Vonage Files to Vacate Patent Ruling

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 ruling.

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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