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After what seemed like the end for Vonage, things are starting to look up

The U.S. Court of Appeals for the Federal Circuit on Friday blocked a partial injunction set against Vonage.  The injunction, which was set earlier that day, denied Vonage from signing up new customers.  After the decision was made, Vonage filed for and received an emergency stay of the injunction from the Federal Circuit, according to a press release.

The relief for Vonage came after a decision to let the judges consider all arguments before placing a permanent injunction.  A copy of a one-page report, released to CNET, states that Vonage will give Verizon until April 13th to respond to a request to lift the partial injunction during the appeal process, which was signed by Judge Paul Michel.

Judge Hilton also ordered Vonage to post an immediate $66 million bond on Friday while the appeal is carried out.

Verizon's opposition to anything more than a stay of permanent injunction made quite a stand also on Friday.  The company's attorneys claimed that as long as Vonage is able to sign on new customers, it was "leeching" Verizon's potential customer base.

Vonage will take a heavy blow if the request for the stay of permanent injunction is denied, forcing the VoIP company to cut-off its new member sign-ups.  The injunction added to payouts and legal fees are expected to topple the company



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Traditional Telcos see the writing on the wall
By AlexWade on 4/9/2007 8:13:18 AM , Rating: 2
Along comes Vonage, a service that allows people to make phone calls cheaper and just as good as land-lines. Obviously, they are threatened. Traditional telcos have been trying to stick it to us for a long time now. You can't buy DSL without buying home phone service. At least you can get cable modems without cable TV.

Telcos have to change their business practices or die. Verizon, at least, has cell-phones and soon cable TV over internet to fall back on. AT&T/Cingular/SBC/BellSouth also have cell-phones to fall back on and also the new AT&T also has VoIP. Those that don't, like Embarq which split off Sprint after the Nextel merger, are doomed.

There will come a day, and it is soon, where home phones are obsolete. I've been without a land-line for 5 years. Cingular service has been so rock-solid in my area, I decided to save money. I've only got two numbers. A cell-phone number and a toll-free number that goes to my cell phone for my business.

Traditional telcos days are numbered. Verizon knows this, and that is why it is suing the threat. Patents expire, and when they do, unless telcos adapt, they will die.




By masher2 (blog) on 4/9/2007 8:33:13 AM , Rating: 6
> "Traditional telcos days are numbered..."

Traditional RBOCs perhaps...not telcos in general.

> "Verizon knows this, and that is why it is suing the threat..."

Verizon is suing because their patents were infringed...or they feel they were, at least. There are countless VOIP providers not being sued by Verizon...Vonage wasn't simply picked out of a hat. Even Verizon itself offers VOIP service.


By zombiexl on 4/9/2007 9:09:42 AM , Rating: 3
quote:
Vonage wasn't simply picked out of a hat.

No they were picked because they are the biggest voIP threat to verizon. So they were picked out of a hat that only included them.


By Lord 666 on 4/9/2007 9:18:04 AM , Rating: 6
Masher, when you have some time on your hands, take a look at the patents. While I don't think you have Cisco Callmanager or VoIP experience, all of Verizon's claims have also been occuring in the Cisco/Selsius world prior to these patents. Additionally, they are overly broad refering to implimenting IEEE standards of H.323 at the gateway and sending voice calls over wireless means. I admit my my legal forte is not in patents, but based on the language of them they are overly broad.

http://en.wikipedia.org/wiki/Vonage#Verizon_lawsui...

or

US patent 6430275 - Callmanager has been doing prior to Aug 2002

US patent 6137869 - Callmanager mostly except the rate plans

US patent 6104711 - Callmanager allows multiple registrations of MAC, extension, description, or device pool

US patent 6282574 - Callmanager has been doing. They do not mention a specific protocal other than TCP/IP

US patent 6298062 - Callmanager and the Unified Communications platform allow (old school Personal Assistant to Mobility Manager)

US patent 6128304 - Packetizing voice between traditional PSTN and VoIP using H.323. Isn't that the point of a gateway and the IEEE H.323 standard? Callmanager and several other VoIP providers have been doing this for years, even prior to 2000.

