By Andrew Noyes
(Wednesday, May 30) Internet telephone company Vonage filed its final round of paperwork in a patent-infringement case brought by Verizon Communications. The company's 36-page reply brief to the Federal Circuit Court of Appeals came three weeks before oral arguments are slated to begin.
Verizon sued Vonage last year alleging the firm infringed seven patents. But prior to trial, two claims were dropped. Of the five that remained, the court ruled favorably for Vonage on two claims and left three to be fought over in the appeals court. In April, the court set an expedited schedule for reviewing the case.
In its brief, Vonage asked the court for a new trial because it said it believes the district court erred in its original decision. The company also argued that the Supreme Court's recent ruling in KSR International v. Teleflex, which changed the patenting process's "obviousness" standard, could have changed the case's outcome.
The appeals court denied an earlier retrial request made by Vonage in the wake of the KSR ruling. Analysts with the investment firm Stifel Nicolaus said at the time that they believed Vonage had "not yet made a sufficient argument to justify a new trial."
In Verizon's most recent filing in April, it urged the court to reject Vonage's obviousness challenge, saying KSR did not give the firm "a second bite at the apple." The high-profile Supreme Court case "could not reasonably have blind-sided Vonage," Verizon said.
The high court agreed to hear the case involving rival automobile gas-pedal manufacturers in June 2006 -- about the same time Verizon filed its suit against Vonage. KSR "was fully briefed and argued well before the trial in this case," Verizon said.
Meanwhile, Vonage Chairman Jeffrey Citron told shareholders during a conference call on Tuesday that his company is confident it will overcome the patent spat. Workarounds for two contested patents have been created and a third is in the works, he said.
The already formulated fixes pertain to a pair of patents that would impact an Internet-based phone service's ability to provide features like call waiting and caller identification for transmissions over the public switched telephone network and the public packet data network.
The infringement claim that does not yet have a workaround involves localized wireless gateway systems that link cellular handsets to Internet-based phone services. Citron said finding a solution "will take some time" but rollouts for the other fixes are "under way."
Although the workarounds are not mentioned in Vonage's brief, the firm argued that consumers desire "low-cost, technologically superior telephone services" and an injunction "would not promote the patent system's interest in fostering innovation."
Furthermore, Verizon has not promoted Internet-based telephony as an alternative to its "more profitable traditional landline service," Vonage said.
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