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Vonage and Patents

Jon Arnold teased me yesterday, saying that he had a story he wanted to break on his blog later about patents and Vonage.  Over lunch, Howard and I were speculating what it might be.  I suggested that it was perhaps a license, in order to make the Verizon problem go away.  After all, if you were Jeffrey Citron, and your stock was trading at less than half its IPO value, wouldn’t you be working hard to clear the decks, to make sure that any and all possible sources of investor anxiety were removed?

It turns out that Jon’s post is that Vonage, rather than licensing Verizon’s patents, is preparing a defensive strategy. With the acquisition of three enabling patents from Digital Packet Licensing, Inc they have signalled a preparedness to fight.  Depending on the price of the patents, it could be a good move. They now have currency to trade, if a settlement is possible, and weaponry to use, if not.  Moreover, it shows that they are taking a longer term view of intellectual property.  They will need a strong portfolio to defend against future claims, like the $180 million suit filed yesterday by Klausner over Vonage’s voice mail. 

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