Verizon sues Vonage over patent infringement

It wouldn't be a full day here at Engadget without someone suing someone else for patent infringement, and thankfully Verizon has stepped up to the plate to provide our daily dose of entertaining legal shenanigans. The telecom giant has filed suit against VoIP provider Vonage in Richmond, Virginia's U.S. District Court, claiming that certain aspects of Vonage's Internet telephony business -- specifically its methods for interfacing between packet-switched and circuit-switched networks, billing customers, detecting fraud, and providing enhanced calling services -- violate at least seven of Verizon's closely-guarded patents. What really seems to be getting under Verizon's skin is the fact that Vonage has added 1.1 million new customers in the past 15 months -- many of whom are claimed to be "Verizon's former customers" -- by "aggressively marketing and advertising services made with Verizon's appropriated intellectual property." Vonage, of course, denies any wrongdoing, and claims in language we've heard so often before that it will "vigorously defend the lawsuit;" investors, however, don't seem to be quite as sure that Vonage is in the right here, as evidenced by the 12% tumble that the company's stock took today.

[jason3fc @ Jun 19th 2006 6:51PM]

Coming up next..Bright House Networks and Directv sue Verizon over VOD patents used in Verizon's FiosTV! (hundreds are jumping ship for FiOS here in FL daily)

In short, they are all a bunch of whiners who can't stand competition. I left Verizon for Vonage and never looked back. Verizon's voip is still too expensive.

[JCasto @ Jun 19th 2006 7:10PM]

WHAT IS WITH ALL OF THESE LAWSUITS!!!! Jason's right... they are whiners. These big companies have a huge share of the market and are making millions upon millions a year... let the smaller companies have a chance, OK?

[cbm5 @ Jun 19th 2006 8:23PM]

Well, looks like it's time to finally buy that Vonage stock. I for one think Verizon's full of it and that 12% is going to come back.

[Jim @ Jun 19th 2006 8:42PM]

Didn't Sprint sue them as well for something similar in the later part of last year?

[Chad @ Jun 19th 2006 9:12PM]

Vonage is considered a "weak" stock. They aren't expected to last much longer....

[Johnny @ Jun 19th 2006 9:22PM]

I'm more concerned with where that Verizon logo came from. Did you guys redraw it in MS Paint?!

[Jake @ Jun 19th 2006 9:26PM]

You're welcome for the tip. ;)

[Smoke_Dawg_187 @ Jun 19th 2006 9:27PM]

Verizon actually owns part of DirecTV if I'm not mistaken.

It is unfair for Verizon, especially if you use their broadband for a competitors voice. Verizon is spending billions upgrading their network for customer retention. Verizon also employs thousands of people to work on their Fiber & Copper networks, not to mention the customer service and everyone in between like contractors and the such. Verizon is a great company, and it's terrible these internet start ups chip away at their business for max profits and little return for anyone.

[Kamus @ Jun 19th 2006 9:32PM]

"It is unfair for Verizon, especially if you use their broadband for a competitors voice."

Excuse me? how the hell is this unfair?
VOIP eats no bandwidth whatsoever compared to what technology is capable of delivering these days, we don't need the telephone anymore.
It's an obsolete service, it's just taken waaay too long for the people to realize that we can actually live with out those monopolies.

It's unvelivable how clueless people are about how technology works, if you use a regular phoneservice: YOU ARE GETTING RIPPED OFF, ITS OBSOLETE!

[Mike D @ Jun 19th 2006 10:41PM]

There is no need to sympathize with Verizon. Whoever has the best product is what I will buy. If Verizon offers the best product, I will buy it. Right now it's Verizon FiOS, for instance. I recently left Verizon Wireless for Sprint, and ported a Verizon landline to Vonage. But they gained me as a FiOS subscriber, and locked me in for a 1 year contract.

They are just trying to drive Vonage out of business, they are a thorn in Verizon's side. Their stock may be weak, but they are synonymous with VoIP and an alternative way of getting phone service. Vonage offers unlimited calling for $24.95, not the cheapest, maybe not even the best quality, but it's the bar that Verizon's VoIP is going to be measured against so they have to fall in line or get passed over by customers. If it were up to Verizon they'd be charging $29.95 or $39.95 a month for as long as possible for unlimited VoIP.

[Pacey @ Jun 19th 2006 10:45PM]

Smoke Dawg,

You sound like you work for Verizon. Being an ISP doesnt protect you from competing technologies. Yeah, Verizon is dumping a load of money into their FIOS and cable, but their phone service costs more then Vonage. If you want to compete on the VOIP market, lower your prices or don't compete at all.

Granted if Vonage did violate patents, there is an issue. However, Verizon doesnt have the corner on the VOIP market and a little friendly competition will benifit consumers (hopefully) in the long run.

[ChrisXS @ Jun 19th 2006 11:52PM]

Pass me whatever you are smoking... Dawg.

[bigshynepo @ Jun 20th 2006 12:54AM]

More hilariously, Verizon is suing Vonage for, amoung other things, its method of BILLING CUSTOMERS.

