Vonage Settles AT&T Patent Suit; Anyone Else Want To Squeeze Free Money Out Of Vonage?

from the just-find-a-voip-patent-and-sue dept

The various patent lawsuits against Vonage have been a perfect example of almost everything that's wrong with the patent system. Vonage was the clear leader in this space -- being the first to successfully get this type of product to a widespread audience, even as the idea had been talked for years. Vonage's success had nothing to do with its technology acumen. The concepts behind VoIP services were widely known and widely discussed. The problem facing the space had always been an inability by any company to package it up in a way that people would buy it. Vonage figured that out. And for it, it got sued into oblivion by all the companies who were unable or unwilling to figure out. Just the fact that there were so many patents covering the basic concepts of "VoIP" (even when there was so much prior art) should have been a warning sign that perhaps most of those patents were bogus. However, once Vonage's investors started pressuring Vonage to just settle the cases, things only got worse. Vonage settled with Verizon and Sprint and even with some small patent holder very few people had heard of. With Vonage quickly trying to settle any such lawsuit, you can bet that plenty of companies went hunting through their patent portfolios, looking to see if they had anything related to VoIP which they could use to sue Vonage over. AT&T quickly found something and sued Vonage, knowing the company would quickly cough up some money. And, cough it up, it did. Vonage has agreed to pay AT&T $39 million. Anyone else have a VoIP patent? Might as well sue while Vonage's wallet is wide open...

Filed Under: patent thicket, patents, voip
Companies: at&t, sprint, verizon, vonage

NTP's Latest Patent Shakedown Must Wait For USPTO; Why Wasn't RIM Given The Same Consideration?

from the innovation-at-work dept

Even if you just have a passing interest in the topic of patents, you've probably heard of the RIM-NTP case. That's where NTP, a company that ended up with some excessively broad and obvious patents after the inventor was unable to build a product anyone actually wanted to buy, sued RIM, the makers of the wildly successful Blackberry device, claiming patent infringement. The attention the case got caused the US Patent Office to look closely at the patents, and very publicly state that it was rejecting NTP's patents, as they never should have been issued in the first place. However, rather than waiting for the official patent review process to work itself out, the judge in the case pressured the two sides to settle, forcing RIM to cough up $612.5 million for no good reason. It never made sense that the judge refused to wait for the Patent Office to finish its review -- especially since the office had been so public in questioning the validity of the patents.

NTP took its winnings and immediately started looking for others to sue while the patents were still valid. It started with Palm, makers of the Treo. However, in that case, the judge realized what was going on and put the case on hold until the USPTO could make a final decision on the validity of the patents. Not willing to standstill, NTP sued all the national US mobile operators (Sprint, Verizon Wireless, AT&T and T-Mobile) for selling devices like the Blackberry and the Treo. Once again, though, it looks as though a judge realizes that it's ridiculous for such a case to go forward when the USPTO has expressed so much skepticism towards the patents. Against Monopoly lets us know that the judge for the Sprint, Verizon and AT&T case has also put the case on hold until the USPTO is done. What no one wants to explain, however, is why RIM wasn't afforded the same opportunity?

Filed Under: patents, uspto
Companies: at&t, ntp, palm, rim, sprint, verizon

We Knew FiOS Was Fast, But Why Is It Always Setting People's Homes On Fire?

from the maybe-slow-down-on-the-installs? dept

We've had a few stories now about Verizon FiOS (its fiber optic broadband offering) installs that resulted in fires and damaged properties. While Verizon's PR folks have focused an awful lot of effort on convincing reporters that where there's smoke there isn't necessarily fire, perhaps the company should put a few more resources towards both preventing fires and fixing things up for those whose property was destroyed by install-related fires. Broadband Reports points us to yet another FiOS-related fire (which the reporter at Network World is now calling FiOS: Fire is Our Speciality), where Verizon promised to help the family impacted by paying for their living expenses and reimbursing them for destroyed property. The only problem? That bill came to $58,000, and Verizon only wants to pay $1,800 of it. The family has now decided to take the matter to court. You would think, given the negative publicity over the previous fires, that Verizon would know to pay up and apologize, rather than try to stiff the folks whose house they set on fire.

