TELECOM Digest OnLine - Sorted: Vonage Files to Vacate Patent Ruling

Vonage Files to Vacate Patent Ruling

Paul F. Roberts, Reuters (
Tue, 01 May 2007 20:00:03 -0500

by Paul F. Roberts

Internet based phone company Vonage says a ruling by the U.S. Supreme
Court this week has given it new life in a crippling lawsuit with
telecommunications giant Verizon.

Vonage asked the U.S. Court of Appeals in Washington D.C. on Tuesday
to vacate and remand a U.S. District Court's judgement and injunction
against it in a patent dispute with Verizon.

"Vonage has asked the appeals court to send the decision back to the
lower court to retry the invalidity case based on the Supreme Court's
disavowal of previous rigid standards for determining when an
invention is obvious to warrant patent protection," Vonage said in a
statement in response to requests from InfoWorld for comment on the

On Monday, the U.S. Supreme Court ruled unanimously in favor of more
stringent standards for granting new patents in a case brought by KDR
International, a Canadian manufacturer, against Teleflex, which held a
patent for a kind of automobile throttle control.

The ruling was widely seen as a rebuke from the high court to
patent-friendly rulings from lower court that made it hard to reject
new patent applications on the grounds that they were merely "obvious"
combinations of existing technology.

Vonage said it was pleased with the high court's decision, which it
said mean that "the obviousness question should not be determined in a
narrow, rigid manner that denies common knowledge, but rather should
incorporate a more expansive and flexible approach that allows for
consideration of common sense when assessing whether an invention is
ordinary or obvious, and thus ineligible for patent protection."

"Vonage is confident this ruling should have a positive impact on its
case," the company said.

In particular, Vonage argued in its brief on Tuesday that the validity
of Verizon's name translation ('574 and '711) and wireless ('880)
patents should be retried by the U.S. District Court in light of the
U.S. Supreme Court's April 30, 2007 decision.

"We are very encouraged by the Supreme Court's decision and the giant
step it represents toward achieving much-needed patent reform in this
country," said Jeffrey Citron, Vonage chairman and interim chief
executive officer. "The Supreme Court's decision should have positive
implications for Vonage and our pending patent litigation with
Verizon. We are also hopeful that this case will protect legitimate
innovators and the value of their inventions, unlock the innovation
process, and provide that companies are better able to conduct
business without the encumbrance of meritless patent claims."

Vonage has been fighting for its survival since June, 2006, when
Verizon filed a lawsuit in U.S. District Court claiming infringement
of VoIP patents Verizon claimed. In March, ajury ruled that Verizon
had infringed on the Verizon patents and ordered the company to pay
$58 million in damages and royalties to Verizon. A judge slapped
Vonage with an injunction later that month that barred the company
from signing up new customers until the patent dispute was settled,
though a permanent stay of that injunction was granted in April until
Vonage's appeal could be heard.

Eric Rabe, spokesman for Verizon, said the company took a dim view of
Vonage's claim: "Our take is that there's no merit to their motion.
This is just a delaying tactic."

Verizon will also file a motion in court tomorrow. Rabe said that the
KSR case decided by the Supreme Court and the Verizon Vonage case are
not related. "They're entirely different issues," he said. Vonage's
attempts to argue that Verizon's patents are invalid have failed in
court before, and would fail on appeal also, Rabe said.

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