Umm, how many way are there to ask for money due? Give me a break. Wow, what would America do if we went back to the day and age before lawsuits. America is going to sue itself into a big F-you. I'm from Canada, little america practically, but even things aren't this bad up here.

[John @ Jun 20th 2006 8:40AM]

"It is unfair for Verizon, especially if you use their broadband for a competitors voice."

This is comparable to your water company telling you what you can and can't do with the water once it reaches your home.

"Verizon is spending billions upgrading their network for customer retention."

They're also getting PAID billions by their current customers.

"Verizon is a great company, and it's terrible these internet start ups chip away at their business for max profits and little return for anyone."

When you say "chip away at THEIR business for max profits.." are you referring to Verizon's max profits, or to the start-ups? Because without Skype, Vonage, etc., Verizon simply would not be offering these services. As for the "little return for anyone" comment, I highly doubt that the millions of VOIP users are receiving "little returns."

[andrew @ Jun 20th 2006 9:30AM]

Verizons just upset. i'm about to get vonage because its a whole lot cheaper. if verizon would lower there prices i would have no reason to leave.

[Tom @ Jun 20th 2006 10:11AM]

Verizon's VOIP is actually 4 cents cheaper than Vonage.

$24.99 vs $24.95

There may be some difference in features, but if you're talking price, they're the same.

[George Williams @ Jun 20th 2006 12:03PM]

"Verizon is a great company, and it's terrible these internet start ups chip away at their business for max profits and little return for anyone."

If Verizon is such a great company how come they have started limiting the bandwidth on my DSL connection now that FIOS is available in my area? I'm only allowed about half the bandwidth I was getting 4 months ago.

[Radjammin @ Jun 20th 2006 2:51PM]

[QUOTE] Verizon's VOIP is actually 4 cents cheaper than Vonage.

$24.99 vs $24.95

Posted at 10:11AM on Jun 20th 2006 by Tom [ ! ]
[/Quote]

Back here on Earth take that $24.99 and add $15.00 for any thing under the sun they would like to call it. "special usage fees", "State Upkeep dues", or my favorite "We can call it whatever the hell this week, as we own your phone line, you dummy"

As far as I am concerned they can build themselves a FIOS hut and stream themselves into outerspace. If they price point it too high I could care less how many telephone poles they can put up in an hour.

[B @ Mar 9th 2007 4:12PM]

Good, maybe we'll stop hearing that stupid vonage song in commercials. My mute button is getting worn out.

[k @ Mar 9th 2007 5:34PM]

12% drop !!! wo ho hoo hooo hoo .. wo ho hoo hoo hoo ..
$58 million !!!!!!! wo ho hoo hooo hoo .. wo ho hoo hoo hoo ..

[Jim @ Mar 25th 2007 1:52PM]

Does anyone know the patent numbers or the details contained in these patents? It would be nice to know what the patents claim to see how hard it would be for vonage to provide a service without infringement. Also, it would be nice to know if these patents are likely to effect other VoIP proviers like skype.

[The Nerdy Duo @ Apr 6th 2007 4:08PM]

Verizon is an okay company. And really, only okay in terms of products and service. We've been Verizon customers for years, and we've been watching their service and stability slip each time they clamor for another piece of the communications/media pie. Since Fios TV came out, we've had so much trouble with them.
We only pull down 1/3 of the speed that we pay Verizon for, and for uploading we only get half. Getting a work order, forget about getting the verizon tech to complete it, has become nearly impossible, and half the verizon guys who come out think it's okay to just sit in the truck for 20 minutes and then leave without ever even ringing the doorbell. Phone support offers as much support as a training bra - most of it's imaginary. And they constantly lie about the condition of the connection from their hub to our house (They've done it at least twice, reporting everything to be "all good from our network to your house" while I'm standing outside my house with a tech watching the meter report some things that are clearly not fine.)

And if Vonage is using their patented billing system, well, they might as well drop it, because Verizon has wrongfully turned off our Fios TV, claiming (imaginary) non-payment. And it took them more than 2 weeks to a) tell us what the problem was (it was a whole week and a rude tech at the house before they even mentioned the billing department)and b) correct the problem at the biling department where *they* made the mistake. Do you know what they gave us for all that time and unhelp? a 35 dollar credit. And from what we hear around here, we aren't the only ones who that's happened to.

If Verizon wasn't constantly trying to pick up all of the pieces of the bandwidth monopoly, they wouldn't be so overstretched, they would be able to maintain their products and services at a reasonable level of quality, and they would have a core group of loyal customers who would stand by them, sort of the inverse of their wireless commercials.

Imagine what it would be like if Verizon put the money they're spending to pick on Vonage into bringing older parts of their network up to date. That would be a beautiful world.

[Christie @ Oct 26th 2007 11:26PM]

I agree with CBM5. It's time to buy Vonage stock!

[William Dunlap @ Feb 5th 2008 1:02AM]

Scordia Vs. Vonage

Vonage has failed to credit payments and taxes for billing invoices and reported inaccurate invoices on customers billing invoice statements after customer tried to have her billing corrected.

Mrs. Scordia will recover illegal billing, attorney costs, and damages due to mistakes on their billing, and fraud.

Sincerely,

Maria Scordia