Vonage Dodges State Regulations
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The FCC decides that cable, phone and other companies offering internet-based phone services fall under federal jurisdiction. The company calls the ruling a victory for consumers.
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U.S. communications regulators on Tuesday exempted Internet telephone services from certain state oversight, a boon for Vonage Holdings Corp. and other providers aggressively pushing the new service.
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Internet phone services company Vonage  Holdings Corp.  said on Monday it did not infringe on  Verizon Communications Inc.'s  patents and a lawsuit will  not disrupt its business whatever the outcome.
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The U.S. Federal Communications Commission has ruled that incumbent local exchange carriers must connect to VoIP (voice over Internet Protocol) services, overruling two state public service commission opinions.
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Vonage didn't attract as many new subscribers to its Internet telephony service despite heavy marketing.
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Washington - Phone calls made over the Internet cannot be regulated by states, the Federal Communications Commission said Wednesday.
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(InfoWorld) - A federal court ruled on Tuesday that struggling VoIP provider Vonage infringed on patents owned by Sprint Nextel. Jurors in the U.S. District Court in Kansas found that Vonage willfully infringed on Sprint's patents as part of its VoIP service, Vonage said. The jury awarded Sprint $69.5 million in damages, which amounts to 5 percent of Vonage's revenue during the infringing period. Vonage plans to initially ask the court to set aside the verdict, but if that fails, the company will appeal the decision. In the meantime, Vonage will also develop workarounds that don't require Sprint's patents, it said. This is the second legal blow to Vonage this year. A court found earlier this year thatÂ Vonage infringed on Verizon patents. That case came with an injunction that would have prevented Vonage from signing up new customers.Â Vonage won a stay of that injunctionÂ and is appealing the original infringement ruling. Although it's clearly bad news for Vonage to have two patent infringement rulings against it this year, the appeals could change everything, said Seth Ostrow, a partner specializing in patents in Dreier LLP. "Often there are mistakes made during various stages of a case that form the basis for a successful appeal, and that, coupled with the statistics, gives reason to think that Vonage has a significant chance of getting this changed," he said. Statistics show that patent cases often get changed on appeal, he said. In August, Vonage said it had nearly completed rolling out workarounds for two of the three patents claimed by Verizon. Still, the Verizon case alone appears to have slowed growth for the company, the largest independent VoIP provider. In its second quarter this year, Vonage added 57,000 customer lines, compared with 256,000 in the same quarter in the previous year. Vonage has said that Verizon pursued the lawsuit in an effort to eliminate a competitor. Vonage stock opened the day at $1.99 and closed at $1.20, a 33 percent drop. This story was updated on September 25, 2007
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Internet phone service Sipphone has charged Vonage Holdings and retailer Fry&#39;s Electronics with false advertising for failing to adequately disclose limitations on hardware that allows phone calls to be placed over a broadband connection.
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Minnesota may not regulate calls through cyberspace, as it does calls through traditional phone lines, a federal appeals court ruled.
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There are just too many cards stacked against Vonage.
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(InfoWorld) - Vonage is downplaying an appeals court decision affirming an earlier verdict of patent infringement on two patents owned by Verizon Communications. The decision, made Wednesday, calls for the U.S. District Court in Virginia to retry the infringement judgment on a third patent. It also vacated the original $58 million in damages and 5.5 percent royalty imposed in the original judgment. The lower court will reconsider the size of the damage award and Vonage expects it to be reduced, said Charlie Sahner, a Vonage spokesman. In addition, Vonage expects a return soon of part of the cash it put up as bond after the ruling was made, he said. The decision comes a day after Vonage lost anotherÂ high-profile patent infringement case brought by Sprint-Nextel. The jury in that case awarded Sprint $69.5 million in damages. Vonage vowed to appeal that decision too. Vonage has already deployed technology so that it doesn't require the two patents upheld in theÂ Verizon case, it said. That means that if the lower court upholds the decision to require Vonage to pay royalties for using the patents, the company will only have to do so related to the period of time before the workaround was implemented, Sahner said. The company maintains that it did not infringe on the remaining Verizon patent in question and plans to defend itself against any new damages judgments. That technology applies to less than 10 percent of Vonage's network, and the company has already completed development of a workaround should the court decide that Vonage infringes on the patent, Sahner said. Vonage is the largest independent VoIP provider in the United States. While it continues to assure customers that the service remains reliable throughout the legal wranglings, the company has seen a decline in new customers. In its second quarter this year, Vonage added 57,000 customer lines, compared with 256,000 in the same quarter in the previous year. Still, Sahner emphasized that the future is bright for Vonage. The company has the cash to pay for the Sprint case, if it fails in appeal, Sahner said. "Vonage is here to stay," he said. "We want to be an alternative to the entrenched phone company and think it's important to have an alternative." This story was updated on September 26, 2007
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(InfoWorld) - A federal jury has found that Vonage infringed three Verizon patents and must pay $58 million in damages plus royalties to Verizon, Vonage confirmed Thursday. Verizon sued Vonage last June, alleging the VoIP provider had violated seven of its patents involving the packet-based calling technology. In reality, the giant carrier sued to try to eliminate "a formidable competitor" to part of its traditional phone business, said Vonage spokeswoman Brooke Schulz. Vonage must pay a 5.5 percent royalty rate on future sales to use the Verizon technology. After the verdict, Verizon asked for a permanent injunction to stop Vonage from using the technology altogether, Vonage confirmed. In a statement, Vonage said it expects the verdict to be reversed on appeal. The award was 70 percent lower than the $197 million that Verizon originally sought, Vonage said. There is no basis for an injunction, and Vonage will seek a stay from the Federal Court of Appeals if it is imposed, the company said. Vonage customers should not see any change to their service, Vonage said. "We are proud of our inventors and pleased the jury stood up for the legal protections they deserve," Verizon said in a statement. Â
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Decision exempts Vonage from Minnesota state telephony laws.
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Vonage and AT&#38;T, still locked in a price war, are separately planning new features in a battle for VoIP customers.
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Telecommunications provider Vonage  Holdings Corp.  said on Wednesday that it is not buying  back shares that were allocated for its customers to purchase  in its initial public offering last week.
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The networking company says that Vonage is violating nine of its patents, including those related to emergency and information calls, as well as click-to-call functionality.
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Settlement is latest in a string of patent cases against Internet phone company. Vonage has settled disputes with Sprint, Verizon in recent months.