Vonage loses two patent cases in one week

Convergence & VoIP This newsletter is sponsored by New Edge Networks MPLS: The tool for a robust virtual workplace Get real-world advice on how to best support and manage your organizations virtual workforce. Listen to this complimentary Webcast, Building IP Networks for the Distributed Workforce, to hear how selecting the right WAN service to support distant employees can make all the difference. Click here to register now. Network World's Convergence & VoIP Newsletter, 10/01/07 Vonage loses two patent cases in one week By Steve Taylor and Larry Hettick Vonage was hit twice last week with bad news from its ongoing legal battles. On Tuesday a jury found that Vonage was guilty of infringing on patents owned by Sprint-Nextel. The jury awarded Sprint-Nextel $69.5 million in damages and a 5% royalty on future revenues. Vonage immediately announced it will appeal the case. On Wednesday, Vonage lost again in its ongoing patent infringement suit filed by Verizon when a federal appeals court upheld parts of the March 2007 verdict and also upheld an injunction against Vonage from using the patented technology. When the higher court upheld the lower court’s injunction that prohibits Vonage from using the contested technology, it delayed the injunction by a month to give Vonage a chance to appeal the ruling to the U. S. Supreme Court. Vonage estimates that about 90% of its customers are already getting service based on a work-around that avoids the contested patents. Vonage did get some relief in the Verizon case when the court found that one of the patent rulings involving wireless access to VoIP services was not properly construed by the lower court. Network World VoIP and Convergence Buyer's Guide Find the right products for your enterprise - fast. Our extensive database of detailed product information will quickly help you pinpoint the hardware or software you need to build out a converged voice and data network. With the side-by-side comparison tool you can evaluate product features and make the best decision for your enterprise. Click here to go to the Buyer's Guide now. The good news for Vonage is that when the higher court sent the Verizon case back to the lower court, it also vacated the $58 million damages and 5.5% royalty penalty imposed in the initial ruling, directing the trial court to reconsider the verdict and penalties. The bad news is that Vonage could still be liable for damage and royalty penalties once the lower court reconsiders the case. But the worst news of all is that Vonage is still losing money and that the company only added 57,000 net subscribers for Q2 2007 – proving that it is facing increased competition from other VoIP providers like the cable companies that bundle VoIP with a triple-play package. A glimmer of hope for Vonage: At least in the Sprint case, the jury didn’t issue any injunctions that prohibit Vonage from offering service to new or existing customers (as was the original case with Verizon) so Vonage won’t be required to find a technical work-around to stay in business. Next time: Sprint makes news with femtocell-based fixed-mobile convergence.   What do you think? Post a comment on this newsletter

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Contact the author: Steve Taylor is president of Distributed Networking Associates and publisher/editor-in-chief of Webtorials. For more detailed information on most of the topics discussed in this newsletter, connect to Webtorials, the premier site for Web-based educational presentations, white papers, and market research. Taylor can be reached at taylor@webtorials.com Larry Hettick is an industry veteran with more than 20 years of experience in voice and data. He is Vice President for Telecom Services and Infrastructure at Current Analysis, the leading competitive response solutions company. He can be reached at lhettick@currentanalysis.com This newsletter is sponsored by New Edge Networks MPLS: The tool for a robust virtual workplace Get real-world advice on how to best support and manage your organizations virtual workforce. Listen to this complimentary Webcast, Building IP Networks for the Distributed Workforce, to hear how selecting the right WAN service to support distant employees can make all the difference. Click here to register now. ARCHIVE Archive of the Convergence & VoIP Newsletter. BONUS FEATURE IT PRODUCT RESEARCH AT YOUR FINGERTIPS Get detailed information on thousands of products, conduct side-by-side comparisons and read product test and review results with Network World’s IT Buyer’s Guides. Find the best solution faster than ever with over 100 distinct categories across the security, storage, management, wireless, infrastructure and convergence markets. Click here for details. PRINT SUBSCRIPTIONS AVAILABLE You've got the technology snapshot of your choice delivered to your inbox each day. Extend your knowledge with a print subscription to the Network World newsweekly, Apply here today. International subscribers, click here. SUBSCRIPTION SERVICES To subscribe or unsubscribe to any Network World newsletter, change your e-mail address or contact us, click here. This message was sent to: networking.world@gmail.com. Please use this address when modifying your subscription. Advertising information: Write to Associate Publisher Online Susan Cardoza Network World, Inc., 118 Turnpike Road, Southborough, MA 01772 Copyright Network World, Inc., 2007