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The End for Vonage? 296

Posted by Zonk
from the ohhh-they-can't-take-it-there dept.
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.'"
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The End for Vonage?

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  • Yay! (Score:5, Insightful)

    by Mateo_LeFou (859634) on Friday April 06, 2007 @01:10PM (#18636131) Homepage
    Our "intellectual property" system at work for you, ensuring innovation and -- as a nice side effect -- severely restricting competition in the marketplace. Hip Hip Hooray
    • Re:Yay! (Score:4, Funny)

      by plasmacutter (901737) on Friday April 06, 2007 @01:14PM (#18636191)
      youre not doing it right....

      insuring innovation by.. providing innovative new ways for incumbents to crush advances which threaten their bottom line.
    • Re:Yay! (Score:4, Insightful)

      by norminator (784674) on Friday April 06, 2007 @01:17PM (#18636229)
      Damn.

      I've been enjoying cheap phone service for 18 months now, and hoped it would last a lot longer. If Vonage goes under, and the other VoIP companies face the same patent issues, I may end up having to sign up for Comcast's crappy phone/cable/internet package... increasing my total bill for those services by $10 now, and by another $30 after a year.

      I absolutely refuse to go back to Qwest with their horribly incompetent customer service people (apologies if any of you work there), surprise bonus charges and fees, and the constant attempts to sell you new features you don't need. Thanks a lot Verizon, you really know how to ruin a good thing (and I'm not even in your service area!).
    • Re: (Score:3, Insightful)

      by Drakin020 (980931)
      You know why this didn't happen with the blackberry though....All the govt officials and there crackberry phones wouldn't let this happen. But a smaller more useless company like Vonage...Oh yeah throw the book at em!
    • by Anonymous Coward on Friday April 06, 2007 @01:45PM (#18636665)
      (to the tune of, woo woo, wo woo woo, from the vonage commercial)

      woo woo, we got sued!!!

      woo woo, we got sued!!!

      woo woo, we got sued!!!

      woo woo, woo woo,

      woo woo, we got sued!!!

      Bye Bye!
    • Re:Yay! (Score:5, Funny)

      by bmac83 (869058) on Friday April 06, 2007 @02:27PM (#18637305) Homepage
      Hip Hip Hooray? I think you mean...

      Hoo hoo, hoo hoo hoo.
      Hoo hoo, hoo hoo hoo.
      Hoo hoo, hoo hoo.
      Woo hoo, Woo hoo hoo.
  • The stage is set (Score:5, Insightful)

    by realmolo (574068) on Friday April 06, 2007 @01:12PM (#18636163)
    Now that Verizon has more-or-less successfully defended their BROAD patents on VoIP stuff, I wonder how long it will be before AT&T/Cingular starts suing ALL of the other phone companies for violating THEIR patents.

    I imagine that AT&T owns MANY of the patents on much of the phone technology currently in use. Or at least, owns patents that are "close enough" to successfully sue everybody for infringement.

    It's all so crazy. The telecom industry in the US is fucked.
    • by Mateo_LeFou (859634) on Friday April 06, 2007 @01:14PM (#18636197) Homepage
      "I wonder how long it will be before AT&T/Cingular starts suing ALL of the other phone companies for violating THEIR patents."

      Shouldn't be long: only have to wait until this approach is more profitable than providing phone service.

      "Renting switching equipment is not a good business model when switching equipment is ubiquitous". -- Eben Moglen
    • Now that Verizon has more-or-less successfully defended their BROAD patents on VoIP stuff, I wonder how long it will be before AT&T/Cingular starts suing ALL of the other phone companies for violating THEIR patents.

      Its hardly as if AT&T wasn't already enforcing its patents.

      I imagine that AT&T owns MANY of the patents on much of the phone technology currently in use.

      Possibly, though patents don't live forever (or effectively so) the way modern copyrights do, so lots of the patents that they may

      • Re: (Score:3, Insightful)

        by nightsweat (604367)
        Remember, AT&T isn't AT&T of old. I don't know for certain, but I'd guess a lot of the old AT&T intellectual property is shared by the RBOC descendents like USWest er, Qwest, PacBell -er AT&T, Nynex -er Verizon, Bell Atlantic -er Verizon, Bell South -er AT&T, Ameritech -er AT&T, and Southwestern Bell -er AT&T.

