Verizon/Vonage Lawsuit As A Proxy For What's Wrong With The Patent System

from the problems-every-where-you-look dept

Tue, Apr 24th 2007 12:28pm — Mike Masnick

With the news that the federal appeals court has granted a permanent stay on enforcing the injunction placed on Vonage preventing it from signing up new customers, Tim Lee has written up a good article about how the case demonstrates many of the problems with the patent system, from software patents to obvious ideas getting patented to overly broad patents to the fact that companies are now using patents for nuclear stockpiling purposes rather than for innovation. It's an idea that we've discussed here quite a bit, and as Tim says, "Vonage's fundamental mistake was that it chose not to join this arms race. As a result, when Verizon sued, it was completely defenseless." We keep asking for people to explain to us how this is beneficial for promoting innovation, but no one seems to have a good answer. On a related note, Tim points out the latest ridiculous patent on tabbed windows, wondering "would anyone seriously claim that granting legal monopolies on the general characteristics of windowing systems is either necessary or helpful to the progress of the software industry?" Anyone?

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29 Comments

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Matt Bennett, 24 Apr 2007 @ 12:42pm

Yay!
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Cody, 24 Apr 2007 @ 1:01pm

Maybe someone should take out a patent on taking out patents...then we wouldn't have this problem. We also wouldn't have anything new being patented, but that's a minor problem, right?
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dataGuy, 24 Apr 2007 @ 1:17pm

What a mess
It's bad enough that corporations can lobby Congress to stack the regulations and tax laws in their favor but the patent system lets them skip even that step when it comes to getting a monopoly.

Tim Lee's post on that subject really got me fired up:

...the patent system cuts out the middleman and lets the rent-seekers write the regulations directly, with very little oversight by the bureaucrats. That means that the rent-seekers don’t have to even pretend their regulations are in the public interest.

http://www.techliberation.com/archives/042291.php#more
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Cal VanSant, 24 Apr 2007 @ 1:34pm

The system works
If the concepts claimed in Verizons patent were already known, and the patent office made a mistake when it issued the patent then Vonage would be running to the courts with the prior art. If you can prove that an idea is not new, you can make a patent go away. I do this for a living. The patent office and congress are working to improve the system. In the near future you may be able to send prior art into the patent office so the patent examiner is aware of what may be 'old' before a patent issues and causes problems in the market place.

What is the alternative to the patent system?
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Chuck Norris' Enemy (deceased), 24 Apr 2007 @ 1:59pm

Re: The system works
While the patent office is examining the prior art claims Vonage is still stuck without the ability to sign up new customers. So in the time it takes the patent office to review (who knows how long this could take?) Vonage will be crippled by their lack of growth. That sounds fair! The system actually does work!
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Nate, 24 Apr 2007 @ 2:38pm

System needs to be reworked
From an economic perspective, the purpose of the patent system is to encourage innovation. The reason why patents exist is to provide incentives for innovation. To the first innovator belongs the spoils. Without patents, an idea could be immediately copied and there would be no compensation for whomever originated the idea. Presumably, people wouldn't bother to innovate much because they would have little ability to gain from it. Patents ensure that the innovator will have the opportunity to profit from his/her idea.

However, too much patent law will inhibit innovation, because if a very long, strong patent is issued then the recipient has no incentive to invent anything else. Also, overly protective patents might not allow for the spread of a new idea, thereby not allowing others to build on it, and stifle innovation and progress everywhere. These ideas are taught widely in beginning macroeconomics.

When deciding this case, and deciding whether or not patents should be granted, the larger economic view should be considered. The patent office should operate according to it's purpose: fostering innovation.

The current system is old. Software and genetic patents certainly were not considered when the system was created, and today's quickly evolving markets and industries make predicting the impact of a patent difficult. The system needs to be reworked carefully, and it should be done not by beaurocrats but by economists, because economists actually understand the purpose of the patent system and are best equipped to make adjustments to it.
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Reed, 24 Apr 2007 @ 2:44pm

Re: The system works
"What is the alternative to the patent system?"

The absence of a patent system?

I am sure if we took away patents suddenly there would be no reason to innovate or to create like we have all been spoon fed.

Maybe it would have the opposite effect? Unable to control technology and innovation the companies that own the patents that no longer exist couldn't maintain their stranglehold on the market thus freeing up technology to be used and developed far quicker than otherwise possible. Think of cooperation with developing technology rather than competition.

