Saturday, October 27th, 2007 | Posted in Vonage | No Comments »
Another settlement from Vonage in its saga with AT&T, Sprint and Verizon:
Vonage on Thursday announced it has settled a protracted patent lawsuit with telecom giant Verizon Communications that will cost the struggling VoIP firm a maximum of $120 million.
Ahead of the announcement, Vonage shares slid 7 cents a share, or four percent, to $1.53 a share before storming up $1.22 a share, or 80 percent, to $2.75 a share in after-hours trading following the news.
In March, a Virginia jury found Vonage had infringed on three Verizon
patents and awarded the company $58 million in damages plus a royalty on future sales of its Internet-based telephone service. In September, an appeals court sent the remaining two patents in dispute back to a lower court for retrial.
Vonage had already set aside a $66 million cash-collateralized bond, a $12 million second-quarter escrow payment and a $10 million third-quarter escrow payment to cover the initial damages awarded to Verizon in March. While the Court of Appeals weights the merits of the two remaining patents, identified as ‘574 and ‘711, Vonage has effectively capped its maximum exposure to damages at $120 million. If Vonage wins a rehearing on either of the remaining patents in dispute, it will only pay a total of $80 million in damages to Verizon.
Saturday, October 20th, 2007 | Posted in Vonage | No Comments »
On the heels of Sprint’s success against Vonage, AT&T follows suit:
In a filing with the U.S. District Court for the Western District of Wisconsin, AT&T alleged that Vonage wilfully infringed an AT&T patent related to telephone systems that allow people to make VOIP (voice-over-Internet Protocol) calls using standard telephone devices.
In the legal filing, AT&T said it tried to reach an agreement with Vonage to license the patent, but failed, which forced the lawsuit.
Vonage announced on Oct. 8 that it settled its suit with Sprint Nextel for US$80 million.
Monday, October 8th, 2007 | Posted in Vonage | No Comments »
Via Bloomberg:
Vonage Holdings Corp., the Internet
phone-service provider, is having its biggest single-day advance
since going public last year after it settled one of two patent
suits that threatened its survival.
Vonage shares surged as much as 82 percent. Sprint Nextel
Corp., the third-largest U.S. phone company, agreed to license
more than 100 Internet telephone patents to Vonage, which will
pay $80 million to end the case and use the technology.
The settlement removes one hurdle for Holmdel, New Jersey-
based Vonage, allowing it to connect Internet calls to standard
phone lines. Vonage still faces a cash shortfall that may leave
the money-losing company struggling to cover its expenses next
year, Stanford Group Co. analyst Clay Moran said.
Bad news for Vonage , via the AP:
For the second time in two days, Internet phone company Vonage Holdings Corp. was hit with bad legal news Wednesday when a federal appeals court upheld a March jury verdict and injunction against it for patent infringement.
The company’s shares sank to 93 cents, their lowest level since Vonage went public in May 2006.
A Virginia jury awarded Verizon Communications Corp. $58 million in damages plus 5.5 percent royalties on future revenues after finding that Vonage violated three Verizon patents in building its Internet phone system.
On Tuesday, Vonage was ordered to pay Sprint Nextel $69.5 million in damages after a jury found that Vonage willfully infringed on six Sprint telecommunications patents.
Verizon spokesman Peter Thonis said Wednesday’s ruling ‘’speaks for itself.”
Wednesday, April 11th, 2007 | Posted in Vonage | 1 Comment »
Via MarketWatch:
Last Friday, a U.S. District Court judge ordered the company (NYSE: VG) to stop adding new customers following a prior ruling that Vonage 
violated patents held by Verizon Communications (NYSE: VZ).
A few hours later, however, a federal court of appeals issued a stay that allows Holmdel, N.J.-based Vonage to continue to do business as usual until an appeal is heard.
Vonage is seeking to make the stay permanent. The stay gave the company a reprieve, but investors didn’t. Vonage’s stock fell to an all-time low of $2.88 from last week’s closing price of $3.37, before rebounding slightly. Shares were down 6% at $3.17 at late morning.
On Monday, Vonage said in a brief statement that "it continues to believe it will succeed on appeal and continues to work on designing around the Verizon patents."
Vonage has said its "workaround" would allow subscribers to use their service as they normally do without violating the Verizon patents.
Saturday, April 7th, 2007 | Posted in Vonage | 1 Comment »
Via Reuters, about the ongoing Verizon - Vonage litigation:
Vonage Holdings Corp. (NYSE: VG) cannot service new customers while it appeals a finding that it infringed Verizon Communications Inc. (NYSE:VZ) patents for making phone calls over the Internet, a federal judge ruled on Friday.
