor uninformed soul just like those who think "Google isn't paying for anything". Of course they pay. The pay for the internet access to transfer their data, your VoIP data has to be carried to some system of theirs and then converted to a standard POTS signal (of course they somehow have to have a way of doing all that and I'm sure Verizon isn't going "HEY... We can give you local numbers for free!".

Everyone pays for everything, there is no free. When will you people quit saying that "it's free"?!

Re:Maybe a little dose of reality

[Anonymous Coward]

Vonage's businss model depends on Verizon, SBC and the other existing phone companies. It depends on utilization of their facilities without paying anything for the use.

I'm sure Vonage has bandwidth bills to pay. Every VOIP installation is sitting on some ISPs line (like Verizion, SBC and other existing phone companies) which said ISP is getting paid money for.

This is not very far from the net net neutrality debate. I pay Verizon cash money for a rated connection to the internet. Should they be allowed to tell me what kind of packets i can put on the line?

Re:Prior Art: Free World Dialup, MSN Messenger?

[Cocoshimmy]

I don't know why my parent post got modded as a troll as they are all valid points. Perhaps I did not cite my references.

As someone mentioned earlier, here are the patent numbers: 6137869 [billing algorithm for voip], 6104711 [dns for voip],6282574 [dns for voip], 6298062 [conversion of PSTN signals to IP packets and providing PSTN services over IP networks], 6359880 [Wireless VOIP router]. I am not going to link these to the patent office because it's tedious, but you can look them up for yourself.

Net2Phone, launched their VOIP services back in 1997 [net2phone.com]. In order to establish said services they implemented most if not all of the above claimed patents and did so before most of the patent applications were filed. The only two which were filed before the service was launched were the first two patents in the above list and they are certainly not unique and unobvious. Billing for VOIP services? Pretty obvious since they announced their pay service in 1995 which was 2 years prior to the patent application. The second one was simply DNS extended to provide things like caller ID. Not exactly ground breaking but this is perhaps the only leverage they may have IF nobody else was providing VOIP services at the time or prior to. That is a big IF because it is likely many of the telcos were already using something similar for digital cell phone networks such as GSM (which is also a packet network created around 1993).

Of course there is also the Network Voice Protocol [wikipedia.org] which was the first implementation of VOIP invented in 1973 which preceded all the patents. My point is, they really don't have much of a case with these patents.

Re:Hmmm...

[JPriest]

I am in the same boat you are, we go over our 500 minutes every few months, but I have not upgraded the plan becasue it is never costs much more than a few dollars. Anything up to 255 minutes over (755 total) is still cheaper on the $15 plan.

When I first signed up for Vonage I bought a $200 multi-cordless phone system (Current model is Uniden TRU9485-3) that is pretty nice, but at the same time I have saved about $1,400 since moving to Vonage.