I think there have even been real world examples such as the creation of a patent system in Italy for the pharmaceutical companies that had the opposite effect of its intent.

If patents are not really directly related to innovation and the creation of new ideas then what purpose do they really serve. My answer is privilege. They allow for a relatively small amount of people to own the rights to technology they often didn't even develop themselves. Or worse to steal ideas and then patent them to prevent other from using them. All of these things happen regularly with our patent system.

I do not think that everyone involved with patents are wrong or bad people, quite the contrary. They are good people with good intentions but their methodology is flawed. The patent system in the US is now suffering from iatrogensis where the system itself is doing more damage than good.
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Davey, 24 Apr 2007 @ 2:47pm

Re: The system works
"What is the alternative to the patent system?"

1. No patent system. It's become a useless parasite.

2. If it can't be killed, it could be staffed with sane, honest, and intelligent people. Hey, maybe I could patent that idea. It sure would look new to the USPTO.

3. Claiming patents found to be fraudulent and/or ridiculous could be made a felony.

In short, the time for patience with patents is long past. We need to throw it away and start over.
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Ben, 24 Apr 2007 @ 2:48pm

BTW
I just read Vonage has been allowed to resume business, and their stock is back up. ^^
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Chris Sherman, 24 Apr 2007 @ 3:45pm

Patents Or RFC
It seems to me that most of the purpose of pattens in the software and electronic concepts are are now being handled by RFCs. This is for the good of everyone. Then we not only get quick usable innovation but we get interoperability.

Imagine if you got vonage and your friend got skype and you could actually talk to each other. What a concept.

Patents where inventet for Physical items and still have their place for whatever invention you are making but a concept should have never been alowed.
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Chris Sherman, 24 Apr 2007 @ 3:47pm

Re: BTW
Yes that is what the first line says.
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Thomason, 25 Apr 2007 @ 6:34am

Vonage invented nada, and took the risk.
I keep reading what the defenders of Vonage write, but never do I see any indication that Vonage ever invented anything. All they get credit for is effective mass marketing, mainly using price cutting.
The Berners Lee article acknowledges that Vonage cobbled together "modular" elements, presumably from outside the Vonage 'labs'. So, why shouldn't a competitor who invented and patented what Vonage appropriated to its own use - sue?
And, all of those who keep saying Verizon 'patented a concept' don't know what's in those patents.
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RandomThoughts, 25 Apr 2007 @ 11:32am

So now, Vonage can continue business as usual, which means they will continue to lose money.

When venture capitalists look at a firm, don’t you think that they look at what patents are out there? Of course they do, they want to ensure that the money train doesn’t stop. Didn’t Vonage look at the existing patents? My guess is no, they rushed to market, just like they rushed to market with VoIP with no e911. Just like they rushed to market with their network (which was built in a way that makes having a workaround easy to get up and running.)
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Benefacio, 25 Apr 2007 @ 2:59pm

I'll take a stab...
Presuming the journalistic buzz-phrase "legal monopolies" actually refers to a patent then it is easily defendable.

Patents provide more incentive than that granted the patent holder. Patents also provide incentive for other inventors and innovators to find different ways to meet perceived needs. "Tabbed windows" is just ONE way to link multiple windows and it isn't necessarily the best way. For instance, a "task bar" showing icons is another way that windows can be linked for quick viewing.

Abundance does not promote invention or innovation, scarcity does. There is no drive to meet a need when there is no need. As Jefferson and others have pointed out, when an idea is released into the wild public arena it ceases to be scarce. Patents, like copyright, provide artificial scarcity and encourage alternative approaches.

While some people feel driven to invent just to see if it can be done I do not believe they represent a significant minority or any sort of majority of inventors. So, while we will still see invention and innovation in areas of abundance, it is scarcity, perceived or real, that drives most inventors and innovators to put their ideas into the wild and just maybe make some money.

While I agree that issuing patents for broad concepts can be bad overall it is important to remember that something that seems broad to a few can be viewed as narrow by others, and vice-versa. We have a system of courts to resolve these and other differences of opinion.
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Nate, 27 Apr 2007 @ 3:06am

Re: Vonage invented nada, and took the risk.
I keep reading what the defenders of Vonage write, but never do I see any indication that Vonage ever invented anything. All they get credit for is effective mass marketing, mainly using price cutting.

