Vonage: no workaround, we're pretty much screwed

Things just went from "really bad" to "oh man that sucks" for Vonage. The VoIP provider is requesting a permanent stay on Judge Claude Hilton's decision in the Verizon patent suit, which decrees that Vonage can't sign up any new customers until it figures out a way to provide them service that doesn't infringe upon Verizon's patents. Vonage had already been granted a temporary stay, saying that they'd drum up a workaround, but this new request is much more pessimistic, saying that because Verizon's patents are so broad, such technology would take months to develop, "if even feasible." The unlucky company is making a bit of a pity play as well, saying that even if it "was somehow able to implement a design around, and was able to ultimately prevail on appeal, it would have no hope of regaining its lost customers, or its lost goodwill, and its loss of revenue would be permanent and..." Oddly, the statement cuts out there, because the rest of it was redacted as "confidential material." The whole Vonage statement is in fact riddled with such holes, making it hard to figure out exactly what's going on -- other than the fact that Vonage doesn't like its chances of building a workaround. No mention of that VoIP Inc. safety net either, but perhaps Vonage still thinks it has a shot at doing this the old fashioned way.

[Via GigaOM]

Update: Tier 1 research analyst Daniel Berninger points out that it's actually possible that Verizon's patents may be illegitimate. Apparently the two patents in question, 6,104,711 (filed March 6, 1997) and 6,282,574 (filed February 24, 2000) may themselves use technology openly discussed and published by VocalTec back in 1996. In fact, it may also indirectly include technology input from the likes of IBM, Microsoft, Intel, Nortel, etc. made during the VoIP Forum in 1996, with the businesses' original intentions that this tech be used in future open standards. Can anything be proved here that would give Vonage a get out of jail free card? Well, we're certainly not lawyers (we'll defer to the legally-inclined in our audience), but already this patent he-said she-said is smacking a bit of RIM and NTP's fracas, and we all know how ugly that wound up being for the BlackBerry maker.

[John Doe @ Apr 16th 2007 8:42PM]

++ Amen.

[Rob @ Apr 16th 2007 7:33PM]

Well,.. if you have any of their stock you better get out now. I mean,.. it never was a great stock to have, but now all bets are off.

[Mike @ Apr 16th 2007 7:47PM]

Does anyone know what exactly they infringed on and why there are so many other voip providers out there that seem to have a non-infringing solution?

[Juaquin @ Apr 16th 2007 7:57PM]

That bites. There really needs to be some legislation passed about broad patents.

I bet 50 years ago I could have put in a patent for an "Electronic interface device based on buttons" and gotten it approved, and now I could be suing the crap out of Logitech, MS, and anyone else who makes a keyboard.

It's BS.

[Kalle @ Apr 16th 2007 9:10PM]

You could have done that... although patents are only good for 17 years from granting, or 20 years from the time of filing.

[barry @ Apr 16th 2007 8:04PM]

Patent the keyboard? That's nothing. Someone managed to score a patent for a little data structure called the linked list.
http://www.google.com/patents?vid=USPAT7028023&id=Szh4AAAAEBAJ&dq=linked+list+Ming-Jen+Wang

[chuck @ Apr 16th 2007 8:11PM]

@Barry:

As we are not yet in receipt of your royalty payment for the above use of a hyperlink, we shall be forced to pursue this matter in court.

Cordially,

The Man

[B @ Apr 16th 2007 8:09PM]

Just wondering, but isn't digital phone from Comcast/Cox the same as what Vonage offers?

[Anthony @ Apr 16th 2007 8:13PM]

Verizon is simply jealous of Vonage's success and this whole patent suite is its lame effort to hinder, if not destroy that success. Ultimately, Verizon will never be able to provide the same great service as Vonage and at the same price. So, why not file a patent suite?

Of course, that's all opinionated but still. Isn't it the truth?

[MikeC @ Apr 16th 2007 9:43PM]

Wow, I never thought Vonage had great service... thats funny. Little to no voice quality even with the best internet connection possiable. They are just thinning out the weak.

