patent

Patent fight prompts Avistar to slash staff, China plans

Thu, 27 Mar 2008 07:59:58 -0400

Microsoft's patent dispute with Avistar has prompted San Mateo-based UC services company to announce plans to cut its workforce by 25 percent by the end of the first quarter and drop plans to initiate a China-based development program. Avistar has been struggling through some tough financial straits this year; its stock is off nearly 50 percent from its 52-week high and it only last week reached compliance with Nasdaq listing standards that require it to have a minimum $25 million in market value of listed securities.

Microsoft in February launched a challenge of all Avistar's U.S. patents for instant messaging, video conferencing and online collaboration. "This single action against Avistar's complete U.S. patent portfolio represents over 5 percent of the entire 2007 third-party re-examination challenges at the USPTO," said Avistar CEO Simon Moss, who took over as CEO of Avistar Jan. 1. While Avistar says it hopes to reach licensing agreements with Microsoft, the reality is that the challenge could be a crippling blow and Avistar is scrambling to protect its financial position.

The announcement comes on the heels of Avistar's launch of a videoconferencing system designed and priced for small to mid-size meeting rooms. The C3 Teamroom MP offers multi-party calling, automated track-the-talker camera adjustment, presence-awareness, click-to-call connection, integrated IP network bandwidth management technology, and interconnectivity with third party IP videoconferencing systems.

"C3 Teamroom MP takes the high-end functionality of our successful C3 desktop videoconferencing software for unified communications, and packages it for the meeting room at a price that will upset the competition," Stephen Epstein, chief marketing officer at Avistar, said in a statement.

For more on the patent dispute:
- Read the release

For more on Avistar's new video conferencing system:
- Read the release

Related article:
Microsoft challenges Avistar patents

SPOTLIGHT: 8X8 Inc. wins video patent

Mon, 17 Mar 2008 07:59:53 -0400

After last year's litigation onslaught patents are the new way to make money in the VoIP world. 8X8 Inc now has 72 voice and video communications patents and was recently awarded it's newest patent No. 7,339,604. It relates to a videoconferencing system with "a modular terminal that includes a conventional digital still camera coupled to an input port of the system." 8X8 also offers a consumer VoIP service through its Packet8 brand and earlier this year released an international calling application for mobile phones offering very cheap international calls. Release

ALSO NOTED: Juniper and Cisco switches reviewed;new mobile VoIP patent; and much more...

Mon, 03 Mar 2008 06:59:52 -0500

> Juniper disappoints, Cisco pleases Podcast

> i2Telecom wins portable VoIP patent Article

VoIP Inc. defaults on Verizon $8 million

Tom Burton — Mon, 25 Feb 2008 06:59:54 -0500

VoIP Inc. has issued an 8-k SEC advisory admitting it failed to make a Feb. 1 payment to Verizon and that Verizon has declared VoIP Inc. to be in default of an $8 million settlement agreement. VoIP Inc. also admitted Verizon has rights over all the companies assets if it choses to enforce and collect its remaining $7.4 million owed. "Such actions if pursued by MCI and permitted by the agreement would have a material and negative impact on the Company's financial condition, and would impair the Company's ability to continue its business," the company said.

The statement about impairing the company's ability to continue business must be a candidate for bad joke of the year. No customers, no network, no web site, no staff to answer the telephone, no chief accountant or technical officer. VoIP Inc. is now but a shell. But amazingly the company still trades on and for less than a penny you can still buy shares in VoIP Inc. The company literally self-destructed over the last month. Despite a last minute PR blitz claiming its click-to-call technology was worth a cool $1.25 billion, VoIP Inc. is just awaiting burial.

Whether Verizon ever sees any of its money is another thing. A poster purporting to be former chief accountant Robert Staats told investors on a forum that the private equity investors who threw money at the company when it was in its final death roll have superior rights to everyone.

For more:
- VoIP Inc.'s latest 8-k statement
- Investorhub has been a forum for investor, vendor and ex-employee discontent

Related articles:
VoIP Inc. goes down owing Verizon $8 million Report
VoIP Inc. claims $1.25 billion patent Report

Exclusive: VoIP Inc. to take $24 m. hit as it closes network and loses staff

Tom Burton — Thu, 07 Feb 2008 16:15:42 -0500

VoIP Inc. has closed down its call termination and network operations laying off 25 engineering staff and has told the SEC it is expecting to have to write off $24 million in losses associated with the network. The Florida based company said it would focus on its patented pay-per-call ad software. The announcement comes only a day after the company announced deals with Google and eBay for its pay-per-call ad software.