Excuse me, but isn't price cutting one of the features of capitalizism? Price cutting benefits consumers because they can afford more, and why shouldn't people use whatever service is cheaper. Why shouldn't companies compete for business by lowering prices?

To lower prices implies the "Oh yeah? Well I can do that better than you," ability. If Verizon comes up with something but sucks at it, and what they do is easily replicated, then why shouldn't Vonage be able to come in and do it better, which benefits everybody, except Verizon?

Oh, but poor Verizon is getting screwed! Listen, if you can't handle the heat, get out of the kitchen. Excellent, Verizon, so you came up with something. But, now you got lazy and Vonage can go in there and do it better than you can. But, you got a head start on them, so shouldn't you be coming up with a new idea by now? Or have developed a method of even cheaper production?

The only reason to have patents is to provide enough cushioning so that Verizon has the ability to stay one step ahead, should it seize the opportunity.
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Mike (profile), 27 Apr 2007 @ 12:38pm

Re: I'll take a stab...
Patents provide more incentive than that granted the patent holder. Patents also provide incentive for other inventors and innovators to find different ways to meet perceived needs. "Tabbed windows" is just ONE way to link multiple windows and it isn't necessarily the best way. For instance, a "task bar" showing icons is another way that windows can be linked for quick viewing.

Ah, but you miss a key point here. Patents are designed to provide more incentive only for the purpose of correcting a market failure -- i.e., that the innovation wouldn't have occurred otherwise. If it would have (as in this case seems likely) then there' simply no societal benefit for locking stuff up.

Abundance does not promote invention or innovation, scarcity does. There is no drive to meet a need when there is no need. As Jefferson and others have pointed out, when an idea is released into the wild public arena it ceases to be scarce. Patents, like copyright, provide artificial scarcity and encourage alternative approaches.

This is false in SO many ways I don't even know where to start. Scarcity LIMITS market size, while abundance increases it. Why would you ever want to limit a market size with artificial scarcity?

So, while we will still see invention and innovation in areas of abundance, it is scarcity, perceived or real, that drives most inventors and innovators to put their ideas into the wild and just maybe make some money.

This is false, both in theory and in practice (look at the research). What may drive innovation is the rewards (both monetary and non-monetary) to the innovator -- but you do not need scarcity in the idea to benefit monetarily. Take a look at the history of the Netherlands when they ditched patents and Switzerland when they had no real patent system to understand why.
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Aaron Moore, 2 May 2007 @ 9:32am

Thomason comment response
Vonage didn't invent anything but didn't have to - they bought existing technology and contracted with companies to provide service and product. Other companies - not Vonage - are the baseline providers that are using the supposedly patented technology of Verizon. Vonage is the target because they in turn are using the technologies provided to them to make a profit (or not) and take away telephone customers from Verizon.
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benjie tulali, 16 May 2007 @ 6:35am

vonage patent
VOIP is such a great inovation specially for people with lower budget and do a lot of ling distance call. It gives Americans
the chance to be more closer to their family and keep in touch with their love ones more often. Bottom line Verizon did the lawsuit due to the fact that a lot of customers are running away from them since they cherge so much fees and taxes on their services. I think the Federal Communication Commission (FCC) and see if its really beneficial to the consumers and should be given the choice wether they prefer a traditional phone line or VOIP service.
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benjie tulali, 16 May 2007 @ 6:39am

vonage patent
VOIP is such a great innovation specially for people with lower budget and do a lot of long distance call. It gives Americans
the chance to be more closer to their family and keep in touch with their love ones more often. Bottom line Verizon did the lawsuit due to the fact that a lot of customers are running away from them since they charge so much fees and taxes on their services. I think the Federal Communication Commission (FCC)should get involve and see if its really beneficial to the consumers. and we should be given the choice wether we prefer a traditional phone line or VOIP service.
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AC, 6 Jun 2007 @ 4:08pm

I'm in the Army, and VoIP makes it possible for many servicemembers stationed overseas to communicate with their families. AT&T charges the troops a ludicrous amount of money for their copper line services in Iraq, and the ISP where I'm at here in Korea charges us by the minute for a VoIP call back to the USA. The local ISP here got irate when they saw all of its business was going to USA-provided VoIP companies, threatened to block us, but realized they didn't have the technology to do so. However, the government is turning a blind eye to it. Even though we live here, we don't pay Korean taxes. Not to mention, the Koreans know the value of free enterprise and how important it is not to monopoly products.

