Verizon Patent Lawsuit

Posts: 62 · Full Forum Member Joined: Mar 04, 2006 Posts: 62

http://www.chron.com/disp/story.mpl/ap/business/4693531.html

Looks like Vonage has been barred from signing up any new customers. I guess they are glad that they kept spending millions on their marketing campaign during this time. Rolling Eyes

I read somewhere else that the judge put tacked on a $66M appeal bond.

Posts: 16 · Vonage Forum Associate Joined: Mar 25, 2007 Posts: 16

"U.S. District Judge Claude Hilton also required Vonage to post a $66 million bond as part of his decision to grant a partial stay that bars the company from using the Verizon technology for new customers.

Roger Warin, a lawyer for Vonage, said the partial stay amounted to "cutting off oxygen and a bullet to the head" of the company."

Ouch.

Posts: 2257 · Posted: Fri Apr 06, 2007 12:07 pm Post subject:

Dbl_Tap wrote:

"U.S. District Judge Claude Hilton also required Vonage to post a $66 million bond as part of his decision to grant a partial stay that bars the company from using the Verizon technology for new customers.

Roger Warin, a lawyer for Vonage, said the partial stay amounted to "cutting off oxygen and a bullet to the head" of the company."

Ouch.

Hmm, the quote on MSNBC was a little different. On there, he was quoted as saying...

“It’s the difference of cutting off oxygen as opposed to the bullet in the head”

He was contrasting the original injunction, which would have shut Vonage completely down, with the current injunction, which "only" bars them from signing up new customers.

A bullet to the head would have been the original injunction - it would have shut Vonage down immediately and most likely permanently. Vonage would have lost nearly 100% of their total source of income immediately, and with zero income, they would have to fold very rapidly.

The current injunction is analogous with cutting off oxygen. As Vonage loses customers, they will be unable to replace them. Of course, something like this MAY cause a panic, with customers bailing left and right assuming Vonage is doomed, or they MAY be able to maintain their service long enough to implement the Voip, inc. solution and prove they are no longer infringing on Verizon patents (or prove that the patents are without merit in appeals).

This is most certainly bad news for Vonage, but rumors of their certain death are greatly exaggerated. Wink

In some ways, this could actually be good. First, Vonage would have to change their focus on keeping existing customers, which might mean they'd take some of their advertising budget and use it to add new features, and to cut their internal costs.

But, of course, the news is in balance overwhelmingly bad since they cannot get any new customers - a customer, once lost, is lost forever until they either overcome this or go out of business.

I'll be keeping my Vonage line as long as possible. After all, my only landline alternative is the Verizon monopoly around here, and I've been very unimpressed with their plans - not to mention the cost. If Vonage folds, I'll simply move to another Voip company or get a cell phone from Cingular.

Posts: 76 · Vonage Forum Senior Joined: Dec 22, 2004 Posts: 76

very ouch....

Posts: 6 · New Forum Member Joined: Dec 16, 2005 Posts: 6

Yeah, I'll be holding on to Vonage for as long a possible. There's no way I'm switching to Comcast. The funny thing is I've been waiting for FIOS to come to my area. Kind of makes me stuck between a rock and a hard place. If Vonage does get shut down, I swich to a cell phone, and wait it out for FIOS.

It's really ashame we don't have cable/high speed internet competition, but at least it's coming.

Posts: 85 · Vonage Forum Senior Joined: Jan 30, 2005 Posts: 85

I know this does no good, but I just e-mailed verizon telling them I vowed to never use their cell phone or internet service.
Can we get a letter to the judge going??? This company must be stopped.

Posts: 73 · Posted: Fri Apr 06, 2007 1:06 pm Post subject:

NateHoy wrote:

maintain their service long enough to implement the Voip, inc. solution and prove they are no longer infringing on Verizon patents

The Voip, inc. agreement was NOT the solution/work-around. Even Vonage clarified this.

To date there has been no information on the "solution/work-around" that Vonage claims to have.

The solution is going to be for Vonage to be bled long enough for Verizon to swoop in an eat them up.

This whole situation needs to be rethought. And this is a huge warning shot across the bow of the rest of the Voip providers.

UPDATE: Supporting link: Vonage hangs up on Verizon patent infringement with new agreement

Read the update at the end:

Quote:

After the story ran, Ars was contacted by a Vonage spokesperson that claimed that the agreement with Voip, Inc. has "nothing to do with the patent situation." She described the deal as another termination deal similar to those Vonage has signed with other carriers, reiterating that the agreement was unrelated to the Verizon agreement. However, an unnamed source at Voip, Inc. suggested to TelecomWeb that Vonage would indeed be using its network to carry its calls, while refusing to speculate about the patent dustup.

Posts: 2257 · Posted: Fri Apr 06, 2007 1:13 pm Post subject:

holocron -

Thanks for following up on that and letting me know. I saw a bunch of press releases on it, and never saw the corrections afterward. Oopsie. I appreciate the clarification.

Hmm, that actually would be an ideal situation for Verizon, wouldn't it? Picking up 2+ million customers for a song, since they would the the only viable suitor (anyone else buying them out would simply fall under the same suit).

Clever.

Posts: 62 · Full Forum Member Joined: Mar 04, 2006 Posts: 62

I wonder how Vonage will spin this on their website come next Thursday. And will it mean we don't have to see all those annoying commercials on tv anymore. I agree that it will be a good thing if they spend those millions on keeping existing customers and upgrading the service and adding new features.

Posts: 27 · Vonage Forum Junior Joined: Mar 25, 2007 Posts: 27

Vonage Receives Temporary Stay In Verizon Patent Litigation, Continues to Sell Service

HOLMDEL, N.J., April 6, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Vonage today secured a temporary stay from U.S. Court of Appeals for the Federal Circuit in Washington, DC. The stay enables Vonage to continue to sign up new customers until the Appellate court can hear Vonage's request for a permanent stay. The Court's ruling allows Vonage to continue to provide phone service to existing customers.

Earlier today the U.S. District Court in Alexandria, Va. indicated it would enter an injunction against Vonage effective April 12, 2007 in connection with certain Verizon technology on which it was found to be infringing. The Court indicated that Vonage would be barred from acquiring new customers during its appeal to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. In response, Vonage filed for and received an emergency stay of the injunction from the Federal Circuit.

About Vonage

Vonage (NYSE: VG) is a leading provider of broadband telephone services with over 2.2 million subscriber lines. Our award-winning technology enables anyone to make and receive phone calls with a touch tone telephone almost anywhere a broadband Internet connection is available. We offer feature-rich and cost-effective communication services that offer users an experience similar to traditional telephone services.

Our Residential Premium Unlimited and Small Business Unlimited calling plans offer consumers unlimited local and long distance calling, and popular features like call waiting, call forwarding and voicemail -- for one low, flat monthly rate. Vonage's service is sold on the web and through national retailers including Best Buy, Circuit City, Wal-Mart Stores Inc. and Target and is available to customers in the U.S., Canada and the United Kingdom. For more information about Vonage's products and services, please visit http://www.vonage.com.

Vonage Holdings Corp. is headquartered in Holmdel, New Jersey. Vonage(tm) is a registered trademark of Vonage Marketing Inc., a subsidiary of Vonage Holdings Corp.

Vg-f

SOURCE Vonage

Brooke Schulz of Vonage, +1-732-528-2627, brooke.schulz@vonage.com; or Nick Kalm of
Reputation Partners, +1-312-222- 9888, nick@reputationpartners.com

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