        Hmm. Maybe they ARE the AT&T of old.
    • by Z00L00K (682162)
      Only in the US? I think that that's the fact for the rest of the world too... Telecom companies that doesn't extend broadband to all locations, telecom companies that doesn't permit voice over broadband even though they are providing the broadband, telecom companies that charge extreme fees for roaming mobile phones when in another country (both data and voice).

      The list can be made longer... Think you get the idea... Only truth here is "money talks"...

  • pwnage (Score:4, Funny)

    by Anonymous Coward on Friday April 06, 2007 @01:13PM (#18636185)
    PWNAGE
  • by Anonymous Coward on Friday April 06, 2007 @01:14PM (#18636195)
    Whooo-hooo, wooo hoo-hoo!
    Whooo-hooo, wooo hoo-hoo!
    Whoo-hoo-hoo, oooh-oooh...oops.

    • At least I won't be subject to that nauseous infomercial anymore. I will miss the frizzy hair spokesbabe though.

       
  • by Coldmoon (1010039) <{moc.oohay} {ta} {nedewswm}> on Friday April 06, 2007 @01:14PM (#18636205)
    Well at least I can watch TV this weekend without having to watch any more of those annoying Vonage commercials...
    • by hamburger lady (218108) on Friday April 06, 2007 @01:21PM (#18636297)
      dunno, if it's verizon vs vonage, verizon wins the 'annoying commercials' competition.

      "have you heard the new fall out boy single? it. gets. me. pumped!"

      y'know what gets me 'pumped'? the thought of stabbing that man repeatedly and flaying the corpse.
    • I wonder how far in advance they buy their ad spots . . . they might still run for some time yet. That's a lot of money getting flushed down the toilet.
    • by Homr Zodyssey (905161) on Friday April 06, 2007 @01:58PM (#18636847) Journal

      Hmm...commercials...

      Oh yeah! I saw those last time I visited my parents. I kept trying to fast-forward through them, but it wouldn't work. They said it was because they didn't have TiVO -- but that just didn't make sense to me.

      Apparantly there are actually people out there who watch TV shows when the network execs tell them to. They have to put up with these "commercial" things, and the show doesn't pause when they get up to go tot he restroom.

      I don't want to live in that kind of world.

      • by hurfy (735314)
        "I kept trying to fast-forward through them, but it wouldn't work.... and the show doesn't pause when they get up to go to the restroom."

        lol, you are not using the new tech right. It automaticly pauses so you CAN get up and go to the bathroom. Network execs just have really really small bladders and assume everyone else does too....

        Can we throw Vonage boxes at the pumped verizon dude? Of course that would probably be the lead-in to a Head-on commercial :(
  • by dada21 (163177) * <adam.dada@gmail.com> on Friday April 06, 2007 @01:15PM (#18636213) Homepage Journal
    Patent infringement is NEARLY always about one big guy versus another big guy -- or a big guy versus a little guy. How often do patents actually help individuals rather than mega-conglomerates? Even if you have a small business with various patents, can you afford to protect them in court?

    Vonage lived by the sword -- they themeselves believed in patents. While I feel this judgment is counter-market, it doesn't cause as much damage as patents do in general. The idea that someone can monopolize the thoughts, motions or creations of another individual is ridiculous, especially in the multitude of patents we all know are ridiculous.

    So be it. Whenever anyone who uses patents loses a patent war, they get what they deserve. I feel no pain for Vonage, nor anyone who decides to base their businesses on forcing other businesses not to compete in a certain way.

    Rest in pieces, Vonage. Maybe Verizon will be next.
    • What? (Score:4, Interesting)

      by ivan256 (17499) on Friday April 06, 2007 @01:18PM (#18636263)
      So you think this wouldn't have happened if Vonage hadn't pursued patents?

      Let me add a dose of reality to your delusion. They simply would have been sued out of business sooner.
      • Re: (Score:3, Insightful)

        by maxume (22995)
        I think his point was that they don't have any basis to whine about it since they likely would have done the same thing were they in a position to do so.
        • by ivan256 (17499)
          Why do you think their patents weren't defensive? Which VoIP competitors has Vonage sued out of business over a patent dispute?
      • by homer_s (799572)
        So you think this wouldn't have happened if Vonage hadn't pursued patents?

        It was clear to me what the parent meant - that he does not feel sorry for Vonage because they themselves believed in patents.

        Don't know which post you read and how you came to that conclusion.
        • Re:What? (Score:4, Interesting)

          by ivan256 (17499) on Friday April 06, 2007 @01:41PM (#18636591)
          Say you walk into a room. There's a sword leaning against the wall next to the threshold and a fully armored knight charging you with his sword held high. Do you pick up the sword and parry, or do you simply make peace with your last few seconds of life?