In its 8-k statement to the SEC filed today VoIP Inc. said: On February 5, 2008 VoIP, Inc. (the “Company”) decided to reorganize its operations to focus primarily on business opportunities associated with its patented technology including “click-to-call” and “pay-per-click” applications."

"Associated with that decision, on February 5, 2008 the Company suspended all of its telecommunications network operations including all current revenue generating operations. The Company also reduced its workforce by 25 persons, eliminating most of its network operations and software engineering staff."

"The Company is currently entertaining offers on the sale of its network, and has not yet evaluated the potential financial statement impact of related impairments of its tangible and intangible assets. However, a material non-cash asset impairment charge ranging up to $23.9 million to the Company’s consolidated 2007 results of operations is likely. "

VoIP Inc. has a colourful history and was previously known as Millennia Tea Masters Inc.. The company was formed by Steven Ivester a serial entrepreneur from Florida who according to Light Reading is a convicted felon. VoIP Inc. had ambitions to take on VoIP retail giant Vonage and in 2004 launched a service known as eGlobalphone. It said at the time its goal was to sign up 2.3 million business and consumer customers by 2007.

The shut down of its network operations follows the closure of VoIP provider Sunrocket. It comes as Vonage continues to be under scrutiny ahead of its Q4 earnings next week. Vonage has paid out $240 million in patent settlements and has sought to stabilise its costs ahead of a critical bond refinancing due later this year.

VoIP is listed on the OTC market and only recently refinanced through a $2.5 million private placement . In a statement December 27 CEO Tony Cataldo, said: “We are pleased that the existing investor group recognized the significant progress we have made over the past year, and elected to provide additional capital to support our growth.”

“During the past year, we have expanded our network, increasing the minutes carried over it substantially. This has resulted in improved operating results, a trend we expect will continue throughout 2008. This financing will allow us to support higher levels of activity over our network and to continue to invest in maintaining and expanding it.”

VoIP Inc. was trading at a high of $8.40 only a year ago, but its stock price has collapsed and yesterday its stock price had bottomed to one penny.

On Wednesday there was a posting to a Google forum claiming VoIP Inc's VoiceOne web site had been hacked. An attached screen shot showed the site had been tampered with and text written into the home page. The text said "The VoiceOne incorporates a keen ability to run out of funding and an unusual desire to line the pockets of only certain people." Underneath the Features Products/Services the following text was also written, "Our suite of services is complemented by a lack of funding."

For More:
- VoIP Inc. threatens patent action Report
- Steven Ivester also got caught up in some Bad Medicine

8X8 gets serious about Mobile VoIP

Mon, 14 Jan 2008 06:59:56 -0500

Most aggressive of last week's CES mobile VoIP announcements was the offer by U.S. provider 8X8 Inc. of a free trial of its new mobile talk application for U.S. consumers.

The Packet8 mobile application automates the calling process and offers 3-5 cent a minute type calling rates to most international landlines and around 16 cents a minute to mobiles. Consumers simply text "MobileTalkCES" to 1-408-386-4137 to get the free trial service. There is also a website sign up, but that involves getting various codes out of your mobile and is clunky and not friendly to use.

Once the application is downloaded the caller simply dials any international number and the service takes over the call using 8X8's network. Call quality from my small survey is as good as switched calls and makes calling cards and web based services look very yesterday.

The Packet8 trial offers two dollars of free calls--which is equal to about an hour of landline call time to most places--so it will be intriguing to see just how many subscribers the big, publicly listed U.S. VoIP provider can convert. 8x8 is the second largest pure play VoIP provider in the U.S.

For More:
- Packet8 offers free trial of mobile VoIP service Release

Related articles:
Mobile services to drive IP comms Article
8x8 gets another patent Article
8x8 to take 12,000 subscribers from exiting firm Article

Vonage working for image makeover

Thu, 10 Jan 2008 06:59:55 -0500

This year will be the make or break year for pure play VoIP giant Vonage with its viability in the hands of its bankers who have to agree to refinance its significant debt. Vonage handed out most of its IPO cash on patent settlements to the horde of telcos that decided the best way to compete with VoIP was through the courts.