Vonage plans to appeal U.S. District Judge Claude Hilton’s order that allows Vonage only to service existing customers and requires the company to post a $66 million bond.
Roger Warin, a lawyer for Vonage, told the court the choice between a partial stay and a total prohibition on using the Verizon technology amounted to "cutting off oxygen or a bullet to the head" for Vonage.
Vonage Holdings Corp. 
(NYSE: VG), a leading provider of broadband telephone service, today announced that one of its subsidiaries, Vonage Network Inc., has signed a three-year contract with EarthLink 
(Nasdaq: ELNK) to offer its customers Wi-Fi Internet access in select cities throughout the United States.
Under terms of the agreement, Vonage will buy Internet access on a wholesale basis from EarthLink in all cities where the company will build, own and operate municipal wireless networks. Vonage will then sell its own Wi-Fi Internet service to consumers under the Vonage brand.
EarthLink has become one of the leaders in the emerging municipal Wi-Fi market, having been awarded contracts in Philadelphia; Anaheim, California; Milpitas, California and New Orleans.
But at GigaOm, they’re skeptical:
Reading the press release last night was a head-scratcher moment deluxe: Vonage is getting into the business of selling Wi-Fi? What, they don’t have enough scars from taking on incumbents in voice, now they’re going to butt heads over Internet access as well?
During a Monday morning phone call, we tried to talk some sense into Vonage chairman Jeffrey Citron, but he refused to be dissuaded. Bundling Wi-Fi will make it easier for customers to sign up for Vonage VoIP, he said. And if they are already Vonage customers? Lower acquisition costs, Citron replied.
Maybe it was the fuzzy connection (Citron said he was calling from one of the noisy show-floor booths Vonage has at CES), but we still weren’t convinced that reselling EarthLink’s not-so-fast Wi-Fi would be such a big bonus for Vonage.
This strikes us as a questionable deal, too. Especially given how competitive the fixed WiFi Internet service market is already with existing firms (e.g. t-mobile), let alone the mobile broadband services which are getting better, faster and cheaper (e.g. Verizon, Sprint).
A smart marketing plan on Vonage’s part - get their software preinstalled on HP and Compaq computers. Of course, many of us immediately delete all programs that are forced upon us when we buy a computer…
Vonage America Inc., a subsidiary of Vonage Holdings Corp. (NYSE: VG), a leading broadband telephony provider, today announced a special Vonage phone service offer for HP and Compaq consumer PC customers in the U.S. and Canada. With the purchase of an HP or Compaq consumer desktop or notebook, customers can get a special offer on Vonage’s residential premium unlimited plan.
"HP provides a terrific platform to deliver many of our new and advanced communication experiences," said Michael Tribolet, president of Vonage America Inc. "HP and Compaq PC customers now have access to feature-rich communication services for up to half of what they would pay for traditional phone service."
HP and Compaq consumer desktop and notebook PCs in the U.S. and Canada will contain either a Vonage brochure or an interactive CD-ROM in the PC box explaining details about the service. The brochure will outline the benefits of Vonage service, including integrated communications services, a broad range of features, and contact management. Customers can sign-up via their computer desktop or contact a toll-free number to receive the special offer for Vonage service.
Om Malik thinks that Vonage has some troubles:
Malik points to a slower pace of new customer acquisitions, strong competition from the cable companies and price wars in the VoIP service market.
More predictions of doom for VoIP service providers like Vonage:
Imagine you are a decision maker at a very large U.S. ISP. You are annoyed because your once-lucrative phone business is slowly being eroded by a new wave of VOIP providers such as Vonage, Skype and Net2phone.
These parasitic phone services are running on your high speed data circuits without paying a connection charge or royalty of any kind, but constantly offering dial tone at a lower cost than you, essentially stealing from your profitable consumer and business phone plans.
Well what are you going to do? The answer is simple — just swat these blood sucking leeches and be done with them before they grow too big! You call all your henchmen together for a meeting, stomp your foot, just like something right out of a Hollywood script. "I want these buggers taken care of!" you’d shout.
That’s a dramatic scenario — and perhaps one that consumers don’t question. Believe it or not, however, the operators of large telco companies, though profit driven, do not run roughshod over the consumer. Below we’ll detail some of the more likely scenarios and trade-offs being made in the face of this new competition.