          It is clear to me that the parent considers defensive patents the same as using patents in a predatory manner. He's wrong.
          • Re:What? (Score:5, Funny)

            by RxScram (948658) on Friday April 06, 2007 @02:10PM (#18637051)
            I quickly cast Mage Armor, do a tumble check to get out of the room without being skewered, then unleash a lightning bolt on his armor wearing ass!
          • Re:What? (Score:5, Insightful)

            by Jah-Wren Ryel (80510) on Friday April 06, 2007 @02:23PM (#18637251)

            Say you walk into a room. There's a sword leaning against the wall next to the threshold and a fully armored knight charging you with his sword held high. Do you pick up the sword and parry, or do you simply make peace with your last few seconds of life?
            Your analogy is much more apt than you apparently realize.

            You can not hope to prevail against that armored knight. If he lands one blow, you are effectively dead. If you land 100 blows, maybe he gets a few bruises. If you fight you are guaranteed to die, it is just a matter of how many minutes it will take.

            If you negotiate, you might convince the guy to stop, you probably won't but you've got a much better chance of coming out alive than if you take the inevitable path to death of engaging in a totally mismatched fight.

            Of course there is a third option - get the hell out of the room. Same thing with patents, if there were no patents to fight with, then they wouldn't be able to kill you with them.
          • Re: (Score:3, Funny)

            by Robot Randy (982296)
            PC: I open the door.

            DM: You see a fully armored knight charging you with his sword held high.

            PC: I close the door.
    • Re: (Score:3, Insightful)

      by Gordo_1 (256312)

      Vonage lived by the sword -- they themeselves believed in patents.
      Whenever anyone who uses patents loses a patent war, they get what they deserve.
      While you were away living in your patentless fantasy world, real-world business owners who played by the rules, filed patents -- because they had no other choice!

      Don't hate the player, hate the game.
      • Don't hate the player, hate the game.
        This has got to be one of the most insidious catch phrases of the last 20 years.

        If the players were not happy with the game, they would work to change it. The players are responsible for the game they play. What do you think would happen if Verizon and friends started putting their muscle behind patent reform?
        • by Gordo_1 (256312)
          The parent was implying that Vonage had some sort of legitimate voice in reforming the patent system. Ha!

          If IBM, Microsoft, Intel, Ford, GM, ExxonMobil, Chevron, GE and AT&T all got together and lobbied the government to reform the patent system, maybe something could be done. Good luck putting that dream team together.
    • by Hoplite3 (671379) on Friday April 06, 2007 @01:33PM (#18636479)
      I said much the same yesterday about patents.

      Patents are a government granted monopoly (on an idea, in this case) to encourage a certain behavior (inventing). This sort of monopoly has lots of hidden costs for the economy and an unknown benefit for the patent holder. Why not keep everything clear and open? Don't allow the patent. If they idea is really great, it should be easy for the company that that discovered it to dominate the market in the future. Their competitors should take some time to get "me too" products to market, and that time can get them some real dough. If the idea isn't that innovative, it'll be copied easily and won't mean much. This system -- the one without patents -- still rewards people with good ideas.

      This is the Adam Smith warning all over again. Government granted monopolies seem like cheap ways of subsidizing desired activities (research, in this case), but they end up costing a fortune. It's like funding things on bond issuance. The government regularly gives money to the NSF and the NIH because science has a solid track record of providing big returns on the investment, but using patents to cover research is obviously bad, since we're taking a loan instead of buying an investment. Business patents involve the government taking a loan to subsidize business, but without any public discussion about the possible benefits of taking that loan.

      Locking up ideas in patetents is, to me, morally reprehensible too. It inhibits the free flow of ideas by regulating techniques, knowledge, and even the conclusions one can draw from data. I believe that the cost to society of the patent is too high. People invented things before they were granted monopolies, and they will continue to do so after those monopolies are removed. As the pace of innovation accelerates, more people encounter roadblocks caused by this unwise funding. And its exactly that they are paying for the discoveries of a past era through royalties now.

      Intellectual property of all sorts is absurd. The idea could sink our culture.
      • by mungtor (306258) on Friday April 06, 2007 @01:56PM (#18636805)

        If the idea isn't that innovative, it'll be copied easily and won't mean much. This system -- the one without patents -- still rewards people with good ideas.

