Why Doesn't Verizon Pick On Somebody Their Own Size?

I had a comment on yesterday's post about the validity of Verizon's VoIP patents, asking why Verizon sued Vonage, rather than the gatway-manufacturer Cisco, or softswitch manufacturer Broadsoft?  This is one of the easier questions on the "Big List of VoIP Patent Questions" post from a few days ago, so we'll tackle it today.

How does a patent holder decide who to target?  They usually consider the following:
1. Are we pretty sure the target is infringing our patent?
2. Are we infringing any of the target's patents?
3. Can we win a lawsuit if it goes to court?
4. Is it important to maintain positive relations with the target?
5. Is the target a competitor that we would like to impair?

In the case of Verizon and Vonage, they came up with the right answer to all of the above questions.  Verizon was pretty sure Vonage was infringing.  My searches on the patent search engines didn't turn up any patents that have been granted to Vonage (at least, not yet), so Verizon was pretty confident they wouldn't run into a counter-suit.  Verizon knew they had a good chance of winning in court because they could afford really good lawyers, and maybe Vonage wouldn't hire really good lawyers.  Most importantly (to Verizon), Vonage was a sworn enemy and Verizon liked the idea of impairing Vonage's business.  Check marks on all the criteria.

Compare this checklist to Cisco, now.  Cisco may be infringing Verizon's patent, check.  However, Cisco has one of the largest VoIP patent portfolios in the industry, and Verizon is probably infringing a bunch of those patents, so a counter-suit would be probable.  Cisco can afford great lawyers, so Verizon might not win in court.  Cisco is a big supplier to Verizon, so Verizon would want to maintain good relations there.  And Verizon has no reason to want to hurt Cisco's business.  Only one check out of five, so it's not likely that Verizon would sue Cisco.

If you do the same analysis with softswitch-maker Broadsoft, you'd find some similar results.  Broadsoft has a couple of patents (6,625,274 and 7,213,073), and Broadsoft is a supplier to Verizon (see Broadsoft's home page).  Broadsoft might not be able to afford as much legal counsel as Verizon, but with only two checks out of five, Verizon has no reason to pick a fight with Broadsoft.

Another competitor in the consumer VoIP market, Packet 8, has a dozen US patents.  They wouldn't be an easy target, either. 

The painful truth for Vonage is that they were a big, easy target, and didn't pay enough attention to protecting their business with key patents.  I'm sure they've learned their lesson now, but is it too late?

Comments

[Greg]

What does 8x8 have to offer in the patent area of VOIP?

Any thoughts?