SIPphone legal
Information on SIPphone's False Advertising Lawsuit against Vonage Holdings Corp
On Monday, September 27, 2004 SIPphone, Inc. filed a false advertising suit against Vonage Holdings Corp. or New Jersey in the San Diego County Superior Court on behalf of customers who have or could fall victim to deceptive packaging and advertising.
Why did we decide to sue Vonage?
SIPphone believes that it is both anti-competitive and harmful to consumers to sell otherwise SIP-standard hardware that has been intentionally locked to their service without clearly communicating to consumers prior to purchase. In this case, Vonage has paid the manufacturer of the device to use software to cripple the Internet phone adapter to only work with the the Vonage service. As Vonage's service requires a minimum monthly service fee, consumer are forced to pay service fees running hundreds of dollars a year for the otherwise inexpensive VoIP hardware to work in any capacity today or at any point in the future.
This practice of locking hardware is an exception in the industry. Furthermore, on package messaging such as "No Monthly Contract Required" further deceive consumers who learn after buying that the unit will not function in any capacity without paying a monthly fee, which acts as a de facto monthly contract.
What we are asking from the court:
- Vonage and its retail partners must clearly disclose on all product advertisements, catalog listings, in store promotional material and displays, and product packaging that units are restricted to Vonage's pay service.
- Vonage and its retail partners must clearly disclose on all product advertisements, catalog listings, in store promotional material and displays, and product packaging that Vonage's minimum required monthly service fee runs $180 a year, plus fees and taxes.
- Vonage and its retail partners must clearly disclose on all product advertisements, catalog listings, in store promotional material and displays, and product packaging that the unit they are purchasing can not be used with a competing service, out of the box and at no time in the future.
- Vonage and its retail partners must contact all existing customers of offending hardware and offer a full refund or an 1-for-1 exchange for an unlocked version of the Internet phone adapter.
SIPphone has not requested for any monetary damages from Vonage, other than requiring them to cover the legal costs of the suit, which is standard in these cases.
Additional Resources and Links:
SIPphone's Lawsuit Press Release
Michael's email to SIPphone customers about the case
Suit Filing (PDF)
Scans of offending packaging (Front) (Back) (Sides) (Top and Bottom) (Description)
Screenshots of offending listing with a leading online retailer (1) (2)
User Forum Topic on the Lawsuit
Legal Description of "False Advertising"
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