It looks to me that Verizon is attempting to bury VoIP into the ground the way Andrew Ford bought rails and destroyed them so the only option to get to work in most communities is to buy an automobile. Now we are facing issues such as global warming, high gasoline prices, high death rates due to automobile accidents, and Ford is losing the automotive race to Japanese car making companies.
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|333173|3|_||3, 11 Jun 2007 @ 8:14pm

tabbed windows
Has anyone read the patent to find out if they mean tabs ain in Firefox, wehre there are several documants but only one window with all the controls on, or if they mean tabs as in a typical windows option pane. In the former case, I think virtually everyone has reaslised the superiority of using tabs as opposed to several windows on a taskbar. OTOH, in the latter case, the option is to set up the pane like the OS X print setup dialouge, which is clearly inferior.
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M Byll, 16 Oct 2007 @ 5:57am

Jeremy Reimer is not a computer expert/authority b
http://www.cwrl.utexas.edu/node/933

Seems that Jeremy Reimer has been exposed as a "wannabe" who has no degree or certification in computer related disciplines and that he has no years to decades of actual hands on professional experience in the trenches doing the job. Do you think he is worth listening to? I do not.

http://www.windowsitpro.com/articles/index.cfm?articleid=41095&cpage=193#feedbackAnchor

In the 2nd url just above, Jeremy Reimer was also caught impersonating others on his forums online, email harassing others (his isp shaw.ca caught him here), & had portions of his website removed under force by his hosting provider. Reimer's colleague in this and friend, Jay Little, also had his entire website removed by crystaltech.com for his misdoings as well.
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MByll, 16 Oct 2007 @ 6:02am

Jeremy Reimer is not a computer expert/authority b
http://www.cwrl.utexas.edu/node/933

Seems that Jeremy Reimer has been exposed as a "wannabe" who has no degree or certification in computer related disciplines and that he has no years to decades of actual hands on professional experience in the trenches doing the job. Do you think he is worth listening to? I do not.

http://www.windowsitpro.com/articles/index.cfm?articleid=41095&cpage=193#feedbackAnchor

In the 2nd url just above, Jeremy Reimer was also caught impersonating others on his forums online, email harassing others (his isp shaw.ca caught him here), & had portions of his website removed under force by his hosting provider. Reimer's colleague in this and friend, Jay Little, also had his entire website removed by crystaltech.com for his misdoings as well.
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M Byll, 16 Oct 2007 @ 6:15am

Jeremy Reimer also posts under multiple guises to
Jeremy Reimer and his friends were also caught here:

http://www.windowsitpro.com/articles/index.cfm?articleid=41095&cpage=213#feedbackAnchor

Posting as others (i.e. same person posting under multiple names/guises/nicks/handles) along with his friend Jay Little above to "support one another" when they were found SO technically inacurrate, they were laughed off that site and both of them outright left & that was after law enforcement were called on them both. Windows IT Pro is a widely read publication in the field of computers.
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Cheryl Blakeney, 18 Dec 2007 @ 11:48am

vonage fees to cancel
I signe3d up for vonage and within my 6 months cancelation term I returned my device because my computer was incompatible with the device. with no service I was charged a $28.99 monthly fee APPLIED TO MY DEBIT CARD, and when asked vonage it's in the fine print? You have the device you are billed and to cancell before a phone number is assigned, they will deduct another fee of $40.00, so prior to having service you will be charged
Device charge $49.99
rebate (49.99)
activation fee $29.99
credit back (29.99
Prepay service a month in advance $24.99
recovery fees $.99
Emergency 911 $.99
---------------------------------------------
Fed'l Universal Service Fee $2.02
reversed? (2.02)
Shipping $14.95
----------------------------------------------
TOTAL CHARGED UPFRONT $44.95
CANCELLATION WITHIN 60 DAY MONEY BACK PERIOD $39.99
ACTUAL AMOUNT REFUNDED $44.94
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Mr. Al Yusuf, 12 Feb 2008 @ 1:10am