[Jaws @ Apr 16th 2007 8:19PM]

If Verizon's patents are so broad, why have the other VoIP providers such as ATT Call Vantage, SIP protocol VoIP (Like Gizmo), and like affected? Vonage has been the consumer face of the VoIP industry for years, and this seems like a way to shut down competition in an attempt to preserve their monopoly without having to bring themselves into the modern age.

[Frankfurter @ Apr 16th 2007 8:28PM]

I say good riddance, Vonage. I had the service for a few months, between the dropouts and getting tech support from somewhere in the middle east by someone who could barely articulate the English language, Vonage is just grasping for some reason why they're losing customers.

Maybe less money on commercials and more money on teaching your CSR's English.

[Joe Laydon @ Apr 16th 2007 8:48PM]

I have bene a Vonage Customer for almost 4 years and have loved it. Ironic I left Verizon because it was so expensive. I hope they find a way around this, I dread the thought of recieving an email saying servie will be shut off because of a broad patent that prevents Vonage from scratching their butt.

[Mr.Ortiz @ Apr 16th 2007 8:47PM]

Me barely articulate the English language? That's unpossible!

[Eric Pham @ Apr 16th 2007 8:52PM]

These patent lawsuits are just getting out of hand. I assume the patent was for talking over the internet with a picture of verizon raping people. I still have verizon because i cant get rid of them and they are awful. Their coverage area is great but theyre way too expensive and they treat their customers like garbage.

[Smoke_Dawg_187 @ Apr 17th 2007 12:04AM]

I'm all for Verizon in this. It's totally unfair for companies like Vonage, which invest nothing in broadband lines, invest nothing like Verizon did to build their copper network. Vonage is just a parasite.

[CT @ Apr 16th 2007 10:13PM]

If Vonage is a parasite then so is every other service on the interent that doesn't own the lines. That is a ridiculous statement. And I shun you for protecting a company who will soon ruin net neutrality.

[Chris @ Apr 16th 2007 9:26PM]

I suspect the work around they speak of requires new ATA's. The line 'it would take months to develop' really means it will take us months to have 2 million ATA's shipped out and service swapped to them...surely even if you could get 2 million units shipped in a few weeks, which wont happen, the logistics of swapping service to them would be overwhelming, it would have to be a phased swap out....over several months if not over a year or so....decisions....decisions.....

[Ian Jardine @ Apr 16th 2007 9:27PM]

I stand ready to be corrected, but this is my current understanding.

Vonage use their own hardware/software for Gatweways betweeen VoIP calls and the Copper Gateway to reach a POTS telephone. Verizon's patent, which was infringed, is in this Gateway area.
Vonage seems to have thought that it was less expensive/more reliable to have their own Gateways and considered their Gateways did not infringe upon anyone elses patents. The Court disagreed and the Judge not only applied a penalty + Fwd usage fee structure, but also ordered a virtual cease and desist order. This last order is now in suspension while Vonage consider their appeal.

Other VoIP companies have gone another route. They use firms like L3 to provide services and such Gateways. Presumable L3 and like firms already license the correct patents or have unique legal patents and hardware/software.

Thus Vonage's problems may not be industry specific. Though it's possible other infringement of patents exist, by companies which have followed Vonage's business execution route.

[DudeAsInCool @ Apr 17th 2007 2:21AM]

Screw this Judge. Since when did he become a technology expert?

[WhoDatNinja @ Apr 16th 2007 9:37PM]

This sucks. I'm a happy Vonage customer and went with VoIP not only cuz of the cheap rates, but the local telco eats shit. I'm gonna be forced to have just a cell phone and now my mom will be calling that instead of my VoIP buffer :(

[myscrnnm @ Apr 16th 2007 9:47PM]

Nice. I hate Vonage anyway, their commercials are so annoying. Not to mention Verizon is my ISP, lol.

[bob @ Oct 4th 2007 6:53PM]

VONAGE is an unscrupulous company and I refuse to do business Vonage. Vonage refuses to cancel my account after approximately two weeks of repeatedly trying to cancel my Vonage account by telephone and email. To end the phone conversation Vonage has repeatedly said Vonage computers are down and to call back.

I filed a complaint against Vonage with the Better Business Bureau (complaint number: 5576109) 3 Oct 07.

