18 Comments

Summary:

Verizon’s lawsuit against Vonage is the VoIP version of showdown at Ok Corral! The weary entrepreneurs have gone from fighting the regulatory morass to fighting the patent morass. The ability of Verizon et al to play the dimensions of uncertainty associated with patents makes one nostalgic […]

Verizon’s lawsuit against Vonage is the VoIP version of showdown at Ok Corral!

The weary entrepreneurs have gone from fighting the regulatory morass to fighting the patent morass. The ability of Verizon et al to play the dimensions of uncertainty associated with patents makes one nostalgic for the ability of Verizon et al to play the dimensions of uncertainty associated with the regulatory pronouncements of the FCC. Anyone not attracting a patent lawsuit should feel a bit embarrassed. All the companies with some claim to success will get their turn before Verizon exhausts its legal budget.

Lost among the legal theories, predictions of Vonage’s demise, and the wishful claims Vonage’s troubles are unique is the fact that the future of the VoIP industry depends on challenging vague, generic, overly broad patents. The hope for low cost communications, cool applications, and connected devices has been lost in a patent system gone wild, where companies file patents, just as telemarketer dial for dollars.

The birth of the VoIP industry happens to coincide with the greenlight on “method patents” aka software patents. The framing of Verizon’s patents as “technology innovations” reflects a press release version of reality. Verizon’s patents address methods of communication between network elements.

They would have been unpatentable as little more than mathematical algorithms until lawsuits overruled the patent office’s distaste for method patents in 1999. Efforts to establish the quality of method patents represents a particular challenge, because applying companies pursue an application fatigue strategy. Companies make a long list of broad claims and await rejection. They use information in the rejection to refine the claims and repeat the process.

Method patents remain in dispute and Congress appears ready to pursue reform, but the VoIP industry seems unlikely to survive long enough to benefit from a cure. The need for a better means of vetting software patents motivated IBM, Microsoft, GE and others to assembled a public peer review process in conjunction with the patent office, but other priorities and a slow start mean the project does not offer a near term solution for
the VoIP industry.

Participants in the VoIP industry will need to quit cowering in the corner and initiate their own efforts to move the patent process back toward meritocracy. The three surviving patents Verizon claims Vonage infringes represent a good place to start. They look like the prototypical “garbage patent” clogging the system.

Five years of graduate engineering education, five years at Bell Labs, and five years working on VoIP startups should equip me to appreciate the innovation content of Verizon patents. In fact, as the Project Director for Vocaltec Communications, I was the senior technical person responsible for implementing Verizon’s first VoIP pilot in 1997. Reading and re-reading the patents leaves me at a loss as to their innovation content.

Extensive scrutiny of patent claims represents the only way forward. The Internet that sparked several million articles associated with Wikipedia can cope with due diligence on 2200 VoIP patents. AT&T successfully prosecuted 600 patent infringement cases between 1876 and the expiration of the telephone patent in 1891. This time around there is no patent on the basic innovation underlying VoIP.

Verizon can’t make the Internet go away with a patent lawsuit. Vonage’s poor showing in court does not prove patents on implementation issues and features will ultimately sink the VoIP industry. Verizon’s success reflect genius in applying for and defending patents, not genius in innovations protected by patents.

I don’t begrudge Verizon’s right to pursue all legal means to preserve the status quo, but three generic and ambiguous patents seem a thin reed for a $90 billion company. If patent disputes ultimately undermine the VoIP industry, it will owe to the self-inflicted wounds of inertia, not patents. The industry need not sit idle for the next 15 years waiting for patents to expire. Take a look and judge for yourself.

Click here for our previous Vonage-Verizon patent dispute coverage.

You’re subscribed! If you like, you can update your settings

  1. The patent system sucks for the same reason, the FCC sucks, lawyers suck, Kongress sucks!

    The original intent of protecting intellectual and creative property has been distorted into means and methods of protecting corporate creeps from competition.

  2. Your engineering experience must have confused you into thinking that you understand patents.

    You have made a HUGE mistake and confused software-related patents with business method patents with plain old method patents.

