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Vonage Settles Patent Suit With Sprint-Nextel 45

Posted by ScuttleMonkey from the money-can-soothe-a-lot-of-hurt-feelings dept.
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.
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Vonage Settles Patent Suit With Sprint-Nextel More

Vonage Settles Patent Suit With Sprint-Nextel

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  • Makes sense for Sprint (Score:4, Insightful)

    by Anonymous Coward on Monday October 08, 2007 @04:55PM (#20904307)
    It was smart to settle now and get some money than to wait it out in the courts while Vonage slowly goes out of business.
  • Why don't they just tape PC speakers and microphones to phones. I bet know one patented that yet.
  • Sprint sees the way the patent winds are blowing and wants to get while the gettin' is good.

    • Re: (Score:3, Interesting)

      by Sergeant Pepper ( 1098225 )
      I seriously doubt that. As much as I'd like to believe that the federal government may be coming to some sense regarding patent decisions, I can't help but believe that that will change - and for the worse.

      Really, I think any present break in the insanity is merely the eye of the storm, if you will. From here it will probably just go back to how things used to be.

  • Next up: (Score:3, Funny)

    by v_1_r_u_5 ( 462399 ) on Monday October 08, 2007 @04:58PM (#20904339)
    Next up: Vonage vs Verizon in a net neutrality battle. With that pesky net neutrality out of the way, Verizon customers will receive high QOS. Vonage packets will get there. Eventually.

  • Next up: Bankruptcy (Score:5, Insightful)

    by mind21_98 ( 18647 ) on Monday October 08, 2007 @05:03PM (#20904379) Homepage Journal
    You know it's going to happen. And then Sprint Nextel and the other carriers will be congratulating themselves at maintaining the hold they have on telecom. :(
  • How bad this is. The claims they used to make Vonage pay them are nebulous at best and could have been dreamed up by the average /.'er on a lazy afternoon.

    The SIP protocol offers many novel ways to communicate. The least of which is a simple phone call. In one way, it is vonage's fault for choosing to stick to dumb phone call only because there were many neat possibilities awaiting consumers in SIP.

    I fear for all of the smaller business voip/ISP outfits now that the first domino has fallen.

    • Re:Many of You Have No Idea (Score:4, Informative)

      by Ungrounded Lightning ( 62228 ) on Monday October 08, 2007 @05:32PM (#20904673) Journal
      The SIP protocol offers many novel ways to communicate. The least of which is a simple phone call. In one way, it is vonage's fault for choosing to stick to dumb phone call only because there were many neat possibilities awaiting consumers in SIP.

      The SIP protocol also lets anybody play without paying for anything (except for generic network service).

      With SIP the ONLY thing Vonage has to sell that can't be had for free is bridging to the public switched telephone network. Which is what those patents are about.

    • I fear for all of the smaller business voip/ISP outfits now that the first domino has fallen.

      This is an immediate consequence of allowing people who own the infrastructure to sell services on that infrastructure. The current state of affairs with respect to the ILECs/CLECs is an obvious example. I know that AT&T put my Speakeasy service on low priority because they weren't seeing much money from it. My line problem went unfixed for about a week before they got around to it.

      A strict separation between

  • Massive insider trading Vonage? (Score:3, Insightful)

    by Anonymous Coward on Monday October 08, 2007 @05:13PM (#20904477)
    The news is out today and the stock is up 123%. But it is up about 260% since Thursday.. The volume on Friday was 4X normal.

    Who were all those traders with inside information? And will anything be done about them? You so rarely hear about prosecutions for insider trading...

