Why do we have a VoIP patent mess?

18 Comments

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.

18 Comments

PRMan

My question is why does Verizon get to wait until Vonage has over 2 million customers and has spent hundreds of millions of dollars in advertising before sueing?

Surely they realized their patents might have been violated 7 years ago when everyone first heard of Vonage… But I guess it wasn’t worth it to protect their assets then.

That’s why patents should be like Trademarks. If you don’t vigorously protect it, you lose it.

Aaron Moore

Ronald Riley,

Have you no concept of overly broad patents, prior art, or multiple similar patents in the system. In any case, Vonage shouldn’t be the one being sued – they are just using technology provided by other companies. That technology should be useable in good faith and if anybody should have been sued to start with it should be those who provided the technology that uses the overly broad Verizon patents.

Aaron Moore

Individuals such as yourself should voulenteer a bit of time to support Vonage’s court fight. As a former Verizon employee with your credentials it should make interesting press. I am fed up with the direction patents and lawsuits are heading here in the US. Overly broad patents and legal battles that only stifle innovation. My little part is to never use Verizon services.

Bubba Joe

Mr Riley,
At least your honest where your bread is buttered.

But, people who truly invent things (like machine vision) feel like the rest of us – that the patent system is broken. For example, see http://www.advancedimagingpro.com/publication/article.jsp?pubId=1&id=90

“Nello Zuech, President of Vision Systems International, applauds Cognex and Symbol’s efforts. “It’s about time common sense prevailed,” says Zuech. “The users of machine vision have been held hostage and extorted by a guy who claims to have invented just about everything… In the case of machine vision, he corrupted the patent system by writing new patents and adding claims to his old patents as he read about applications of machine vision in the commercial press. If I had been writing patents instead of proposals as I was in the early 70s, most of his patents would have been invalid—and I was not alone at that time.”

Ian

The real question: How is it possible to patent methods and technologies that are described in detail in an open standard?

Verizon shouldn’t have been given the patents in the first place.

Ronald J Riley

Patents are a great equalizer for upstart inventors. Look at Eolas, NTP, etc. Lone inventors with a few patents can and do take on big players and WIN.

What is funny or maybe sad is that they are some very bad corporate players who grew to the point that they can no longer invent anything significant. But they have lots of money, much of it obtained through theft of others’ intellectual property, they are incredibly arrogant, and they know how to be inventive with public relations. They are misleading the public by blaming their self inflicted litigation problems on the patent system. And they are systematically shipping both the capital they made from invention and our country’s intellectual capital to developing countries. They are milking America dry, and they want your help in finishing the job. You really need to wise up, because if people do not stop buying the propaganda the patent pirating transnational’s are feeding them you call all kiss you jobs and prosperity goodbye.

So who is at fault here? Vonage reminds me of a young Dell, Microsoft, or Cisco. None of them built their business on inventions. Rather they built a business on others’ inventions. In all these cases they got sued for taking liberties with other’s property.

I view Verizon as a lumbering dinosaur and personally think that the world would be better off without the old telecoms. Lets face the fact that telecoms are dieing, and they know it. They are going to fight with all they have. It will not save them but they are not ready to accept the fact that the business is changing in ways where they will have no place.

But Vonage either failed to check for patents relevant to their business or they intentionally took liberties with other’s property. Other VOIP providers say that they have no issues with Verizon. Is this because they did the patent clearance searches and then worked around the patents? Perhaps they invented and patented better means to deliver VOIP services?

The patent system is not broken, and the only companies with litigation crises are those who run fast and loose with others patent properties.

One last point, any engineer worth their salt can learn to read and understand patents. The differing opinions are driven by one group who knows what they are talking about and another who does not.

Ronald J. Riley,
President – http://www.PIAUSA.org – RJR at PIAUSA.org
Executive Director – http://www.InventorEd.org – RJR at InvEd.org
Senior Fellow – http://www.PatentPolicy.org – RRiley at PatentPolicy.org
Washington, DC
Direct (202) 318-1595 – 9 am to 9 pm EST.

Pro-VOIP

I think what is disgusting is Verizon attacking a budding company. Billions vs. millions? Come on. Cable is the real threat. It’s too bad big business is all about entrenchment and ripping off consumers. Remember Enron? Ken Lay for years pimped the Bush family and legislature to dereg the nat gas industry. Then it took its perceived prowess and manipulated the electricity markets in California…essentially ripping off the unsuspecting and squashing anyone or anything in the way. Verizon’s actions are 100% consistent with its perfect anti-trust, anti-competitive track record. Simply, Verizon is afraid to duke it out in the streets so it abuses our judicial system.

I prefer the early days of nascent auto manufacturing where Ford didn’t care about patents or who used his ideas or manufacturing techniques. Everyone benefited and the competitors waged a war to provide consumers with a better car. This lead to a period of mindscrambling innovation and creativity that arose out of such a short period of time…without Ford spending much time defending intellectual bull$hit. Verizon, enough. Start acting like a true competitor. I couldn’t stand Verizon when I had no choice before, and I’ve come to loath the empire even more. Simply, I’d give up my phone, TV and internet if Verizon were the only choice. Verizon et al…you disgust me.

Jesse Kopelman

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

Patent-Monkey

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.

Bubba Joe

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?

Steve G.

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.

Neil Henry

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.

Jim Whiteley

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.

ronald

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.

Drew Clark

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.

Steve G.

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.

Eideard

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.

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