Vonage, whose very existence was threatened due to numerous
patent infringement complaints by several major telecommunications companies, finally
appears to be reaching the light at the end of the tunnel, agreeing to settle
another lawsuit with AT&T.
Vonage has become the poster child for a tenuous business
model: total reliance on others’ networks to deliver its services. It was a
business gamble, of course, but also a legal gamble, because no one could have
predicted that Vonage would have continual unfettered access to others’
networks in the present or future. While Vonage eventually paid its way out of patent-infringement
danger by settling the numerous patent suits, the result could have been much
worse. Stricter rulings from courts or the infringement claimants’
unwillingness to settle might have made Vonage totally obsolete and bankrupt.
Even Vonage’s ability to wiggle out of its legal clutches
was not without cost. Until this year, Vonage’s VOIP service was the largest
competitor to traditional phone companies. As Vonage has dealt with its legal
and financial troubles, large cable companies like Comcast and Time Warner have
surpassed it in the total number of VOIP phone subscribers.