    Date Open High Low Close Volume Adj Close*
    today 1.56 2.70 1.41 2.57 34,993,632 2.57
    5-Oct-07 1.05 1.23 1.02 1.15 4,172,700 1.15
    4-Oct-07 1.00 1.05 0.98 1.03 2,463,000 1.03
    3-Oct-07 1.00 1.01 0.97 1.01 1,053,700 1.01
    2-Oct-07 0.99 1.03 0.96 0.98 1,662,100 0.98
    1-Oct-07 1.03 1.03 0.96 0.96 1,295,600 0.96

    http://finance.yahoo.com/q/bc?s=VG&t=5d [yahoo.com]

    • Re:Massive insider trading Vonage? (Score:4, Informative)

      by hedwards ( 940851 ) on Monday October 08, 2007 @06:31PM (#20905223)
      It probably isn't insider trading. In order for it to be insider trading the people doing the trading would have to have information that is not available to the public. In this case, the share price has been so low that it doesn't take a whole lot to get things to jump around. That 260% is only 1.50 or so in dollars, and while it is indeed a large change for such a cheap stock, stocks to jump by that much on a fairly regular basis.

      Especially if the company goes from looking dead in the water to having a decent chance at continuing to function. SCO would have done the same thing if for some reason the judge had ruled that they owned the UNIX copyrights.
      • I think you have missed the original poster's main point. The news was out today Monday. Thus stock activity today makes sense, but unusual stock activity on Friday, before the settlement was general knowledge, could imply that insider knowledge was at work.

        I think your point about the low price is good, but you ignore the point about volume that the parent made. Since the price increase went hand-in-hand with a high volume of trading, I would say that the evidence points more toward insider trading t
        • There really wasn't much change in the activity on Friday. The big change was on Monday, the day that things were announced.

          As AC said, since this was hardly unpredictable, vonage was going to have to make a settlement if they wanted to stay in business. The activity on a stock doesn't say anything about the number of people buying or selling, just the number of shares being exchanged. It could be three people buying and selling, or it could be 3 million doing so.

          The more likely explanation is that somebody
    • While there possibly were traders with inside knowledge, it's also highly probable that the majority were speculators. Either the stock goes up a fair bit, it drops a fair bit, or it stays relatively even money. Your odds of coming out ahead are 50/50 -- better than the horse races.
       
  • Patent reform is something that I am a huge fan of and I have every hope that there will be some reformation shortly but I don't see any major changes happening until well after the elections. Too many company-owned politicians will likely prevent any real major changes to the patent system during the time when elections are gathering steam.

    • Except... (Score:3, Interesting)

      by maz2331 ( 1104901 )
      Except all the notable changes lately have been in the courts. Especially the Supreme Court, where the Justices have been dropping strong hints that they are willing to overturn a lot of the patent craziness that's been going on for the past 10 - 15 years or so.

      • Re: (Score:1)

        by KGIII ( 973947 )
        I suspect that it is more posturing than actually doing - at least not until after the '08 elections. I could, easily, be mistaken and I'm not a political science buff or anything other than some courses back when the Cold War was still actually going on but I try to follow as best as I can. I don't know... From what I've seen, historically, very little of great importance tends to get done during the campaigning cycles. With the primaries moved up and the campaigns now having run for some six months or mor
  • Can I sign up for Vonage and not fear it will be closed down in a week?

    • Re: (Score:1)

      by CRiMSON ( 3495 )
      I wish the company would speak on this issue, Are they screwed, are they in danger (they'll never speak openly about it) but it would be nice for them to come out and say, were fine.. business as usual. Or come and say please look for an alternate provider, you've got 2 months.
  • I wonder if there is any correlation?

  • This could be a win for Sprint/Nextel customers (Score:4, Interesting)

    by suitepotato ( 863945 ) on Monday October 08, 2007 @05:52PM (#20904857)
    Many times your cell is useless in the home. At least one other cell company has already fielded a product where when you put the phone on the cradle, all extensions go through that cell. Next could instead be a system where when you put the cell down on the dock, the extensions go through it AND the calls then go from the cell to the IP-based system to save you battery use on the wireless transmissions, or if the base had a stand-by charger in it as well, at least offload their cell systems from calls taking place at home.

    Then, I get to use my Sprint phone over Vonage at home, and over Sprint cellular when I take it with me. Put multiple docks in and have them have a nice little menu system to choose the phone to go through (in case three family members are home and have docked their phones). I can call out through my wife's if mine is already being used by something else dialing out.

    Vonage could be a foot in the door to VoIP linkage to Sprint's system. Might seem a longshot, but there's been longer shots before...