Filed Under: fios, fire, installation
Companies: verizon

Vonage Settles Verizon Patent Dispute; Next Up: AT&T

from the cheaper-to-settle-than-to-fight dept

Just a couple weeks ago, we noted that Vonage appeared to be settling all its patent disputes -- with the one exception being Verizon. Well, you can cross that one off the list as well, as Vonage is paying $120 million to Verizon to settle its patent dispute. This is something of a joke. There's been plenty of prior art discovered on Verizon's patents -- and it was quite clear that Vonage didn't take this idea from Verizon at all. In fact, Vonage had been the innovator. The first company that was able to take all of these ideas and package them up in a way that customers actually wanted. Verizon, on the other hand, came to market well after Vonage was already gobbling up marketshare and did a terrible job marketing its product, which failed to generate much interest. So, after losing in the marketplace, Verizon simply sued the company that did a better job. That's not the sort of activity the patent system is designed to encourage. However, Vonage so far had trouble proving its case in court, and it's become clear that Vonage's investors wanted the lawsuits off the decks (perhaps to facilitate a sale), so Vonage is settling as fast as it can. In fact, as soon as news broke that this lawsuit was settled, the stock popped -- so you could say that investors are helping to pay the settlement. Of course, when you're just handing out money for bad patents like that, it should come as little surprise that others are rushing to join the party. Witness AT&T's decision to sue Vonage for patent infringement just last week. Anyone else have a vague, overly broad and obvious patent on VoIP that can be used to squeeze some free money out of Vonage? Now's the time...

Filed Under: patents
Companies: at&t, verizon, vonage

Verizon Fined For Pretending That Limited Service Was Unlimited

from the watch-out-comcast... dept

Back in 2005, we noted that Verizon Wireless was following the tactics of others in advertising "unlimited" wireless broadband services, while the truth was they were quite limited. As people later worked out, despite the claim of "unlimited," VZW was cutting off anyone who used more than 5 gigs of data per month. That's pretty limited, actually. When confronted about this, the company tried to argue that by "unlimited" it really meant "It's unlimited amounts of data for certain types of data." And they followed it up with this gem: "It's very clear in all the legal materials we put out." Right, see, that's the legal materials -- the stuff you know no one reads. Yet in the marketing materials it's quite clear that you're claiming "unlimited" and that has a pretty clear meaning. After many such complaints, Verizon Wireless finally started to back down from the false claim of "unlimited" earlier this year. Turns out that it wasn't because of any realization that lying to your customers is a bad idea, but because NY State was investigating the practice. NY has now fined Verizon Wirelss $1 million to be given out to customers who had their service unfairly terminated for actually believing that "unlimited" meant "unlimited." Of course, Comcast might want to start paying attention right about now. While lawyers everywhere are rushing to file lawsuits over its decision to jam broadband user accounts, before that happened Comcast was famous for many, many years for being one of the biggest ISPs to lie about offering unlimited service. It's a story that comes up in the press every year or so, and every year Comcast gives its own doublespeak about how it only cuts off the worst "abusers." However, it's still false advertising to claim unlimited service when that's not what you supply -- and it's hardly "abuse" if people are merely doing what you told them they could do.

Filed Under: fines, limited, unlimited
Companies: comcast, verizon

AT&T Joins The Party Of Jealous Telcos: Sues Vonage For Patent Infringement

from the anyone-else-want-in? dept

If you can't beat 'em, sue 'em for patent infringement. That seems to be the lesson that various telcos have learned in dealing with Vonage. Having seen Verizon and Sprint win big awards for patent infringement against Vonage, AT&T has now sued the company for patent infringement as well. The story, once again, is exactly the same. AT&T tried, and failed, to compete with Vonage in the marketplace. So now that they've lost, they've sued. It has nothing to do with Vonage "stealing" any technology. The technology behind VoIP is fairly straightforward. Perhaps that's why it seems like everyone claims to have VoIP patents. At this point, it's just ridiculous piling on against the first company that actually figured out how to market a VoIP telephone replacement service by a bunch of telcos who refused to innovate.

Filed Under: patents, telcos, voip
Companies: at&t, sprint, verizon, vonage

Vonage Continues To Settle Patent Disputes... With Everyone But Verizon

from the that-one-is-personal dept

Just a few days after settling with Sprint over a patent dispute, Vonage has also settled a patent dispute with a small company called Klausner Technologies. It looks like Vonage is really trying to clear the decks of these pesky patent lawsuits -- which still seem rather petty and against the purpose of the patent system. However, it doesn't look like Vonage is anywhere close to settling in its other big patent lawsuit battle. Instead, it's asking the courts to rehear its patent case against Verizon. This really is a shame. While Vonage has faced a variety of struggles on the business front, it was the company that was able to bring VoIP to the consumer market in a way that no other company was willing to do. It's unfortunate that rather than being able to take the service and the company to the next level, it now has to spend so much time and money battling over patents. The technology behind VoIP was nothing special. People had talked about if for ages. What held back VoIP was having the bandwidth to support it and a convincing marketing campaign that showed how easy it was to switch to VoIP while making it seamless with an existing phone system. Vonage was the ones to innovate here -- and now they need to pay up over a bunch of bogus patents.