    Plain old method patents are OK. It’s business method patents and software-related patents where people have problems. And most of those are overblown. The “junk patents” you so dislike (and patent haters keep trotting out the same 10-15 patents (out of millions) as evidence of a system gone awry) are more likely than not viewed as “junk” because of hindsight of current technology. If they were “junk” when the application was filed, then fine. But did you ever consider the state of the art at the time when they were filed?

    BTW, I am a patent attorney. And I did not work on any Verizon patents.

  3. Daniel,

    Thanks for the post. Can you point me to a lawsuit at issue here:

    They would have been unpatentable as little more than mathematical algorithms until lawsuits overruled the patent office’s distaste for method patents in 1999.

  4. Steve, would you ably for a patent for e=mc^2 at it’s time of origin? How much damage would have occurred to modern physics if universities would have patented everything under the Sun at that time?
    Oh btw, Math is a description language you don’t invent anything in math.

  5. Jim Whiteley Monday, April 9, 2007

    Excellent! You could add two other concepts that help create “junk” patents. Combining two obvious ideas to create an unique and therefore patentable one and the ability to extend the original filing date. Put this all together and apply it to software and you get the mess we have. Over 2000 VoIP patents is absurd.

    Does anybody know why Verizon is becoming a “Patent Troll”? Do they really think they will stop VoIP? It is going to become a PR nightmare for them.

  6. The brief history of trying to supress VoIP includes many of the world’s PTTs. Early VoIP implementations in the Pacific Rim were quietly withdrawn from the market when word came forth that your peering router might become mis-configured.

    Verizon is also in the company of these monopolists and also dozens of strong man dictators who value their $12/minute tarrifs for voice calls back to EU and US.

  7. Ronald,

    e=mc^2 is a formula based on an observation of natural occurring phenomena. Such stuff is not patentable, and has never been patentable. The definition was described in the early 1970’s as “anything under the sun made by man”.

    As for VoIP patents, read the claims to figure out what they’re trying to cover. The title won’t tell you. The abstract won’t tell you. The claims will.

  8. Stevie G,

    Try reading the article…the author was implementing the state of art at the time, so he should know if VoIP patents obvious at the time.

    The people who made real advances generally don’t like junk patents. For example, do you link Lemuelson’s patents were junk or real advances?

  9. Patent-Monkey Monday, April 9, 2007

    The Verizon patents all were published and issued when Vonage was founded in 2001. In looking to the SEC, any prospective investors can see in Vonage’s S-1 that they clearly had identified patent litigation risk:

    “With respect to the patent litigation identified above [updated from 3 to 5 separately named cases], we believe that we have meritorious defenses against the claims. However, we might not ultimately prevail in these actions. Whether or not we ultimately prevail, litigation could be time-consuming and costly and injure our reputation. If any of the plaintiffs prevail in their respective actions, we may be required to negotiate royalty or license agreements with respect to the patents at issue, and may not be able to enter into such agreements on acceptable terms, if at all. Any limitation on our ability to provide a service or product could cause us to lose revenue-generating opportunities and require us to incur additional expenses. These potential costs and expenses, as well as the need to pay additional damages awarded in the favor of the plaintiffs could materially adversely affect our business.”

    Interesting to note in hindsight “if at all” in this section.

    Sprint, Rates Technology, Barry W. Thomas, Verizon and Klausner Technologies all have pursued patent litigation suits against Vonage dating back to 2005 which would be worth aggregating in your linked Wikia review.

    Since its formation in 2001, Vonage holds 3 purchased patents, and 5 applications, but it appears correct to note that Vonage had no patented technology from its early formation days.

    Also from the SEC S-1, Vonage had invested almost $500 million in marketing at the time of the IPO, but no firm R&D investments quantified to date in their 10-Q’s. They are rolled into the SG&A section, which is smaller than marketing in total.

    A better question might be what Vonage really is, a VoIP re-selling company or a VoIP technology player? Perhaps that discussion will lead you to a different answer to the question “Why do we have a VoIP patent mess?” using Vonage as the poster child.

  10. Jesse Kopelman Monday, April 9, 2007

    As an engineer, reading patents is depressing. Patents are for lawyers. Is it any wonder that Steve G and Daniel have differing opinions here?

Comments have been disabled for this post