    • Re: (Score:3, Interesting)

      by TooMuchToDo ( 882796 )
      I have T-Mobile@Home. It's an add-on to my T-mobile service whereby my phone (Blackberry Curve) uses my 802.11b/g access point at home to route my calls instead of a cell tower. The phone will actually use any Wi-Fi access point I have access to (home, work, Starbucks). In return for taking my call off of the cellular network, T-Mobile doesn't charge me for the call (doesn't come out of my minutes) when it rides the public net.

      I don't work for T-Mobile, I've just been a very satisfied customer for the las

      • Re: (Score:2)

        by jtcm ( 452335 )

        my phone uses my 802.11b/g access point at home to route my calls ... T-Mobile doesn't charge me for the call

        Does the @Home service work with a prepaid SIM card?

        • I just checked with T-Mobile customer service, and right now they're only offering the option for postpaid customers (not prepaid). The customer service rep mentioned that they are looking to expand the feature to prepaid users at sometime in the future.

          I'm currently working with a couple of guys deployed in Iraq who have T-mobile so that they can use their own phones out there. I should probably detail all the tech details about our we work with GSM over IP on a web site somewhere....(perhaps when I get

  • Dinner is on me tonight, folks. When VG dropped below a dollar and everybody thought it was gonna go completely under, i stayed the course.

    And you wanna know what originally got me interested in this stock? Reading the article on slashdot about Vonage getting sued.

    HAHA! /yes, I'm gloating.

  • Vonage isn't a service (Score:4, Interesting)

    by cdrguru ( 88047 ) on Monday October 08, 2007 @08:01PM (#20906025) Homepage
    They are a reseller of an existing service - access to the telephone network. They do not provide anything on their own. No service, no infrastructure, no protocol on an existing infrastructure. Instead they are using the infrastructure that exists because of the telephone carriers as a club to beat them to death. Interestingly enough, if Vonage ever really succeeds and Sprint or Verizon shuts their doors, Vonage loses.

    An exact parallel to this would be delivering IP video to cable customers through their cable modem. You buy a little box which takes the video data stream and outputs a video signal. Then the cable customer could drop television service in favor of this new service. Except in order to get the video programming the provider is a cable subscriber. So the cable company would get to be both the network and the wholesaler of the programming. Since the programming would be almost free (1 cable subscriber bill) it should make tons of money, right?

    If the above seems like a clever idea to you, I've got another one. Have a little cart from which you sell hamburgers. You can take the cart around to people on the street so they don't have to drive or walk as far. In order to get these hamburgers you just work out a bulk purchase plan from McDonalds and resell them from your little cart. The idea would be to get McDonalds to agree to a such a low price that you could make money on this.

    How long do you think such buy-bulk-services-for-resale schemes can go on? Sooner or later if you treat your supplier as a competitor your supplier is either (a) going to shut down or (b) shut your service off. Either is death to the buy-in-bulk reseller.

    Sure, you can say that the infrastructure (or the hamburgers) should be public and any retailer should be able to use this infrastructure to compete with each other. That's fine now that it exists. But in order to get that first hamburger (or telephone switch) it was necessary to make a risky investment. Governments are not in the business of making risky investments. They either invest in sure things or they line up someone else to get the privilege of making the investment. We wouldn't have the phone system we have today if it was up to the government in 1900 to build it. They would have waited until 1950 to do it and then where do you think the US would be?
    • They do not provide anything on their own. No service, no infrastructure, no protocol on an existing infrastructure. Instead they are using the infrastructure that exists because of the telephone carriers as a club to beat them to death. Interestingly enough, if Vonage ever really succeeds and Sprint or Verizon shuts their doors, Vonage loses.

      Not really. The infrastructure will still be there, and still be worth something, so somebody will buy it and Vonage will use it. Hell, maybe Vonage will end up
  • I guess the same thing. Because, besides locking their devices to them exclusively, they are using voip standards (sip), which besides proprietary startups like skype, is the same thing most voip providers are using.

    So I assume they are all infringing? I'm amazed a standard like sip came to fruition without anyone noticing these patents looming. And come to think of it, how is skype making the leap to the pstn network without infringing?

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