I filed a complaint against Vonage with the Federal Communications Commission (complaint number: FORM475: 07-W13431095) 4 Oct 07.

I filed a complaint against Vonage with Florida Congressman Jeff Miller 4 Oct 07..

I filed a complaint against Vonage with Florida Senator Bill Nelson 4 Oct 07..

I filed a complaint against Vonage with Florida Senator Mel Martinez 4 Oct 07..

I am pursuing legal action against Vonage.

For further evidence of Vonage’s behavior and what kind of reputation Vonage has developed go to http://www.wehatevonage.com/, http://www.consumercompare.org/review.php?provider=vonage, and/or search the Internet for “I HATE VONAGE”.

[RAUL @ Jan 28th 2008 3:49PM]

Is there any legal way to stop this company from making false advertisment? and also how can they get away with a lot of illegal stuff? they charge a fee out of my checking account without my athorization.

[Smoke_Dawg_187 @ Apr 16th 2007 11:14PM]

I shun you for being such a shill. You don't think companies like Verizon spend billions upgrading and maintaining their networks? Think of all the thousands of people that work for Verizon and their families. Of course Vonage is a parasite. But then again you're the kind of person that's probably happy to see tech jobs shipped off to China and India, just so you can save $5 a month on phone service. You douche! You have no idea. Go back to pirating your movies and music you loser!

[Smoke_Dawg_187 @ Apr 16th 2007 11:14PM]

I shun you for being such a shill. You don't think companies like Verizon spend billions upgrading and maintaining their networks? Think of all the thousands of people that work for Verizon and their families. Of course Vonage is a parasite. But then again you're the kind of person that's probably happy to see tech jobs shipped off to China and India, just so you can save $5 a month on phone service. You douche! You have no idea. Go back to pirating your movies and music you loser!

[Rick @ Apr 16th 2007 10:15PM]

Well here is my two cents on this matter.I will tell you a story of a company known as Southern Bell once owned by Western Electric they made an attempt,to make friends with a company called AT&T.We watched them become fast friends and to level anyone who stood in front of them.I watched this unfold as a child of a Southern Bell in or about 1984 the Goverment said no way.They where told you are a monopoly thus broke them apart did this hurt them hell no,they have held on to the gravy train year's after the made them break up,people hate to tell you the patent's they own would knock your sock's off.I will tell you this the merger of the two of them is not something we did not see coming,as far as this pissing contest goes guess what those line's they use are at the mercy of big bad bell,if they get pissed they can and have jerked those write's away they being Ma Bell have an end user write to 3015,that say's at said diss AT&T can term line usage.I know this to be fact they will never tell you this,as far as Verizon goes they know if Bell wants them they could wreck them,and one more thing bell owns stock in said company.I have stated before ma bell has you by the calls.I will close but for you all out there check online type in phone company in your search bar and find something and also check with Consumer Reports,they have a non biased report on VOIP there is more than one choice out there look folks,and if you want something fight for it,we have a voice scream let them know what you want the wheel who squeeks gets oiled.

[dozx @ Apr 16th 2007 10:35PM]

@Rick

Don't forget Verizon was a Bell company. In fact Verizon is made of 2 of the most powerful bells, being Bell Atlantic & NYNEX, and more recently adding GTE & MCI. Those 4 companies are what Verizon is. Verizon is very powerful I dare say, more than AT&T. Remember AT&T is not the company it use to be, as matter of fact, it isn't close to its former self. Legaly the company to watch out for is Verizon.

[CT @ Apr 16th 2007 11:28PM]

Yea, I am sorry. You are right, only the people that built the network should use it. And then I will only buy things in 'Murca because the almight George Bush tells me so.

You really do not understand global economy either do you? I may be a douche, but if you are only qualified to do tech support build iPods then you deserve to lose your job. Read a book, go to college, because then people will pay you $150 an hour to do a job they actually need done in person. We are not losing tech jobs we are evolving that is how democracy works. But your republican redneck ass is too busy stopping immigrants to realize that.