        You're making the false assumption that innovative == technically difficult. Often it isn't, it's simply a matter of thinking outside the box.

        How technically difficult is it to produce the opener on the top of a modern soda can, especially once you've seen one? Not very. However, as a solution to the problems of pull-tab cans it was a pretty damn clever innovation. There are thousands of examples where people say "I could have thought of that". Well maybe, but they didn't and there is no reason to penalize the people who did since the non-inventors see the system as "unfair".

        The place where the current patent system fails is in the area of process patents. A method of interconnecting any two existing things should not be patentable unless truly new technology was invented to accomplish the purpose. The same with tacking "on the internet" to any existing process (eg One-Click). However, an infinitely variable valve timing assembly for automotive use... at least a "maybe".

        • How technically difficult is it to produce the opener on the top of a modern soda can, especially once you've seen one? Not very.

          I beg to differ:

          While the first aluminum cans were noticeably easier to open than steel ones, a separate opener was still required. This was an inconvenience, especially when there was plenty of beer but no church key at the family picnic. It was in such a situation that Ermal Fraze of Dayton, Ohio, found himself in 1959, when he resorted to using a car bumper to open a can. Th

          • by mungtor (306258)

            I beg to differ:

            Seriously... what? I may just be dense but I'm not sure how any of that relates to the concept of a patent protecting an orginal idea, or how pop-top design was hampered by patents.

            While there was some interesting innovation in the evolution of pop-tops, buying and copying the design of one is not difficult. Having the inspiration to permanently attach the "opener" to the can so that there was no litter was the non-obvious solution to a problem. Coming up with a working design shoul

      • by BLKMGK (34057) <(morejunk4me) (at) (hotmail.com)> on Friday April 06, 2007 @02:10PM (#18637053) Homepage Journal
        So, let's play this game - we'll even name it something like China. You the player spend oh 5 years researching and creatnig some neato' keen scientificly designed product but you don't Patent it because well you just don't roll that way. So you bring this thing to market and it's really kewl but it's kind of expensive because afterall you have all those years of R&D to pay for and a family to feed. 2 months after having released your neato' keen device to market sales sharply drop. Gee, why is that? Oh wait, someone else is playing the game too. Only they are playing it a little different. Seems they were one of your very first customers only instead of using your product they took it apart, duplicated the pieces, and are now making them too - for 1/4 your asking price. They paid nothing for R&D other than the time spent reversing your product and because they have no R&D tail to pay for they aren't deep in the red like you were when you started. No patent so you have no way to fight them - now what? Two months is actually not a crazy estimate either BTW, hell these days you're likely to hand them the plans to manufacture your precious widget anyway. 5mins after the plans hit their desk they are being duped. Worse they might even run the production line double time - you get the products built during the day, they sell the products they built at night. Whoops, how do you fix that exactly? Think this through....

        The patent system right now SUX, I'll grant that. However it doesn't suck because the idea is completely bad it sucks because the patent office grants overly broad patents and because we have a judicial branch running amuck making decisions on technology they barely understand. Dumping the patent system while nice in fantasy land isn't going to necessarily mean that it will make things better. China, and other countries, are copying products with little to no R&D like mad and undercutting the real companies making these products. The result is that some of the companies are losing their ass due to R&D costs - what you propose, nuking the patent system, would allow this with no penalty. You sure that's what you want?

        Oh and yes people invented things before patents. Then they VERY closely held onto that information for fear that others would benefit from it if it was shared with anyone other than maybe an apprentice. They didn't simply tell every Tom, Dick, and Harry, who wandered by how to do the thing that allowed them to make a living I promise you. There also wasn't this huge global information system that would allow the information to spread like wildfire.
      • by cdrguru (88047)
        You would like to believe "it should be easy for the company that that discovered it to dominate the market in the future." It isn't today.

        The problem is that it is cheaper to take someone else's design, run over to China or Taiwan and have the device built. Meanwhile, the original developer is too small to order in lots of 100,000 units and WalMart is dictating how to run their business. New company steps in, already in distribution and says "why not buy from us" and the developer is shut out completely
    • by mungtor (306258)

      Patent infringement is NEARLY always about one big guy versus another big guy -- or a big guy versus a little guy. How often do patents actually help individuals rather than mega-conglomerates? Even if you have a small business with various patents, can you afford to protect them in court?

      At least patents give the little guy a chance. Without patents you create a product and then one of the mega-corps buys one, pulls it apart, and starts selling it for 50% of your price because they have the leverage to

      • Re: (Score:3, Insightful)

        by Wansu (846)

          At least patents give the little guy a chance.

