We have generally tried to focus on the fundamental issues of access to ICT infrastructure, and not the esoteric issues of Internet governance. However, after two and half years, we are beginning to think of broadening the scope a little. The anti-competitive uses of intellectual property have so far been discussed on this blog only in relation to attempts to claim a patent on the way the Sinhala language is standardized for the computer. Here is another aspect.
Vonage developed one of the first Internet telephone services and has attracted more than two million customers. But last year, Verizon — one of Vonage’s biggest competitors — sued for patent infringement and won a verdict in its favor in March.
The Gates memo predicted that a large company would “patent some obvious thing,” and that’s exactly what Verizon has done. Two of its patents cover the concept of translating phone numbers into Internet addresses. It is virtually impossible to create a consumer-friendly Internet telephone product without doing that. So if Verizon prevails on appeal, it will probably be able to drive Vonage out of business. Consumers will suffer from fewer choices and higher prices, and future competitors will be reluctant to enter markets dominated by patents.
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