Last, Smoke_Dawg_187? Really? Who are you kidding/killing? Maybe one day you will see the ghetto or an ocean for that much, and tehn you can call yourself hardcore. You are probably from hick ass Kansas with your "boy" Trevor, who you "shouln't mess with never." Your a mayonaise loving cousin humper, go drink some PBR and fly your confederate flag...

[Luke @ May 13th 2007 4:54PM]

Ok, I, as a consumer, will.

[daryl @ May 8th 2007 1:24PM]

Verizon choosing to go after Vonage does not mean other VOIP providers do not infringe on these patents. It means that Verizon choose to first attack the weakest link to set a precedent. It's just smarter to first attack a company in financial trouble than to take on the deep pockets of AT&T or Comcast.

[Smoke_Dawg_187 @ Apr 16th 2007 11:45PM]

Far from it. I actually live in beautiful San Diego, California. It's quite interesting you think people "deserve to lose" their jobs if they're not college educated like you. What a compassinate liberal. As far as my handle goes... you're the one suggesting to read a book, yet you'll judge one by it cover. My point made exactly. Things are a lot deeper than you think. Verizon is spending billions upgrading it's networks. Do you know what a T1 costs? $200 - $300 a month for a 1.5mb connection. Verizon gives the consumer 15mbs for $50! If we are evolving, then why are you against businesses like Verizon from trying to make additional income from giving paying customers priority in handling network traffic?

What's the incentive then if we are evolving as a society where there is no capitalizing on investments. Doesn't make much sense to go to college with that idea. What if the government stepped in and said your job should only pay $15 an hour instead of $150?

[phigmeta @ Apr 17th 2007 1:01PM]

Wow CT .... such caring and loving for your fellow man.

Its punks like you that make highly educated people look bad.

BTW ... You actually very wrong about "how Democracy works" the truth is that democracy cannot evolve in the face of a hihgly controled peoples of china. evolution requires that all constants remain equal. Sadly China/Indian Economies are what are refered to as "false markets" due to the level of govermental control.

But hell what do I know ... my Masters in International Affairs (MIA) was my second masters ....

[moeed @ Apr 16th 2007 11:43PM]

Google, do I hear $2 Billion?

[Scott Boutwell @ Apr 16th 2007 11:43PM]

Well Personally I'm not sorry to hear that Vonage is going away for STEALING technology. I'm a REP for a Digital Phone service named ACN (http://boutwell.acnrep.com)REP ID: 01290572 I don't think we all should be sorry one bit for a company that can't be in business with out ripping someone else off to do it.

There are alot of OTHER VoIP companies out there and the don't steal code, ideas and don't screw with their customers.

[CT @ Apr 17th 2007 12:05AM]

Two words: Net and Neutrality. Verizon is against it. They own the net and you will be their slave.

Also, your 15Mb line is handicapped. What is the upload on your glorious 10x improvement? Yea, you will find out you can't use it for business and the 15Mb number isn't guaranteed.

Government doesnt dictate salary your dollar does and the world's need. Go fight your oil war with your movie star governer.

[FlyingFish @ Apr 17th 2007 12:41AM]

@Smoke_Dawg:

Your argument is a red herring, but I'll play along. I pay for bandwidth from a provider (Verizon, Qwest, Comcast, etc.) and what I do with that bandwidth is my business, whether it be by using a VOIP provider or not. But your argument and my response really have nothing to do with what's going on.

[GenNove @ Apr 16th 2007 11:58PM]

Smoke Dawg i agree with you 100%. Excellent point

[Smoke_Dawg_187 @ Apr 17th 2007 12:07AM]

@ GenNove, Thank you.

[Josh @ Apr 17th 2007 12:17AM]

Smoke_Dawg - You don't quite understand how networking on the net works. Vonage purchases bandwidth wholesale from many companies. These companies that they purchase from include Sprint, Level3, Global Crossing, ATT, Savvis, and UUNET (MCI/Verizon Business). This is all from publicly available routing table information. In turn, end-user ISPs such as Verizon DSL, Comcast, Charter, SBC/ATT purchase bandwidth from the wholesale carriers as well. Verizon DSL either purchases bandwidth or swaps bandwidth (peering with similar sized ISPs who send the same amount of traffic) from the wholesale providers. For instance, in addition to MCI/Verizon wholesale bandwidth, Verizon DSL uses Cogent, AOL, BTN, and Abovenet among others. Whether a user is an end-user (paying an ISP for home access) or a website or web service (such as Vonage, Google, Yahoo, Digg), everyone pays for bandwidth. The only people "free-riding" are ones using P2P, but then again, each user on the 2 ends of a P2P transfer both pay for their access.