        Not much of one. It's expensive to enforce patents. The little guy will find himself out-lawyered when he takes on a mega-corp for infringement and he will not have as big a war chest as the mega-corp. So the mega-corp can outrun him and outgun him in court.

        • Re: (Score:3, Insightful)

          by mungtor (306258)
          That's why I prefaced it with the "if it's an obvious infringement".

          And in reality, that is a failing of the legal system not the patent system. You right about the overall effect (little guy == screwed) but the patent system isn't the one doing the harm.
    • Re: (Score:3, Interesting)

      by werfele (611119)

      Vonage lived by the sword -- they themselves believed in patents.
      I don't know about Vonage specifically, but it's unwarranted to assume that because they applied for patents that they believed in patents. Those patents might have been intended as (apparently inadequate) defensive patents [wikipedia.org].
    • by bitt3n (941736)

      The idea that someone can monopolize the thoughts, motions or creations of another individual is ridiculous

      you're certainly not the only one on slashdot that thinks this, but I don't see the logic. If I am a drug company, for example, and I spend hundreds of millions of dollars developing some new drug, I need a patent to maintain the exclusivity necessary to recover the development costs. If I do not get a patent, the drug goes generic, everyone else produces it without having to pay any development, and

  • Thanks, Verizon... (Score:5, Insightful)

    by keithmo (453716) on Friday April 06, 2007 @01:19PM (#18636269) Homepage
    ...you just made my choice a little easier. I'm a happy Vonage customer, and I'm also in the market for a new cellular provider. I can now scratch Verizon off the short list.
    • Not if you want coverage outside of large cities (50k+) you can't. I live in a town of about 1000 people. Verizon is the only cell provider that gets coverage here. My parents live a town of 25k. Verizon is the only one who covers the whole town.

      It amazes me that multiple providers can provide service to small towns in India, but not in the US.
      • by PCM2 (4486)

        It amazes me that multiple providers can provide service to small towns in India, but not in the US.

        Well, obviously population density is greater in India. What's more, there's probably less regulation and more corruption among low-level government officials. Useful for businesses, perhaps, but not necessarily desirable when it comes to improving quality of life for the average citizen (see India).

  • I think this is excellent. Now any company can be prohibited from taking on new customers including Verizon. This is one of the best penalties I've ever seen. It is fair to existing customers. A true Teddy Roosevelt move http://en.wikipedia.org/wiki/Theodore_Roosevelt#L e gacy [wikipedia.org].
    --
    Get solar with technology with expired patents http://mdsolar.blogspot.com/2007/01/slashdot-users -selling-solar.html [blogspot.com]
    • From the article at cnn.com [cnn.com]:

      The judge gave Vonage two weeks to try to convince him to stay the injunction. Verizon (Charts) then suggested the judge allow Vonage to keep servicing its existing customers if a stay was necessary.

      Verizon gets 5.5% royalties off of Vonage's sales, so it's probably just as well for them to keep squeezing some money out of them... it's the best of both worlds for Verizon... no new customers can sign up with Vonage, existing customers will leave Vonage, out of fear of it fa
      • by mdsolar (1045926)
        You may be right. On the other hand, if they are no longer infringing, they're back in business, or they sell their business and the injunction is moot. What I liked was the way the injunction takes account of the customer's interest. I have not heard of this method before and I think I like it. I think this is a good answer to the "too big to fail" problem where corporate malfeasance is essentially winked at because they are too important to the functioning of the economy. Maybe problems with this apr
  • Hmm.. I wonder if this means the return of the secret $5 unlimited inbound plan if you call to cancel. Perhaps I'll just use Vonage for inbound, and someone else for outbound, instead of just porting my number to someone else. Definitely the right time to learn how to unlock my adapters, though. Feel kind of bad for Vonage, though. I wonder who Verizon will sue next?
    • Re:Secret $5 plan? (Score:4, Interesting)

      by TheMCP (121589) on Friday April 06, 2007 @02:48PM (#18637659) Homepage
      If you get Gizmo Project [gizmoproject.com] and Grand Central [grandcentral.com], and configure the latter to use the former, you can get unlimited inbound calls for free.

