Last year, Verizon milked $117.5 million from Internet phone upstart Vonage in a long, ugly patent war. This year, it’s going after its real rivals — the cable companies — with similar suits.
Over the weekend, Multichannel News reported that Verizon is suing Charter Communications (CHTR) for infringing eight Internet phone patents, including two that Vonage was busted for infringing. In January, it filed a similar suit against Cox Communications, a privately held cable company. Trade pub Light Reading says that the big cable companies all use the same Internet phone technology, called PacketCable, so if one company is infringing the patents, it’s possible that all of them are, like Comcast (CMCSA), Time Warner Cable (TWC), and Cablevision (CVC).
If Charter and/or Cox are found guilty of infringing Verizon’s (VZ) patents, we expect the cases to move along the same way Vonage’s did: An up-front settlement and a technology workaround that lets the cable companies deliver Internet phone service without violating any patents. (It’s doubtful any of the cable giants would have to stop selling phone service.)
The big difference: the nearly $120 million that Vonage (VG) had to pay was 15% of the $800 million in revenue the upstart reported over the last four trailing quarters (Q4 2006 through Q3 2007). Charter, meanwhile, reported sales of $5.9 billion during that period.
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