No doubt, Facebook is one of the internet's hottest startups. The company has raised gobs of venture capital, has deals with companies like Microsoft (NASDAQ: MSFT), and is often rumored to go public or be bought out.

The company's founder, Mark Zuckerberg, is just in his early twenties, fresh from Harvard. Over the past few months, several of his recent classmates have made claims that they are the real owners of the Facebook concept.

Such disputes are very common for early stage companies. And it's also common for these companies to be sloppy in protecting themselves from legal claims.

So what can be done?

Continue reading Entrepreneur's Journal: Facebook's lessons on intellectual property

Entrepreneur's Journal: Facebook's lessons on intellectual property originally appeared on BloggingStocks on Sun, 09 Sep 2007 13:10:00 EST. Please see our terms for use of feeds.

This week, the U.S. Supreme Court threw a bucket of reality on the smoldering wreck of the U.S. Patent and Trademark Office. The overwhelmed office has been blamed for issuing ill-defined, overly broad, and sometimes downright absurd patents that have caused companies such as BlackBerry and Vonage enormous financial problems.

The issue is particularly volatile in the frenetic world of software and internet services. Witness the ongoing battle between eBay Inc. (NASDAQ: EBAY) and MercExchange over the "Buy It Now" technology, which has dragged on since 2000.

Another area of controversy is the patenting of business practices. The market has long suffered the assault of patent trolls that file applications for common practices, then attempt to squeeze cash out of companies who step on "their turf."

The precedent set by this case will raise the bar for patents by requiring the application to more completely demonstrate it is not an obvious, and therefore unpatentable, idea.

I'd like to see the same discipline imposed on the internet, to better deal with cybersquatters. How is it beneficial to us that a few individuals grab addresses that the average Joe would expect belong to thriving businesses, and hold them for ransom? As a business practice, it stinks. As a barrier to growing internet business, the practice is harmful. Can we sic the Supremes on them, too?

Supremes raise bar for patents -- finally! originally appeared on BloggingStocks on Sun, 06 May 2007 11:40:00 EST. Please see our terms for use of feeds.

The Wall Street Journal has noticed that Vonage (NYSE: VG) is fighting a PR campaign against Verizon (NYSE: VZ). The voice-over-IP company is trying to claim that Verizon's lawsuit over Vonage's use of its patented techology is really an attempt to shut the smaller company down.

From The Wall Street Journal: "In a series of full-page ads in several major newspapers in recent days, Vonage said it benefits consumers by providing competition to higher-priced phone service from Verizon. 'Now, Verizon has chosen to attack Vonage in the courts,' one section of the ad read. 'Why? Could it be all about the money?'"

Well, of course it is about money. VoIP products from Vonage and the major cable companies are taking millions of landline customers from Verizon and AT&T (NYSE: T) each quarter. Just one company, Comcast (NASDAQ: CMCSA) added 571,000 new voice customers last quarter. Those customers come from the phone companies. And, the Comcast service is now available to 35 million homes.

The large phone companies find themselves behind the curve. It will be another two years before their fiber-to-the-home networks are large enough to effectively compete with cable companies for bundled voice, TV, and broadband products. And there is no guarantee that they will be able to switch cable customers over.

It is all about the "Benjamins." Wall Street should not be surprised if Verizon eventually files patent suits against the cable companies as well. If the telecom firm owns the intellectual property, why should it let competitors use the technology against it.?

Douglas A. McIntyre is a partner at 24/7 Wall St.

Verizon vs. Vonage: round two originally appeared on BloggingStocks on Sat, 28 Apr 2007 17:18:00 EST. Please see our terms for use of feeds.

Vonage Holdings Corp. (NYSE:VG) got nudged toward its eventual oblivion today when a federal jury ordered the struggling internet phone company to pay $58 million plus monthly royalties to Verizon Communications Inc. (NYSE:VZ) for infringing on three patents.

Verizon also asked for a court order banning Vonage from using the disputed technology, according to Bloomberg News. Such a ruling would effectively drive Vonage out of business because it would leave it only able to handle calls among its customers.

Vonage's stock nosedived on the news. Trading has been halted as investors prepare to watch the company go down the drain.

This case is far from over. Vonage will probably appeal the decision, delaying the axe from falling for a while. But fall it will. As Vonage's obnoxious commercials grew in intensity, so did the competition from much bigger companies including Verizon.

The unlucky investors still holding Vonage's stock may get at least some of their money back if the firm is bought out by a telecommunications company or a private equity player. But don't hold your breath waiting for that to happen.

Still, internet phone service is here to stay even if Vonage may not be.

My wife and I signed up for Comcast Corp. (NASDAQ:CMCSA)'s digital voice earlier this month and so far haven't seen any difference in service quality. Comcast's triple play of services is saving us about $70 a month. There's no way that I would even contemplate going with Vonage.

Bye, Bye Vonage, it's been swell originally appeared on BloggingStocks on Thu, 08 Mar 2007 16:51:00 EST. Please see our terms for use of feeds.