[Pabblo @ Apr 17th 2007 12:22AM]

I don't buy the notion that Telco carriers are being attacked by a parasitic force such as a VOIP provider. You pay the local telco/cable company monthly for the internet connection on their lines. You pay them for an internet connection..done deal. What ever you want to do on that connection with its 65K+ tcp/ip ports is your business/privilege (as long as you don't share music:)). If you want to use some ip ports to make VOIP calls, and there is a company willing to give you VOIP service on said ports, then you have a deal. There's no parasitic action on the telco/cable provider there. Except, in the telco's eyes, if they are not the VOIP provider. But that could be due to other market forces, like price. It's your internet pipe, you pay for the ports and you pay for the infrastructure. You just pay someone else for VOIP.

If they did infringe on real patents, agreements and royalties with penalties could do. Like the RIM case. But Verizon doesn't want that, they want death to Vonage. Partly because they can, and partly because they want the customers.

[BHSPitMonkey @ Apr 17th 2007 12:23AM]

Well, people do stupid things... like infringe on patent laws :)

In all seriousness, though, I think something needs to be done about overgeneralized patent cases nowadays. It's getting more and more common to pursue matters that don't reflect the original purpose of patents.

[Smoke_Dawg_187 @ Apr 17th 2007 12:25AM]

Verizon's upload is 2mb. That's much faster than most people can download. My friend in Riverside County gets those speeds anytime of the day. I wish AT&T would go fiber to the prem instead of fiber to nodes. And yes, my friend has a home based business and uses it for that. Although he's not allowed to use it as a server because of the EULA.

You're lucky government doesn't dictate your salary, but you want the government to dictate business which pays people's salary.... hmm.. kind of contradicting. Obviously broadband is something people want, even need.


I guess you see no problem in copying movies or music either because they are also a "greedy faceless corporation". That's the problem. They are not faceless. There are thousands of people that work incredibly hard for something you simply take for granted, so that they can provide for their family. I don't want people to lose their jobs. I don't want to see companies stop investing money in new products and services. You never answered my question if that $150 an hour job turned to $15 an hour job? I bet your level of work would dramatically drop.

Verizon does not own the net. They certainly handle extreme amounts of traffic. Perhaps if Vonage payed Verizon to handle their network traffic, there would not have been so many unsatisfied customers with their product.

[Pabblo @ Apr 17th 2007 12:35AM]

Vonage doesn't need to pay for the traffic, it's already paid for in the end user agreement with the telco. You pay for all your traffic to be routed to it's destination, no port filtering. You pay Verizon monthly for this internet connection so they better deliver. What's next, charges for port 25 and 110 traffic (email), should yahoo pay for it's IM traffic? What about MSN? Do we have to pay for webcam streaming? NO. That's net neutrality..freedom to do what you like with the ports you paid for.

[Sanstrom @ Apr 17th 2007 12:40AM]

While I can feel your compasion for people not losing their jobs because good ol' Verizon is so kind hearted and all... But.. I wonder why Verizon is getting rid of its copper plant. Hmm lets see .. so they can FIRE copper plant techs. You are so loyal to a HUGE corp? It's obvious you work for them or you are an idiot. I work for a telephone company as well but I don't have any illusions about what they are. If they can save money and pad the earnings they will FIRE YOU. And saying "a t1 costs 150"...WHy is that? It's OLD tech and the equipment that transports a t1 is CHEAP nowdays. It's only 150 because the LEC makes it cost that much and most of the time WAY more than that. So when you come out from under your cloud of illusions please realize Verizon is nothing more than a business that doesn't care about you so why do you care so much?

