Appeal Rejected, Vonage Must Pay $117 .5 Million To Verizon

Vonage’s appeal was rejected by a U.S. appeals court, and so troubled VOIP provider Vonage will have to pay $117.5 million to Verizon as punishment for infringing their patents. In addition, Vonage will be required to donate 2.5 million to charity. Ouch, ouch, ouch.

Bloomberg says:

Vonage settled the infringement suit on Oct. 25 after Verizon won both a jury verdict and an appeal in the case. The accord left open the amount to be paid until the appeals court decided whether to grant Vonage’s request for reconsideration.

Legal costs have eaten into Vonage’s cash flow and may increase its risk of bankruptcy. The Holmdel, New Jersey-based company said yesterday that it may not have enough money to pay $253.5 million in debt due as early as December 2008. Vonage, which generated cash of $22.5 million in the third quarter, will try to restructure the debt.

Meanwhile, Verizon’s lawyers formed a giant robot and fought bunch of dragons, as is their habit.

Vonage’s Appeal Refused; Verizon Owed $120 Million [Bloomberg]

PREVIOUSLY: Vonage Settles With Verizon For Up To $117.5 Million
Vonage Settles With Sprint For $80 Million
Vonage Loses Verizon Patent Infringement Appeal, Downplays The Damage

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  1. warf0x0r says:

    Meanwhile, Verizon’s lawyers formed a giant robot and fought bunch of dragons, as is their habit.

    That would be both hilarious and interesting to see.

  2. C2D says:

    Glad I jumped ship back in June.

  3. Cowboys_fan says:

    I’ll stick to my landline thus not ever need to deal with either company. Too bad for vonage though, I hope they recover, though I imagine other companies will try suing them just to sink them further, its the American way!

  4. liquisoft says:

    I still don’t get what patent was infringed upon. Call me naive, but if Vonage uses VOIP and Verizon doesn’t, where’s the issue?

  5. algormortis says:

    There goes my home phone number.

    (Lest anyone suggest my fair employer’s Hotspot at Home, the employee deal on that is crap and I am so not giving up my overpriced narcissistic unloked European Nokia phone for that.)

    Are there any *safe* VOIP providers who, you know, aren’t the Creeping Evil of Comcast? I live in Seattle, if that helps, in a DSL-inelgible area, so i’m stuck with Scumcast.

  6. somecop says:

    I can’t wait to watch my rates drop since I’m a Verizon customer and they’ll have all that spare cash lying around.
    That’ll probably happen. Right?

  7. EagleTheta says:

    Nuts. I have Vonage, and have been very happy with it. Verizon holds this wonderful patent that Vonage appears to infringe, but can’t offer the same service as Vonage for even twice the price. Even if you bundle it with Verizon FIOS service. What a crock.

    May be time to switch to broadvoice and set up an Asterisk server. I’ve recently bought a Cistco ATA 186 to play with an ASterisk server. After all, if you fail to plan…

  8. EagleTheta says:

    Nuts. I have Vonage, and have been very happy with it. Sucks that Verizon won this, since they can’t/won’t provide the same service as Vonage at twice the price. Even if you bundle it in with FIOS, too.

    Looks like it’s time to really look into my own asterisk server as an alternative. I’ve recently bought a Cisco ATA for testing. After all, if you fail to plan…

  9. FLConsumer says:

    @liquisoft: I don’t have the links handy, but the Verizon patent was terribly vague. Even Skype would fall under the definitions of the patent.

    As much as I don’t care for Vonage (bad customer service), I do hope they make it. They’re the AOL of VoIP, and have a niche market — new VoIP users. Let ‘em deal with the noobs who don’t understand what bandwidth and RJ11 jacks are. Once they’ve “graduated” they can move to better, cheaper VoIP providers.

    One other thing…with Vonage’s high monthly fee + all of the taxes they charge, they’re not any cheaper than some of the landline plans now.

  10. casey451 says:

    I am a noob. My work is cut out for me tonight. Thanks flconsumr.

  11. theblackdog says:

    Hah hah, I’m going to point and laugh when they go belly-up and my ex loses his phone number. Sucks to be him, especially because he was dumb enough to go to Vonage after Sunrocket shut down. I warned him this would happen…

  12. m0unds says:

    The patent office needs to go away. It’s retarded that Verizon was allowed to patent technology as vague as a “method by which voice is transmitted via the internet” and have the courts actually enforce it. What a fucking joke.

  13. jeff303 says:

    @liquisoft: Verizon holds a patent on, more or less, mapping phone numbers to IP addresses. Those of us who oppose software patents find this completely absurd and trivial as many other companies have done this sort of thing for a long time, and it’s obvious to almost anyone ever working on communications systems.

  14. pouls29 says:

    @FLConsumer: Could you provide suggestions for better VOIP services? I have been happy with Vonage. They’re a lot cheaper and provide more services than QWEST.

  15. Angus says:

    @fixepah see [www.broadbandphoneservice.com] for starters…

  16. omyard says:

    @algormortis:

    I’m in Everett and I use Earthlink’s VoIP. $15/500 minutes, $25/unlimited, no long distance charges, all the extras, etc…

  17. Snarkysnake says:

    Na na na na…Na na na na…Hey, hey hey… Goodbye !

  18. edrebber says:

    Vonage charge billed a $39.95 cancellation fee to my credit card. Had to dispute the charge with my credit card company to get the money back. What a bunch of sewer rats.

  19. swalve says:

    @theblackdog: Wow, you sound like a real catch…

    @omyard: That’s what Vonage charges.