Wednesday, September 26, 2007

Vonage Verdict Upheld Amidst Claim Construction Differences

"We have made clear the methods by which claims must be construed. "

- Judge Michel, dissenting-in-part,

Verizon Services Corp. v. Vonage Holdings Corp. (2007-1240), September 26, 2007

Verizon successfully sued Vonage for infringing 3 patents related to IP telephony, and was awarded $58 million of compensatory damages, a 5.5% royalty rate on any future infringing sales, and an injunction barring Vonage from using certain methods and devices. Vonage appealed, arguing that (1) the lower court improperly construed the claims, (2) the injunction was unwarranted, and (3) the judge's instructions on obviousness didn't square with KSR.

On claim construction, the majority opinion upheld the construction on all the patents, except for one patent, where the CAFC found that the patentee disclaimed subject matter through argument during prosecution.

We have held that a statement made by the patentee during prosecution history of a patent in the same family as the patent-in-suit can operate as a disclaimer. Microsoft Corp. v. Multi-tech Sys., Inc., 357 F.3d 1340, 1350 (Fed. Cir. 2004) . . . The applicants gained allowance of the claims of the [] application after stating that the prior art systems "all appear to be directed to non-localized systems," and that the "present invention," by contrast, was "restricted to operate within a few feet from a base station (i.e. wireless handsets)." . . . We think that this language clearly disclaimed coverage of systems operating with a range greater than a "few feet," and that the district court erred in failing to construe the localized system as requiring a range of a few feet.
Notably, Judge Michel dissented from the disclaimer ruling and stated that the entire judgment should be affirmed. Judge Gajarsa dissented from the claim construction of one of the other patents-in-suit, and thought a remand was necessary. Of the three patents, only one managed to get a unanimous claim construction from the bench.

Regarding the injunction, the CAFC found no error in the district court's ruling which relied on the eBay v. MercExchange factors. In a footnote, the court added the following comment:
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 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.

Finally, Vonage challenged the district court’s instructions to the jury on obviousness concerning the need to find a "suggestion in the prior art to combine the elements." The CAFC noted that, since only one reference was being considered on the patents in question, the error in those cases was harmless:
[W]e note that there cannot be prejudicial error with respect to the ’574 and ’711 patents because Vonage does not dispute that the obviousness testimony at trial centered on a single reference ["Jonas"], and thus any alleged error in instructions requiring a finding of motivation to combine several references would have been harmless.

5 Comentários:

Julie said...

Pity that this debacle is giving the entire VoIP segment a black eye because there are great companies out there that focused on the technology and not the “sizzle”. Hey, I liked the Vonage commercials as much as the next guy, I only wish they had spent more time and money making sure they had the rights to use the technology they did. I still like the idea of VoIP and finding alternatives is hard because I don’t want to be stranded like many Sunrocket customers were recently. It seems there are good alternatives like Net2Phone and Lingo, but it is really too bad that such a high profile provider will probably set this whole category back in people’s minds

Anonymous said...

Hi Guys,

Excellent blog. Your blog has caught my attention as I was looking for information about Vonage. I found it is very interesting that most of the posts on the internet for vonage are vonage complaints

What do you guys think about it?

William said...

I started with Vonage, just like anyone, with the excitement of a new age phone company that treats their customers very well, and doesn't rip them off.

skip forward in time to present day...

I just got told by Vonage customer service that I couldn't get 13 months of back billing from them that they charged me for a phone I hadn't been using since may of 2007.

I lived in Seattle at the time with my wife who was in the military, she was moved to Louisiana due to a change of station, so I cancelled my account prior to leaving... being that we knew we were going to move around a lot we didn't start online service so seeing any charges to our checking account was difficult, being that we moved we didn't receive our account info until November of 2007 (in Bulk I might add) and still really didn't notice due to so much happening in our lives at the time, then in February/March of 08 I see charges from Vonage on our account, I call them and they told me that it's no problem sir you can get all of that money back being that we can see you didn't use your phone, BUT you will have to talk to our cancellation dept to cancel your account... needless to say, I had a horrible time working around their hours, being mine are so long, that it took me till June to call to cancel, but I wasn't worried "I could get all of my money back, being that they could see that I didn't use their phone for over a year"...

Nope... instead I got an offer to receive 10 dollars off service for a year, ooooooo I get 120 dollars of my hard earned money back. Vonage blows and is a major rip off, and I will see to it that everyone knows about it.

William A Carpenter

William said...

I started with Vonage, just like anyone, with the excitement of a new age phone company that treats their customers very well, and doesn't rip them off.

skip forward in time to present day...

I just got told by Vonage customer service that I couldn't get 13 months of back billing from them that they charged me for a phone I hadn't been using since may of 2007.

I lived in Seattle at the time with my wife who was in the military, she was moved to Louisiana due to a change of station, so I cancelled my account prior to leaving... being that we knew we were going to move around a lot we didn't start online service so seeing any charges to our checking account was difficult, being that we moved we didn't receive our account info until November of 2007 (in Bulk I might add) and still really didn't notice due to so much happening in our lives at the time, then in February/March of 08 I see charges from Vonage on our account, I call them and they told me that it's no problem sir you can get all of that money back being that we can see you didn't use your phone, BUT you will have to talk to our cancellation dept to cancel your account... needless to say, I had a horrible time working around their hours, being mine are so long, that it took me till June to call to cancel, but I wasn't worried "I could get all of my money back, being that they could see that I didn't use their phone for over a year"...

Nope... instead I got an offer to receive 10 dollars off service for a year, ooooooo I get 120 dollars of my hard earned money back. Vonage blows and is a major rip off, and I will see to it that everyone knows about it.

William A Carpenter

Chase said...

I find your blog very interesting. I have heard that Vonage is a commercial voice over IP network. Vonage Corporation provides telephone service via a broadband connection. The clients if Vonage claim they are far from being satisfied with the company and the services it provides. They say it is a corrupt company because they demand payment for the services the customers did not offer. That is what I have learned from www.pissedconsumer.com.

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