Sprint Nextel and Verizon jury trials have Vonage on the brink

The same wording was used on almost every one of these patents, and yet there was prior art in abundance throughout that period and the patents themselves referred to ITU standards and the IEEE Journal, with items going back to the 1980s, which again used very similar statements.

The patent 5,991,301 was filed in 1995 using virtually the same words. And again in 2000, patent number 6,452,932 was filed. Many of these had identical wording, the same diagrams and referred to prior patent applications which had long since been abandoned, reworded and re-applied for.

What is ridiculous is that many of us that were around in technology pre-1980 know we saw demonstrations of VoIP over 25 years ago, and that there are oceans of prior art, and yet a jury trial is called where a big brand is up against a company that many of the jury will never have heard of and they are only asked to consider if the upstart is using the technology in the filings. They are not asked the broader question of who invented VoIP and its connection to PSTN.

The creation of VoIP was not down to these patents, and is not purely a US invention. There is a huge amount of prior art that has left a 20 year paper trail and the best way of cutting through it is NOT to ask the man in the street, but to give someone time to become expert and then make a ruling.

So far the jury ordered Vonage to pay Sprint Nextel $69.5m and given that this immediately follows in the heels of a virtually identical Verizon Jury trial with the same outcome, Vonage investors have left in droves and the company has been deprived of the oxygen of further investment.

Vonage must now pay Sprint a five per cent royalty to go with the 5.5 per cent royalty awarded to Verizon for virtually the same patents. Vonage continues to insist it can pay the $58m damages for Verizon and the $69.5m that the court this week has awarded to Sprint.

Already a first appeal to the Verizon case has been heard and the case sent back to the lower court for clarification, a move which will lower the charges and perhaps lower that royalty.

If Verizon and Sprint can get Vonage out of business, what's to stop them going after the cable operators that also connect to their networks and map VoIP traffic onto circuit switched equipment? The perhaps it can go after Cisco and then every other equipment supplier?

The truth is this is an attempt to pull the wool over a jury's eye so that these massive telcos can rid themselves of the VoIP rival that has taken the lion's share of VoIP customers away from it, some 2.4 million. Surely the Supreme Court has to fix that for the benefit of progress.

After all, these rulings are saying that the modern IP based system will be killed off by denying it connectivity with the old and out of date PSTN networks. We always thought that patents were about promoting innovation, not putting impossible blocks in its way.

Copyright © 2007, Faultline

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