      I've been very happy with my Vonage service, and I hope they'll win this one in court eventually. If they don't, I'll reconfigure my Vonage hardware to use another SIP provider (like Gizmo Project): I'll switch back to TPC when heck freezes over.
  • Cisco ? (Score:3, Insightful)

    by terrymr (316118) <terrymr&gmail,com> on Friday April 06, 2007 @01:28PM (#18636413)
    So where does this leave you if you're handing off your calls over a PRI using a Cisco router (with h323/MGCP) >
  • Some thoughts (Score:3, Interesting)

    by Anonymous Coward on Friday April 06, 2007 @01:30PM (#18636433)
    Keep in mind that the Markman hearing (to decide what the claim actually covers) adoption of verizon's construction of all the claims means that all of the patents read so broad that things like BIND and SIP infringe -- Add to that court irregularities: no patent case expertise and instead of days, there was only a 30 minute per side argument per side for 48 claims over 7 patents -- and there's a pretty strong case for appeal.

    IANAL.
  • by mulvane (692631) on Friday April 06, 2007 @01:31PM (#18636461)
    More than a few years ago, the big AT&T was forced to split up to remove a monopoly they had. Well, lets see, now SBC, Bellsouth, Cingular, DishNetwork and probably more I don't know of all fly under that AT&T banner. All reports of Qwest suck, and I have my own hatred for Vonage but it was a choice some found to be good. Where is all my choice going and why isn't someone in the government stopping this? The telecoms are raping the people AGAIN, and although not a monopoly yet, its getting to the point of being one if not something worse. Now that VoIP is being challenged, that could effectively eliminate even more plays like Charter and Comcast.
    • More than a few years ago, the big AT&T was forced to split up to remove a monopoly they had. Well, lets see, now SBC, Bellsouth, Cingular, DishNetwork and probably more I don't know of all fly under that AT&T banner.

      correction: the the AT&T corporation was declared a monopoly and broken up. the new AT&T Inc. monoply is different. it has "Inc." in the name.

      corporations are monopolistic, greedy, and unamerican. Inc.'s are cool. google is an Inc. so is apple. you kids love the googles, right?

      clearly, you have nothing to fear from the ne AT&T Inc.

    • DishNetwork merely has a sales and marketing agreement with AT&T. They aren't owned by them, at least not in a substantial way.
    • by cdrguru (88047)
      Charter and Comcast have nothing to fear - they are building a parallel network. Their customers are connected through their wires and not piggybacking on Verizon (and other) lines to sell their product.

      This doesn't piss off the telecom companies anywhere near as much as using their own DSL lines to compete with them.

      The only thing that is going to happen with the cable companies is they are going to find themselves in the tariffed telephone business as real providers. With the full load of Utility Boards
  • by Otter (3800) on Friday April 06, 2007 @01:32PM (#18636473) Journal
    Remember when you idiots were convinced that Blackberries were going to disappear?

    Some money will get passed around and this will get settled. Corporations don't just fold up shop so a bunch of Perl chimps can feel more righteous about their silly notions of "innovation".

    • by faedle (114018) on Friday April 06, 2007 @01:57PM (#18636819) Homepage Journal
      RIM was sideswiped by (arguably) a patent troll who had no tangible product, no customers, and nobody had ever heard of.

      This is a lawsuit brought by a well-funded telephone company (the largest LEC in the United States, and one of the largest telecom companies on the planet). Wall Street will respond negatively to this news once it starts circulating.

      The news is just now hitting the wire, and Vonage stock has already taken a 10% beating. Once the announcements are made by Vonage and Verizon later this afternoon, expect the stock to be in penny-stock territory range on Monday once trading ends.

      That does not bode well for Vonage as a company.

      Verizon fully intends, through the courts, to shut Vonage down. It appears, effectively, they have.

      Next week's news story: Verizon acquires a majority stake in Vonage as a "settlement" to the lawsuit, and begins "transitioning Vonage customers to Verizon's VoIP offering". Six months down the road, Vonage will quietly cease operations, after Verizon uses the leverage of their stock position to shutter the company after all customers have been moved off Vonage's revenue column.
      • by Todd Knarr (15451)

        The only glitch in that plan: how many Vonage customers are going to voluntarily move to the very company that just screwed over their chosen phone setup? Were I a Vonage customer, "Verizon" would be a 4-letter word to me right about now.

  • by R2.0 (532027) on Friday April 06, 2007 @01:42PM (#18636613)
    I think that Verizon is going to become a lot more interested in negociating with Vonage after this ruling. Why? Because if Vonage goes bankrupt, Verizon is likely to get squat in bankruptcy court. They don't have a lot of physical assets. They have a customer base - a loyal one. How many Vonage customers, having already switched from an RBOC, are going to switch BACK voluntarily?

