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…

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Companies: at&t, sprint, verizon, vonage

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

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Joe says:

AT&T vs Vonage

If I would have wanted to do business with AT&T I would have called them. Oh, That’s Right …. AT&T NEVER Had a plan for VOip.

They were too afraid of VOip because it requires REAL Customer Service instead of lies and lip service. And it allows “portability that AT&T will Never Tolerate!

Go Vonage! At least it happened now while AT&T is too busy ripping off it’s new celular customers to figure out what VOip is really worth.

Anonymous Coward says:

Re: AT&T vs Vonage

Oh, That’s Right …. AT&T NEVER Had a plan for VOip.

Actually, AT&T does have a VoIP system. It’s called CallVantage and it isn’t doing very competing in the marketplace against companies like Vonage. That’s why you may have never heard of it. These days when you fail in the marketplace you go to court instead.

Anonymous Coward says:

Re: First is First

I don’t see them giving up and settle unless they saw they could not win in court, especially for the amount they settled for.

Companies often settle cases that they could have otherwise won in court if the cost of going to trial would exceed the cost of settling. That’s a situation that patent trolls often exploit to great profit.

boomhauer (profile) says:

Re: Re: First is First

yes, and that cost includes damage to your reputation due to loss in stock value etc from having long-term unsettled disputes..

lawyers are the new terrorists. none of this should be happening in a free country.

It still blows my mind that the patent system put in place to give the small inventor a fighting change against large established competitors is the same one being used for exactly the opposite today. Deep pockets abuse the system to prevent any small startups from having a chance. But it is all because the patent system allows it.

Dave Beck (profile) says:

What about the "Others"?

Now that Vonage has settled with the patent bearing telcos they should be set to take the market completely. The telco offerings are cheap (and worth every penny) but featureless. The “Other” VoIP operators haven’t settled with the patent owners and will get screwed if they make any money or any headway in market share. This leaves Vonage with the only long term product which does more than make cheap calls. Look at the feature list that comes with the basic package. They could double the price (there’s no competition) and it would still be a good deal to me.

Disclaimer- I’ve been a happy Vonage customer since Aug 2005. As an example, I use the forwarding options to ring all of my US and UK mobiles and desk phones, I answer the one I can get to.

Scott Horvath says:

Thank You Vonage.

The silver lining to this whole VoIP patent tussle is that Vonage did what others couldn’t…package a solid VoIP product for the mass market, packed full of features, for less than half the price of a typical land line service like Verizon. As Verizon, AT&T, etc starting perking up and taking notice that this small company is eating away at the profits they “could’ve” been making, they sued them. But they also started to compete and push out their own VoIP offerings at relatively comparable prices. Although Vonage has been sued to oblivion, they’ve certainly forced the market to compete. If Vonage survives this cash-carnage, all of the existing VoIP services will continue to compete and be forced to innovate.

So, thank you Vonage for doing what no one else could do…forcing cash-hungry telcos to realize that their “the customer doesn’t have a choice” business model no longer works and to make them actually have to compete. The underdog always reshapes the competitive landscape.

Chronno S. Trigger says:

Re: Thank You Vonage.

This is not a victory for anyone but the telcos. Once Vonage is gone they’ll go back to being the big dog on the block that douse nothing but sit on the porch.

Vonage wasn’t trying to rip anyone off, when was the last time you could say that about any of the telcos? When I first got vonage I was paying $14.99 a month, exactly what they advertised. That price didn’t rise until after Verizon forced the universal service fund onto them. I even got an E-Mail from Vonage explaining why that was added. The price went up again after Verizon sued.

Verizon only offers their VoIP service to those who have their FiOS. I know nothing about Sprint’s or AT&T’s, probably similar limitations.

So, taking all this into account, how will this cause anyone to compete?

_Jon (user link) says:

“Might as well sue while Vonage’s wallet is wide open…”

I don’t think their “wallet” is the only thing wide open.
They might want to see a specialist about that anal leakage.

But I agree with the above comment that Vonage has survived just about every financial / patent hit and still has funding. If they (and their investors) are willing to make that kind of ‘up front’ payment, they must see a huge potential for payoff by staying in the market. Perhaps they could spin it as ‘buying a piece of the infrastructure’.

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