Dear Friend
Dear Friend My Name is Mr.Al Yusuf,i am 56years old. Am a citizen of U.A.E, but i am resident in U.A.E. I was born an orphan in 1952. I have no father or mother, and i have no relatives.I struggled and Worked Hard and Almighty blessed me abundantly with riches. I used to be a dealer in gold, diamonds and tantalite. I have no wife but i happend to have a child of 5Yrs from my late wife who happens to die of Cancer of the Breast. For 2 years now i am seriously sick. I have been diagnosed with Cancer which was discovered very late, due to my laxity in caring for my health. It has defiled all forms of medicine, Right now I have only about a year to live, according to my Medical Doctor. I have not particularly lived my life so well since after the death of my wife four years ago, as I never really cared for myself but the business. Though I am very rich, I was never generous, I only focused on my business as that was the only thing I cared for. But now I regret all this as I now know that there is more to life than just wanting to have or make all the money in the world. I believe when God gives me a second chance and heal me I would live my life a different way from how I have lived it. Please i have sowed a seed for my healing; I have willed and given most of my properties and assets to my immediate orphans childrens and as well as a few close friends.I want God to be merciful to me and accept my soul and so, I have decided to give arms to charity Organizations and give succor and comfort to the less privileged of the Tsunami Victims, as I want this to be one of the last good deeds I do on earth. So far, I have donated money to Some charity organizations. Now that my health has deteriorated so badly, I Cannot do this my self anymore. I once asked a close friend of mine to close one of my accounts in Saudi Bank and donate the money which I have there to charity organization and to the less Privileged in Bulgaria and Sudan-Africa he cashed the money but kept it only to himselves. Hence, I do not trust him anymore, as he seem not to be contended with what I have left for him already. The last of my money, which no one knows of, is the huge cash of Twenty Two million(22 Million US DOLLARS) deposited in the Vault of a financial institution in Europe for Safekeeping. I want you to collect this deposit on my behalf and disburse thus 30percent of the total amount among the Mudslide Earthquake Victims in Asia, Hurricane Katrina, Hurricane Rita, Hurricane Wilma and for the less Privileged, 30percent for you for your time and efforts and 40percent for my only child for his upbringing as you will be responsible for his education,health and other activities. So i need your urgent reply so that I will not have to go on sourcing for a credible person to handle this project, please if this is what you Know that you can handle kindly respond back to me with the information below. 1.Complete Name 2.Contact Adress 3.Phone/Fax number 4.Age and occupation Best Regards Sarah Mohammed (Nurse) For: Mr.Al Yusuf PLEASE REPLY MY MAIL WITH THIS EMAIL
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Jeremy Judenberry, 7 Mar 2008 @ 5:27am

Jeremy Reimer is a psycho
Jeremy Reimer has no degree or certifications in computers and no professional hands on years to decades of experience in them either.

Jeremy Reimer was caught email harassing, impersonating, & bothering others online needlessly. That ended up having Jeremy Reimer's website have portions removed and his friends that helped him in it (a Mr. Jay Little of Atlanta Ga. USA) had their websites removed in their entirety. See here for that:

http://www.windowsitpro.com/articles/index.cfm?articleid=41095&cpage=216#feedbackAnchor

Also, others from educational institutions where actual professional journalism & writing are taught, are questioning Jeremy Reimer's validity & credibility as a writer, period, here:

http://www.cwrl.utexas.edu/node/933

All Reimer does is spit back what others wrote already anyhow. He is an ambulance chaser at best. A mere "hack" reporter.

Jeremy Reimer and his friends were also caught here:

http://www.windowsitpro.com/articles/index.cfm?articleid=41095&cpage=216#feedbackAnchor

Posting as others (i.e. same person posting under multiple names/guises/nicks/handles) along with his friend Jay Little above to "support one another" when they were found SO technically inaccurate, they were laughed off that site and both of them outright left & that was after law enforcement were called on them both. Windows IT Pro is a widely read publication in the field of computers.
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nice, 24 May 2009 @ 12:45am

hi
China printing industry developed this years, who can tell us? China based plastic injection molding services with low costs and supeior quality Steel and aluminum scaffolding for construction is a very useful tool.
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Patty, 5 Jun 2009 @ 12:39pm

Re: Re: The system works
vonage is a bad company they just take your money their product is so bad I regret to change to them everytime you call them for same solution on the phone problem, they do not do their job, they said is $24.99 a months and then you get a bill for more then $50.99 plus international call, BAD COMPANY
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