US patent 6359880 - The mostly loosely worded patent, use of VoIP transmission over wireless. No mention of protocols. Callmanager and other VoIP systems have been doing for prior and through the patent date of 03/2002

As Masher has previously stated, patents are vaguely worded for several reasons, one of them not to give away the true intention or idea and to reduce the amount of "wiggle" room to protect the general theme of the patent. However, in this case I personally feel that Verizon is over-reaching and it will broadly hurt the VoIP field.

Disclaimer: Lord 666 has been a happy Vonage customer since summer 2004


By masher2 (blog) on 4/9/2007 9:56:34 AM , Rating: 4
> "[the patents] are overly broad..."

That wouldn't surprise me in the least. However, if they are ruled such, then Vonage can get a declaratory judgement invalidating them.

I agree that the preliminary injuction barring Vonage from signing new customers was unwarranted-- the facts need to be heard first. But if the patents are upheld, then Verizon has a right to legal relief.

Patent examiners may be idiots, but federal judges tend to be a bit sharper. Patents are regularly thrown out for prior art, failing the nonobvious test, or being overly broad. If this really is the case, the system will hopefully sort it out.


By AlexWade on 4/9/2007 1:49:26 PM , Rating: 2
The patent claims may be valid, and if they are Verizon has every right to sue. But why only Vonage? Why not AT&T, which also offers VoIP? Why Time Warner, which also offers VoIP? Why did Verizon choose to pick a fight with the little guy that posses the biggest threat and who doesn't have enough money to legitimately challenge them? Why only one company? Why not others? That is what makes Verizon's claim so ludicrous.

The communication world is changing. The ones that survive will be the ones ahead of the curve or the ones who adapt.


By masher2 (blog) on 4/9/2007 1:55:13 PM , Rating: 2
> "Why did Verizon choose to pick a fight with the little guy "

Because that's the guy using their patents. AT&T uses different methodologies to validate users and route calls. TW does presumably as well.

As far as Vonage being the "little guy", in the VOIP market segment, they're the 800 lb gorilla. Patent infringement awards are usually based on the revenue received from the infringement itself. It doesn't makes good financial sense to go after a company which isn't making a large revenue stream from VOIP.


By weskurtz0081 on 4/9/2007 8:51:35 AM , Rating: 2
I have DSL with no home phone line through verizon. They assigned me a fake number and hooked the DSL service up. No big deal.

wes


By zombiexl on 4/9/2007 9:17:52 AM , Rating: 2
I have been offered this as well from verizon, but the surcharge they want to do that plus sign no contract makes it a joke when compared in cost/speed with cable.


By jonb76 on 4/9/2007 1:25:19 PM , Rating: 2
I have never replied to any topic before, but since I actually work for one of the company's listed, I figured I should give my 2 cents worth.

First off, Vonage is not that much cheaper than POTS (Plain Old Telephone Service). In this area (South Florida), POTS with Call Waiting, Caller ID, 3-Way Calling among other features costs $29.95. Vonage is $24.99. True, this does not include long distance, but for $15 more a month you can have unlimitied long distance. Really though, most people (around 60-65% according to a company survey, of course you know those numbers could be skewed) use thier cellphones to make Long Distance Calls inside the US. One thing Vonage does not have is a good E-911 System. Really it is something to be desired. In a true Emergency, seconds can really mean life or death. I truly hope Vonage gets that problem taken care of, although because of the infrastructure you have to have to be able to have E-911 calls route properly, I doubt that it will.

As far as Telcos days are numbered, I hate to tell you, but that is just not the case. There are too many businesses that need POTS. They can not deal with not having phone service. On top of that, who do you thinks sells the cable companies the DS3s, OC3s, OC12s, etc. they need to have High Speed Cable Internet? We also provide leased fiber to schools, cell phone companies, banks, etc. for highspeed WANs. Truthfully, we may be losing POTS lines, but really we are growing. Telcos have always been a data provider. We just are more so today than ever.

And don't forget about Net Netraulity. Telcos do want that as another revenue stream. But even if it did happen (which personally I don't think it will), it would be cheap. There are just too many competitors out there who would undercut almost everybody to get new customers. It would be simular with what happen to Long Distance companies. Right now you can call anybody in the US for pennies now. You couldn't do that 10 years ago.