    Verizon viewed this as a way to get a piece of a growing market without having to invest anything. tey were going to use the patent to force Vonage to charge a "Verizon Tax" on their customers, which would make the service less attractive to users and maybe send somefolks back to the RBOC's - not to mention the fat licensing fees. But the judge may have killed the goose that lays the golden eggs.
  • "It's the difference of cutting off oxygen as opposed to the bullet in the head," Vonage lawyer Roger Warin

    cutting off the oxygen supply has long been a term used by management to describe a method of dealing with competition.

    gun to the head references are more often used by unions (buzz hargrove comes to mind)
  • Very worrysome (Score:2, Insightful)

    by alegrepublic (83799)
    This could be not only the end of Vonage, but also the end of Asterisk, Skype and VoIP in general. I am not a Vonage customer and do not plan to be, as I prefer using Asterisk and small termination providers, which is much cheaper than Vonage. However, I think anyone interested in the success of VoIP should help Vonage win this fight, either by contributing money to their defense or protesting the decision to the Government. Letting Verizon get away with it would set us back 20 years or so until the patents
    • it's just a matter of who gets into the playground.

      if you go along to get along, crosslicensing your patents, you're able to fight with the ciscos and Avayas and the bellcos.

      otherwise, don't figure you're going to bring a shiny new knife to the gunfight and win.
  • really? (Score:2, Interesting)

    by warrior_s (881715)
    FTA: "The judge has basically stopped Vonage from accepting new customers."

    But I can still go to their website and sign-up [vonage.com]
  • I think pretty much everyone on Slashdot agrees that software patents are a bad idea. However, isn't part of this about technology/concept patents that aren't software related? Another article mentions patents "that describe technology for completing phone calls between VoIP users and people using phones on the traditional public switched network, authenticating VoIP callers, validating VoIP callers' accounts, fraud protection, providing enhanced features, using Wi-Fi handsets with VoIP services and monit
  • If Vonage customers think that Verizon is going to simply send you a card to become a Verizon customer you are wrong. Verizon doesn't want those Vonage customers, they want their own. And even if they did they wouldn't make it any easier to switch than any other shmoe off the street. THAT's the point of oligopoly. IF Vonage dies than most of those customers will switch to old style copper wire phone. Phone companies don't care who DOESN'T have service, they only care about the service people have from other
  • by cdrguru (88047) on Friday April 06, 2007 @02:07PM (#18636989) Homepage
    Let's see, Vonage builds ... nothing and sells little boxes to people to connect to their Internet connection. This then connects to a couple of termination sites that either connect to other Vonage customers (maybe) or just dumps the call out on the standard telephone network.

    Yes, individual calls out cost them something, but that infrastructure is built and maintained by the other companies. Generally, by the people too dumb to have switched away to Vonage and their VOIP ilk.

    The problem is that Vonage is 100% dependent on the telephone network they are competing with. They are selling a service which requires their competitor to operate. This is generally a bad business model, except it can generate extremely high profits for a short period of time. Vonage can't put Verizon out of business as it would eliminate their ability to operate.

    Of course having a leech syphoning off the high-value residential customers does nothing but piss Verizon, AT&T and others off. This has been coming for a long time and it isn't over yet. I would guess some telecom company finds some way to put every one of the leeching VOIP services like Vonage and Lingo out of business soon.
    • by TheMCP (121589)
      That's nonsense. Vonage customers are still paying for the use of a "traditional" network, in the context of their Internet service. If I use Vonage for my phone, Verizon can still get my money to use their network service.
    • Re: (Score:3, Insightful)

      by Paulrothrock (685079)

      If I connect Vonage to my cable broadband and call someone else who connects their Vonage box to their cable broadband, where is the phone company involved?

      Seems to me that if Verizon has to charge twice as much as Vonage for half the features, the problem is with Verizon, not Vonage.

    • Leeches (Score:3, Insightful)

      by Erris (531066)

      Of course having a leech syphoning off the high-value residential customers does nothing but piss Verizon, AT&T and others off.

      That's funny, as a "high-value residentail customer" I think of Verizon, AT&T and others as government dependent leeches. I'd love to see some real competition in infrastructure and I'm tired of government being the barrier to that. US infrastructure is no longer the world's best, despite great spending by people such as myself.

      This will continue into the future as l

    • You are smoking crack.

