Vonage Loses Yet Another Patent Case
from the not-looking-good dept
Vonage has already had enough trouble actually making their business profitable without having to worry about a barrage of patent lawsuits over highly questionable patents. But thanks to a patent system that approves a tremendous number of overly broad patents on obvious ideas, that's what you get. Already appealing a similar case from Verizon, a jury has found Vonage guilty of violating a bunch of Sprint patents. Juries will often find in favor of the patent holder, so this isn't much of a surprise. Vonage will most certainly appeal and the case is far from over. However, given how much effort the company needs to put into fighting these patents, the company may not be able to survive. The really sad thing is that the technology behind VoIP has almost nothing to do with Vonage's success. There were a ton of companies that had tried and failed to make popular VoIP plays before (and after) Vonage. What Vonage did was actually innovate: taking the basic idea that everyone knew about, and turning it into an offering that people wanted to buy. That's where Verizon, Sprint and other incumbents failed. For them to come back afterwards, and claim patent infringement is simply sour grapes. They were unable (and unwilling) to create the services that people wanted -- and now they want to shut down the company that actually did innovate -- and they're likely to succeed. That's not how the patent system is supposed to work.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: patent thicket, patents, voip
Companies: sprint, vonage
Reader Comments
Subscribe: RSS
View by: Time | Thread
Coming soon...
[ link to this | view in thread ]
[ link to this | view in thread ]
Amen
Ok, enough ranting. OH, and death to the RIAA. :)
[ link to this | view in thread ]
Amen
Ok, enough ranting. OH, and death to the RIAA. :)
[ link to this | view in thread ]
These patent lawsuits are not what will kill Vonage, their business model will. Their only product has become a commodity and is a product that their competitors would be willing to give away in order to gain greater customer wallet share. Would you invest in a company that has thin margins, doesn’t control its own product and has to rely on competitors for both service and quality?
There were a ton of companies that tried and failed to make popular VoIP prior to Vonage but that was because the market wasn’t ready. Vonage had nothing to do with that. Vonage didn’t innovate, they marketed. They needed to upgrade their network and spend some money doing so. They didn’t, they hired more workers for their call center. They bought commercials. They bought banner ads. Sorry, but that isn’t innovation. Innovate by selling phone service (that is what they offered) and then get in trouble when they have to admit that its not really phone service because 911 didn’t work, e911 didn’t work.
Are these patent lawsuits good or bad? I don’t know, but to say that Vonage innovated or is the example of anything is wrong. These patent lawsuits are not the only suits filed against Vonage. There are also shareholder lawsuits pending concerning their IPO. Vonage’s whole business model was getting as many customers as possible and then selling out. They missed their opportunity when Skype went first. After that, no one wanted to buy them and they had to go public.
Forget about the lawsuits, because that is not what will kill Vonage. Their business model will.
Will Vonage’s death end VoIP? Ummm, no. Pretty much all cable companies offer phone service using VoIP, Verizon has offered VoIP through VoiceWing, AT&T offers VoIP through CallVantage, many other companies offer VoIP. If you want to champion a case, don’t pick Vonage or Citron. Too many problems there.
[ link to this | view in thread ]
Re: Coming soon...
One thing to remember with another item that actually hurts Vonage. The VoIP service you receive from a MCO is actually different from the service Vonage or any other pure play phone offering that is out there. Vonage calls run through the "public" Internet. That is "best effort" which might not be all that. If you have phone service from a cable company, your service runs on a different network. A better network. Your calls receive priority over other traffic. With Vonage, not so much.
I would sign up for Cablevisions phone service, but my data goes down often, so why would I trust them with my phone service. If I had Vonage, when my data went out, my phone would go out. That is another problem that Vonage faces, their service relies on the ISP.
[ link to this | view in thread ]
Infringe run thru spell check won't become innovat
[ link to this | view in thread ]
Re:
These patent lawsuits are not what will kill Vonage, their business model will. Their only product has become a commodity and is a product that their competitors would be willing to give away in order to gain greater customer wallet share. Would you invest in a company that has thin margins, doesn’t control its own product and has to rely on competitors for both service and quality?
I think you're missing the point of the story here. The patents being contested in these suits pretty clearly should not have been granted. There is a wealth of prior art on voip. Whether or not Vonage would have gone the distance as a pure voice provider, Sprint/Verizon/et al are using patent suits as a way of stifling competition, which is a pretty clear abuse of the patent system.
[ link to this | view in thread ]
Personally, I think they are trying to kill off Vonage just because they can, not because they were (or are) this huge threat.
When they go after the cable companies, then I might believe that they are trying to stifle innovation.
[ link to this | view in thread ]
The answer is quite a few. Now how exactly has this hurt innovation?
Even using your description of innovation that means cut the price and create stupid ads, how have patents made a difference one way or another?
Patents have nothing to do with Vonage making it or not making it in the marketplace. The marketplace is determining this.
Oh, and another judge decided today that Vonage is indeed voilating 2 of Verizon's patents and ruled that the injunction goes into place within a month. Of course, Vonage said that they had a workaround in place. One problem with that is that Vonage said in court that they didn't have a workaround in place after previously saying they did have a workaround in place. So, they either have a workaround in place or they committed perjury.
[ link to this | view in thread ]
Re:
All of them only did so AFTER Vonage was tremendously popular and demonstrated the model to make the system work and how to market it to individuals.
The answer is quite a few. Now how exactly has this hurt innovation?
Because Vonage was the first one to figure out how to bring this to customers in a major way at a reasonable price. The telcos only did that after Vonage's success. Killing them for actually figuring out how to go to market in a way people want is a travesty.
Patents have nothing to do with Vonage making it or not making it in the marketplace. The marketplace is determining this.
Exactly. So why do the telcos who couldn't innovate get to use patents to pile on to Vonage's problems?
[ link to this | view in thread ]
Re:
[ link to this | view in thread ]