Technology is always changing. Companies will survive if they can embrace the new technology. Vonage may be a step in the right direction, but vonage is just a service. You have to have Highspeed Internet to use it. Really Vonage is the last thing on Telcos minds. We are more worried about cable companies offering thier own VOIP, and opening up thier network for data services.


Uh...
By Erehwon on 4/9/2007 7:54:49 AM , Rating: 3
"The company's attorneys claimed that as long as Vonage is able to sign on new customers, it was "leeching" Verizon's potential customer base."

Uh...isn't Verizon's potential customer base everyones? So I can't go start a new company and try to attract new customers becuase they potentially all belong to Verizon!

"All your bases belong to us"




RE: Uh...
By zombiexl on 4/9/2007 9:21:08 AM , Rating: 2
Yes.. This would be like MS saying every linux/mac user is potentially a MS customer and the court being asked to stop OSX and the 10000 linux distros from being sold.

Then again if that happend what would MS copy for their next OS? :)


RE: Uh...
By masher2 (blog) on 4/9/2007 9:58:32 AM , Rating: 2
> "Uh...isn't Verizon's potential customer base everyones? So I can't go start a new company and try to attract new customers becuase they potentially all belong to Verizon!"

Actually, what the judge said was, you can't start a new company with Verizon's technology, and use it to attract new customers.


RE: Uh...
By TheTerl on 4/9/2007 10:32:35 AM , Rating: 2
I absolutely agree that Vonage can't just use Verizon's technology, but I also don't think that's an entirely fair assessment of the situation. After all, it's not as if Vonage stole the entire technology base, it was only a few patents in question. Besides, Verizon was awarded a judgement and royalties against future Vonage revenue, so it's not like Vonage is getting away with anything. If Verizon thinks the judgement was too small, then by all means it's their prerogative to appeal. I just don't think that banning Vonage from taking on new subscribers is the most appropriate remedy for infringement in this situation--a point we more or less seem to agree on.


RE: Uh...
By masher2 (blog) on 4/9/2007 11:14:28 AM , Rating: 3
> "If Verizon thinks the judgement was too small, then by all means it's their prerogative to appeal..."

The judge who issued the no-new-customer injunction is the same one who issued the judgement you mention. It's the same case.

> "I just don't think that banning Vonage from taking on new subscribers is the most appropriate remedy..."

They were banned from taking on subscribers only while they were using Verizon patents. Once they convert to noninfringing technology, they would be able to continue business as usual.

> "After all, it's not as if Vonage stole the entire technology base, it was only a few patents in question"

I'm not following your logic here...since they didn't steal everything Verizon owned, they should get off light?


RE: Uh...
By TheTerl on 4/9/2007 12:21:39 PM , Rating: 2
All good points, and I'm not disagreeing with most of them. However:

quote:
The judge who issued the no-new-customer injunction is the same one who issued the judgement you mention...

I was under the impression that the judgement was recommended by a jury. Is this not the case?

quote:
since they didn't steal everything Verizon owned, they should get off light?

Not at all, Vonage was found liable, and should be punished accordingly. The key, of course, is the accordingly part. Is the partial injunction legal, according to patent law? Absolutely, I don't think anyone disputes that. Is it fair to both parties involved, considering the nature of the infringement? I can't be sure, but I have my doubts--and so does the US Court of Appeals, hence the temporary lift.


RE: Uh...
By masher2 (blog) on 4/9/2007 12:33:23 PM , Rating: 2
> "I was under the impression that the judgement was recommended by a jury."

It was, then issued by the judge. My point was that its the same case, and not some separate action.

> "I can't be sure, but I have my doubts--and so does the US Court of Appeals, hence the temporary lift. "

Not quite. The Appeals Court didn't rule on the validity of the injunction, but simply stayed its execution until the judges could hear the arguments. In other words, they're not calling the injunction unwarranted, but rather premature.


Hmm..
By threepac3 on 4/9/2007 7:41:40 AM , Rating: 2
Well that explains it... I was wondering why Vonage was showing there commercials again.




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