      They've demonstrated that you can do telephony over cheap packet switched networks like the internet for a tiny fraction of the costs of the incumbent telecoms. Not that that was a shocker. Those stupendously greedy assholes at the old school telecom companies have been price gouging so bad they've even intermittently attracted federal regulation. And we know how hard that is to do.

      Voip providers don't need the telecoms. As old-line telecom customers switch to Voip, then usage of brid
    • Re: (Score:3, Insightful)

      by SeaFox (739806)

      The problem is that Vonage is 100% dependent on the telephone network they are competing with. They are selling a service which requires their competitor to operate. This is generally a bad business model, except it can generate extremely high profits for a short period of time. Vonage can't put Verizon out of business as it would eliminate their ability to operate.

      That doesn't make any sense. If Verizon went out of business Vonage would still be able to operate because either:

      1. Someone would buy up all Veri
  • When I was looking to see what to do about a phone last year, it looked like Vonage's quarterly losses were identical to their quarterly budget for advertising. If they can stem the tide of people leaving and cut their advertising budget, maybe that brings them close to a break-even. On the other hand, I'd be foolish not to look into their competition and figure out how to hedge my bets in case they circle the drain.

    My time for taking Vonage seriously is certainly coming to a middle.

  • by IGnatius T Foobar (4328) on Friday April 06, 2007 @02:12PM (#18637067) Homepage Journal
    I'm surprised no one has posted this question yet: how will this legal battle affect other, smaller VoIP providers? I get my VoIP service from my regional ISP, and I'm very happy with it. They deliver a completely unlocked SIP service to me, and my Asterisk server uses it for outside calls. Will the Vonage patent-wielding kill my local VoIP provider too?
  • I'm tired of their commercial and the absence of any QOS is stupid. I hope they go down quick so that irritating shit gets off the air and I don't have to mute my TV when it comes on.
  • by pcaylor (648195) on Friday April 06, 2007 @02:12PM (#18637071)
    Vonage has until 4/12/07 before the new injunction takes effect. (The new injunction barring new customers which replaced the old injunction that would have shut Vonage down today if it had been implemented.)
  • As a Philadelphia Verizon customer (cell/DSL) with Vonage for home phone [Vonage doesn't publish their phone registration records to telemarketers plus the long distance benefits are amazing]....

    I am really caught between two nasty options. Ditch Verizon and hope I can get by with radio wifi (Philadelphia has Earthlink wireless), or allow Vonage to die and make other arrangements.

    I like both companies, but I can't believe Verizon "invented" anything concerning VoIP... and was just granted a rubber stamp p
  • As a Canadian Vonage user, my interest in this case is going to be how it affects me -- but nobody seems to be talking about what might happen to the Canadian (or UK) subsidiaries should Vonage US go down.

    It appears that Vonage Canada (and presumably UK) is a wholly-owned, seperate company, and isn't directly constrained by the patent suit (as Verizon has no Canadian presence or patents). However, it is my understanding that Vonage Canada relies pretty heavily on the Vonage US network for call routing (although it is also my understanding that it has been gaining a bit more independence in the past year).

    So what happens if Vonage US goes into receivership? Presumably holdings like Vonage Canada and Vonage UK will go on sale. I suspect Vonage Canada's call quality might suffer if they don't put contingency plans in place now, but that if they can stave off the loss of customers due to the US network folding, it could potentially survive (in which case, the 4 Vonage lines I have in my home, and the Vonage lines family and friends have thanks to my recommendation could keep working). But then again, if Vonage Canada isn't all that profitable (I have no idea if they are or not), they could fold up as well.

    For now I'm waiting it out, but if anyone has any better info on what could be expected for the Canadian and UK subsidiaries, I'd certainly be interested in learning more.

    Yaz.

  • by Powertrip (702807) on Friday April 06, 2007 @05:23PM (#18640093) Homepage Journal
    I have had Vonage (Canada) for about a year, and up until today it has been pretty darn good. Can't beat the features/price with any other carrier up here.

    Now, today of all days, my ATA won't connect... So I have to call support... Oh my. It must be bedlam over there, because after 5 calls, and over 2 hours on my cell phone, I could NOT get through to tech support. I can reach a human every time, but they can never assist me, and queue me up in a never-ending wait....

    I guess it's time to make the jump to Packet8 or some other Voip supplier before the whole house of cards comes tumbling down. It may not be Verizon that kills them, but the stampede of their own customers panicing....

    Brad

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