In December, some $250 million of Vonage's debt will come due for repayment. While the owners of those convertible notes can exchange them for stock, the stock is now trading in a $2 range compared with a high of $13.33 when it floated back in 2006, making it highly unlikely the lenders will accept anything but cash.

A betting person would punt on a telco bail out--Sprint does not have a residential wireline business. But in the meantime Vonage is getting on with better looking after its customers and this week announced at CES its "My Vonage" product strategy. This is Vonage's attempt to move away from the discount price trap it has fallen into and instead promote the rich feature set that comes from IP comms.

First announcement is a device called V-Portal. According to the release V-Portal is "a digital voice adapter and single port router with a built-in liquid crystal display, and contact book, an innovative one-stop communication hub with useful features such as group calling and voice activated dialing." It is being heavily rebated to new Vonage users and is on sale at $9.99 (plus a $30 activation fee for the privilege of having Vonage turn on the device!)

For more:
- Vonage to launch V Portal Release
- Vonage kicks off My Vonage strategy Article

Related articles:
Can Vonage do it? Article
Vonage still top VoIP carrier Article

Vonage loses patent appeal

Mon, 19 Nov 2007 06:59:58 -0500

Vonage has lost its patent appeal to Verizon and will pay an additional $37.5 million on top of the $80 million Vonage handed over to the telco giant. Vonage has paid out patent settlements to Sprint, AT&T and now Verizon to a tune of $240 million. Vonage had paid Verizon $80 million with an agreement to pay an additional $37.5 million if a federal court declined to hear an appeal. The court Thursday declined Vonage a hearing.

"We were not surprised, but disappointed, that the court denied our request for a rehearing of the case," a Vonage spokesman said. "We are pleased to continue putting litigation behind us and keep focusing on our core business." Vonage is very focused on getting its operations in order so it is not burning cash. It's precariously balanced with liabilities of $729 million compared with assets of $666 million. CFO John Rego told analysts at the Q3 call Vonage would have about $54 million in cash at the end of Q4 which is thin when you have that much debt and every new customer costs over $200. Founder and newly returned CEO Jeffery Citron says dealing with Vonage's debt issues is the company's number one priority.

More Reports:
- What's $40 Million Among Friends? Report

Related articles:
- Vonage settles with AT&T; vows positive cash in '08 Report
- Vonage learns how tough the telcos are Report

VoIP patent landscape explained

Mon, 19 Nov 2007 06:59:56 -0500

Over at Ike Elliott's Telecosm blog he has put together an excellent summary of the VoIP patent landscape and who owns the estimated 1,000 patents claimed to operate in the VoIP sector. According to Elliott, Stanford, in fact, had the first-ever VoIP patent in 1981. Cisco these days has the most VoIP/internet telephony patents with 161 patents, followed by Nortel with 156 and AT&T with 145 patents.

How a relatively simple technology like VoIP can have so many patents associated with it says a lot about whats wrong with the U.S. patent system (a view no doubt shared by Vonage).

As Elliott explains: "Having a large portfolio of good VoIP claims can really help you preserve freedom to operate a VoIP service, since you can cross-license your patents with other patent holders instead of paying royalties to each other."

Patents can be easily checked using the Google patent search or the U.S. patent office site.

More Reports:
- The VoIP Patent Landscape Report

Related articles:
- Is Vonage the victim of a bad patent system? Report
- Vonage seeks review of patent appeal Report

8X8 gets another patent

Thu, 01 Nov 2007 07:59:54 -0400

8x8, Inc., the originator of the Packet8 Voice over Internet Protocol (VoIP) and video communication services for business and residential customers, has been issued U.S. Patent No. 7,289,491 for an arrangement and method of Internet telephony. 8x8 said the invention covered by the patent relates generally to an arrangement that includes a telephone and an interface unit which interfaces the telephone to both a standard switched telephone communications network and an Internet communications network.

Since its establishment in 1987, 8x8 has been awarded seventy (70) United States patents covering a variety of voice and video communications and storage technologies.

For more:
- Read the release

Related Articles:
8x8 signs up 19,000 ex-SunRocketers Report
Packet8 profit not due to consumer VoIP Report