After Losing One Appeal, Can Vonage Catch a Break?

With potentially debilitating results hanging over it as a result of losses against both Verizon and Sprint Nextel in patent infringement suits, VoIP services provider Vonage faces the prospect of either or both judges imposing injunctions against the company continuing to provide service.

But a footnote toward the very end of last week's partial remand decision by the Court of Appeals for the Federal Circuit, first found by University of Missouri law professor Dennis Crouch, could be interpreted as a little nudge - a suggestion from one court to another that could yet give Vonage a way out of its terrible predicament.

The footnote quite clearly says the appeals court might well have considered the argument that time should have been given to Vonage to implement a workaround to technology that was found to infringe upon Verizon's patents, if anyone had bothered to ask.

Prior to the footnote, the majority judges cited the case of eBay v. MercExchange in establishing the four basic principles underlying whether issuing a permanent injunction is fair. First, the infringed party must be severely injured; second, the damages must be beyond monetary compensation; third, it must be within the guilty party's power to be made to suffer by loss of equity; fourth, the public interest must not be disserved by an injunction.

Conceivably, the appeals court might have been open to hearing such arguments in favor of Vonage. The footnote reads in its entirety: "One factor that is relevant to the balance of the hardships required by the Supreme Court's decision in eBay was not considered by the district court, namely whether the district court should have allowed time for Vonage to implement a workaround that would avoid continued infringement of the '574 and '711 patents [the two which the appeals court upheld] before issuing its injunction. Verizon had a cognizable interest in obtaining an injunction to put an end to infringement of its patents; it did not have a cognizable interest in putting Vonage out of business. However, as Verizon points out, Vonage made no request for a workaround period to the district court, and Vonage has already had several months since the district court's judgment to implement a workaround."

While a lower court will re-hear the case of the one patent which the appeals court remanded, another federal judge in Kansas City, Kansas is now considering how best to punish Vonage for its infringement against Sprint, as determined by a jury there last week. If Judge John Lungstrom weighs the CAFC decision carefully, and reads every last detail - or better yet, if he reads Dennis Crouch's blog regularly - he may consider taking a little extra time to make up his mind.