Vonage Asks for Retrial in Verizon Case

Following a U.S. Supreme Court ruling Monday that called into question the patentability of "obvious" inventions, Vonage on Tuesday asked a federal appeals court to vacate a ruling that it infringed on Verizon's voice over IP patents and send the case back to the U.S. District Court for a retrial.

The Supreme Court decision came as part of KSR v. Teleflex; justices ruled in favor of KSR saying Teleflex's patents on electronic sensors in accelerator pedals were too obvious. In addition, the court said the Federal Circuit Court had recently too quickly sided with patent holders.

In a separate ruling Monday, the nation's high court also found in favor of Microsoft in a lawsuit filed by AT&T. Microsoft asserted that software coupled with the device on which the software is installed cannot be considered patentable.

Although Vonage continues to maintain it did not infringe on Verizon's patents, the company is also claiming that the name translation ('574 and '711) and wireless ('880) patents should not be considered valid and thus not eligible for protection under the law. Vonage believes the Supreme Court ruling should force the lower court to more fully examine Verizon's parents.

"Everyone knows you can't patent an orange, but you can - and someone likely already does - hold the patent for an orange picker," said Vonage's chief legal officer Sharon O'Leary in a statement. "According to the Supreme Court's ruling, if you patent an orange picker, and then someone else comes along and puts a glove on it to protect the oranges against bruising, you can't patent this new invention as "novel" as it is just an obvious improvement of the original invention."

Verizon sued Vonage in June 2006, accusing the fledgling voice over IP firm of knowingly infringing on seven patents related to functionality such as call forwarding and fraud detection. Vonage said it never knew of the patents and was not approach by Verizon until the lawsuit.

A jury agreed with Verizon in early March, awarding the company damages of $58 million in addition to a 5.5 percent royalty on all future Vonage sales. Some good news for Vonage arrived last week, when the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. issued a permanent stay of an April 6 injunction that would have barred the company from signing up new customers.

For its part, Verizon said it was not concerned with Vonage's request for a retrial. It characterized the move as a delay tactic, and was confident the motion would be denied.

"We are very encouraged by the Supreme Court's decision and the giant step it represents towards achieving much-needed patent reform in this country," remarked Vonage interim CEO Jeffrey Citron. "The Supreme Court's decision should have positive implications for Vonage and our pending patent litigation with Verizon."