Filed Under: patents, settlement, voip
Companies: klausner, sprint, verizon, vonage

Vonage Settles With Sprint... Prelude To A Sale?

from the maybe-possibly dept

Just a couple weeks after losing yet another patent lawsuit, Vonage has decided to settle its patent lawsuit with Sprint, agreeing to pay $80 million, covering both past and future licensing costs. The company is still fighting over Verizon's questionable patents. Again, it seems pretty silly that the company that actually figured out how to bring phone-based VoIP to the market in a way that people wanted now has to pay the incumbents who were unable (or unwilling) to do so. Of course, there's also been lots of talk that these patent lawsuits were really an attempt by the telcos to crush Vonage to the point where it was an easy buyout target. Thus, settling with Sprint, could open up the possibility of a Sprint purchase... but it probably would have just made more sense to do the buyout first before "settling," as the news of the settlement has sent Vonage's stock soaring. Based on that, don't be too surprised if Vonage reaches a bit deeper into its dwindling cash reserves to to pay off Verizon as well -- the resulting stock bump could effectively pay for the licensing fees. All in all, though, it does highlight how silly the patent system has become. The uncertainty over the suits hurts a company's stock and pushes companies to settle, even if they shouldn't. That's exactly what happened with RIM and NTP, and it looks like what happened here.

Filed Under: patents
Companies: sprint, verizon, vonage

Exploiting Telco Regulations For Free Calls And For Profit (Lots And Lots Of Profit)

from the so-easy,-it's-almost-criminal... dept

Earlier this year, we wrote about how suddenly a bunch of "free" calling services were popping up that all seemed to use phone numbers in Iowa. This included a service that would let you call an Iowa number and from there call anywhere in the world for free as well as a variety of "free conference calling" services. All of these systems were actually exploiting some legacy telco regulations, that were officially designed to help rural telcos get extra money to build out more rural service. Basically, the government allowed rural telcos to charge high termination fees to other telcos when calls from their lines terminated on one of the rural telco's lines. So, if you had AT&T and called your cousin in Iowa who had some small rural telco, AT&T would actually have to pay that telco some charge per minute, with the idea being that the telcos would use that money to invest in infrastructure. Of course, the infrastructure they invested in wasn't exactly building more lines to wire up others in the town, but in VoIP systems so they could reroute calls in to anywhere else, and then team up with various online sites to get as many calls as possible routed through those systems. Then they could just sit back and collect the millions of dollars rolling in from telcos. Broadband Reports points us to an article at the Wall Street Journal going into more details about how this happened -- and how the FCC is now scrambling a bit to see if there's a way they can stop it. In the meantime, the WSJ piece notes that while the telcos have been told by the FCC that they have to keep connecting these calls, they've simply stopped paying any of the termination fees as they await the results of the various lawsuits. Of course, all that's done for now is made the various free conference call services switch to other rural telcos in other states. Eventually, though, they'll run out of other states to go to (or the regulators will finally realize how their regulations are being exploited) and the little regulatory exploit will go away.

Filed Under: arbitrage, free conference calls, iowa, telcos, termination fees
Companies: at&t, fcc, freeconference.com, qwest, sprint, verizon

And The Hits Keep On Coming For Vonage: Loses Another Patent Decision

from the ouch dept

Vonage is not having a very good week. Just after a jury sided with Sprint over Vonage in a patent dispute, the appeals court has affirmed the injunction against Vonage from the similar Verizon patent case that was decided earlier this year. The only small victory for Vonage is that the appeals court sent back the ruling on one of the three patents in question. Vonage is claiming that the ruling barely matters, since it's already developed a workaround for the other two patents. Of course, that's what they say -- not what Verizon or the courts have said. And, it still seems likely that Vonage is going to need to pay out quite a bit in terms of damages for the patents the court affirmed. Again, the point still stands from yesterday. Despite the court's rulings, these patents are highly questionable, with a tremendous amount of prior art. Even if you take as a given that the patents are valid, they had nothing to do with Vonage's success -- which was based on figuring out the right marketing and business models to attract users, not on the same technology that was obvious to everyone in the space. The telcos who are now suing Vonage couldn't (or didn't want to) figure out this model in order to protect their legacy voice business. To now force Vonage to pay those companies when it was the one who actually innovated shows the travesty of the current patent system.

Filed Under: cafc, patents
Companies: verizon, vonage