Dark days at Vonage

The permanent injunction Verizon won against Vonage comes at a time when VoIP has moved firmly into the mainstream. It's unlikely the legal issues between the two companies will derail VoIP's adoption, but it seems certain to seriously impact Vonage.

The real question, though, is whether lawsuits such as Verizon's are likely to pop up elsewhere and affect other companies or whether Vonage can appeal the initial judgment and get a reversal. At last week's VON show, patent attorneys predicted that will be the case and pointed out that Verizon itself has already been sued over VoIP patents by a company known as Web Telephony.

This is happening even as both businesses and consumers are realizing the very real benefits of VoIP and the VoIP industry is growing substantially. The worst-case scenario for the industry is for consumers to get worried about VoIP and flee back to other services -- but that seems highly unlikely.

What is more probable is that consumers and businesses will be looking for alternative VoIP providers who seem safe and stable. That bodes well for the cable industry, which isn't marketing its digital phone service as VoIP even though that is the underlying technology, and for facilities-based competitors in the business world as well.

The company that will suffer most is undeniably Vonage, the firm that pioneered VoIP and on whose coattails the industry was created. Company officials issued a statement Monday saying Vonage is still very much alive and if it can't get a stay of last Friday's injunction, will immediately implement a work-around.

Legal fees and the looming $58 million penalty Vonage could be forced to pay can only further sap a company known for overpaying to acquire customers. With less cash to buy commercials and the real likelihood that customers will flee in panic, Vonage is the real victim of the patent mess of VoIP.

E-mail me at cwilson3@telephonyonline.com.