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


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  1. identicon
    Willton, 26 Oct 2007 @ 7:24am

    Re: Re: TechDirt spews more nonsense

    You seem confused about what innovation is. As has been discussed at length many times before, what you described IS innovation. Invention is about creating something new. Innovation is about successfully bringing that new thing to market. Not only that, but studies have shown that it is this act of innovation (successfully bringing something to market) that is what boosts the economy. So we should be cheering on that act. Invention is a part of it, to be sure, but innovation is the key -- and Vonage was exceptionally innovative in bringing their product to market.

    Ahem. The American Heritage Dictionary definition of innovation:

    innovation (n.):
    1. The act of introducing something new.
    2. Something newly introduced.

    If VoIP has been around for as long as you say it has, how is what Vonage did "introducing something new"? Maybe YOU are the one confused as to what innovation is. Bringing something to the market is not what innovation is about. Innovation is about taking something that's old and changing it or improving it so that it is somehow new, and then introducing it to the public. Vonage missed a step. All Vonage did was bring VoIP, an old idea, to the market. Again, that's not innovation; that's successful marketing.

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