[Josh @ Apr 17th 2007 12:33AM]

Vonage does pay (oh, and it's spelled paid, not payed) Verizon for bandwidth.

Your mention of T1 prices mean nothing... Do you know what the cost for a 1 Gbps link from most providers costs? It costs around $10-15/Mbps when you're buying many Gbps like Vonage does. The difference between commercial internet (Fiber or Copper T Lines) and consumer internet is that you have no guarantee of service uptime on home, while business does. Business is also dedicated bandwidth, allowing users to use everything that they paid for, 24/7 without penalty. If you try using 15Mbps down and 2Mbps up 24/7 on Verizon FiOS (using the speeds you listed), you'll quickly see that you will not be able to achieve that sustained speed.

[Sanstrom @ Apr 17th 2007 12:50AM]

It's obvious that he wants Verizon to be a monopoly.. Can't wait till it all comes back together. What the LECS want is to charge 2x for the same thing. What other business can do that? Well google is building their own network so when the lecs come knocking.. they will say f off and oh yea f off. And I will smile because the LECS already have enough and could stand a bit more competition. But some people don't see the folly of their ways. And I'm not a liberal or conservative so don't label me. I just don't believe that a corp (big or small) care about their employees or customers past the accounting ledger.

[Smoke_Dawg_187 @ Apr 17th 2007 12:53AM]

My taxes pay for the road, yet I'm not allowed to drive 80mph anytime I want. Just because I pay for something does not mean I OWN that or can do anything I want with it. I live in San Diego, AT&T territory, if you had read my post earlier.

Verizon is upgrading to the FiOS service because the copper plant is old tech. Verizon has hired hundreds of people to build and install fiber to the prem. I'm not living in an illusion. I fully understand and believe they will eventually fire or relocate people after much of the plant is built out, but that will be 5 to 10 years from now. These corporations care about their share holders first and employees second. If you work for a telco, why would you not want them to make a profit? How are the telco different from any other business?

I'm a firefighter so my job is always secure, but I used Vonage and it was a terrible service.

[FlyingFish @ Apr 17th 2007 1:53AM]

Another red herring. Your analogy is completely without merit on number of levels:

1.) Who said you "owned" the service? That was your misrepresentation and lack of understanding. You are confusing the definition of a product or tangible good with a service.

2.) As we're talking about a service, I'm paying for the right to use the service in the legal sense. And for that there are usually terms and conditions that are affixed to the service that states what I can and cannot do (EULA's,TOS, etc.). If the service (and let's be clear, that's exactly what your connection is, a service) states you can't do something you want to do, you decide whether to pay for that service at all.

3.) You actually own the car so technically you can do whatever you want with it. Drive it 80. Drive it 20, Drive it in the left lane on the 5 going 15. Your confusing the actual ability with the right to that ability. To bring the point back around to reality, my Terms of Service (TOS) doesn't state that I cannot use the connection with a competing vendors product, so how exactly is verizon being somehow unduly burdened? Again, I'm paying for a service that gives me a connection, and so long as I abide by by TOS, how I use my connection is up to me.

Simply put, If verizon feels that it's not being compensated enough for it's "infrastructure" as you put it without worrying about how the customers use it, then raise prices and watch what happens. Period. Vendors who attempt these practices in hopes of staving off competitors are temporary at best. They need to recognize the paradigm shift, embrace it and profit from it, not try to rework the tired telcom model all over again.

[Smoke_Dawg_187 @ Apr 17th 2007 1:03AM]

If you work for a Telco then you should understand the cost that go into maintaining their plant. Think of the people they pay in customer service to answer the install/repair call. Then the people they pay to dispatch you, the manager that manages you, the gas for your vehicle, the people they pay to fix your vehicle, the people that work in the CO's, switching, the line man to put the cable up. There are so many people involved.

I'm a county Firefighter, so of course I feel a sense of duty and obligation. I try to make a difference in my job. My father did work for a telco. I grew up worrying if we'd have a home because the Telcos usually lay off. But my dad got paid well, sure he worked 60 hours a week, but I had a great childhood. My dad did the work, the company provided him the opportunity. My father shares the same thoughts you convey Sanstorm. But why work there then?