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Vonage saved by VoIP Inc., for now

One of the most memorable lines in recent cinematic history is when Dr. Evil in Austin Powers utters, “Throw me a fricking bone.” That was the first thought that came to mind when reading about Vonage having found a work around their patent mess, thanks to VoIP Inc., a little VoIP company from Florida.

Verizon recently won its patent infringement battle against Vonage, and unless the Holmdel, NJ-based VOIP company got a stay from the federal court on April 6, it was facing a lights-out type situation. However, this deal with VoIP Inc. – will help Vonage stay open for business at the very least.

According to a 8-K filing by VoIP Inc., it was going to provide Vonage with certain network services, though the filing didn’t really reveal the financial terms. VoIP Inc., has patents and has a subsidiary that provides direct VoIP interconnection facilities with multiple carriers.

The deal could at least help Vonage address 2-out-of-3 Verizon patents that have landed it in hot water. Two of the patents deal with how VoIP calls connect to the PSTN network and the third one is about making VoIP calls via Wi-Fi phones.

Vonage is delaying filing its annual report pending the federal court’s decision (expected on April 6.) Funny how they were mocking the market for overreacting – Vonage actions since then show that over reaction was justified.

Previously on GigaOM

  • 3/26/2007: VoIP patent mess to get messier.
  • 3/26/2007: Vonage ready to rumble
  • 3/23/2007: Vonage has 2 weeks to stop using Verizon patents, says Judge
  • 3/16/2007: Vonage – rocky road, not road kill
  • 3/8/2007: Vonage owes $58 million in patent case

11 Responses to “Vonage saved by VoIP Inc., for now”

  1. I think, unless you really know that this deal is for some sort of patent relief from Verizon, that you rethink this. I saw that Daniel Connor stated that “This agreement will help Vonage come out of two of the three Verizon patents that the former is said to have violated.” in his Vonage Forum press digest. Just seems like too material of an issue to not have the facts right.

    On the other hand, if, while reading the 8-K you also read the 10-K for that company, you many ask yourself why else would Vonage do business with them. Not a pretty read.

  2. Steve, I think you may want to stock up with both red and white wine because it appears that whether Vonage is roasted or toasted – this just might be a double fisted outcome.

  3. Yes; this move will help (a bit)…but it does nothing to address the other remaining Verizon patent…nor the likely many others sure to “come out of the woodwork” now that these early VoIP patent-owning innovators see that the court/s are willing to enforce such patents.

    Does anyone know whether roasted Vonage goes better with red…or white wine?

  4. Keep up the good fight Vonage! Vonage has saved me a ton of money over the last few years. Is it any wonder Verizon is so eager to shut down a low cost provider with a great product who lets you port your number? Why provide a fair price for your service when you can just sue your competitor into the ground instead?

  5. I wonder if Vonage’s focus will now shift substantially from new customer acquisition to preservation of the existing base to maximize value in the event of a sale. No point spending a few hundred million more on finding new victims if everyone else is churning out the back door.

  6. There is no doubt in my mind that Vonage auditors gave them “the company’s ability to continue in existence was in doubt” opinion. The next announcement concerning Vonage’s annual report will be that they have had to change their auditors and it will take them another 3 to 6 months to file their annual report.

    In that time, they will be looking to find a buyer. Let the shareholder class action lawsuits begin.