The Verizon - Vonage Decision

Transcription

1 Implications of the Verizon - Vonage Patent Infringement Judgment Overview The Complaint, Result and Next Steps in the litigation Scope of the Patents Implications of the decision and of various patents in VoIP space 1

2 The Complaint and Result Verizon sued Vonage for infringement of 7 patents in the Eastern District of Virginia Went to trial on 5 patents in < 1 year Jury found infringement of claims in 3 patents Infringed patents: (1) 6,104,711; (2) 6,282,574; and (3) 6,359,880. No infringement found on: (1) 6,137,869; and (2) 6,430,275. Verizon dropped U.S. Patent Nos. 6,298,062 and 6,128,304 just prior to trial Jury also found no claims of the 5 Verizon patents invalid 2 Result and Next Steps Damages: $58 million for past infringement; 5.5 % royalty on future sales Permanent injunction issued on March 23 Partial stay granted April 6, allowing Vonage existing customers but not new customers Emergency relief from U.S. Court of Appeals for the Federal Circuit granted on April 6 from injunction, subject to further review $60 million appeal bond and counting 3

3 Effect of Litigation on Enforcement of the Patents Patents become stronger through successful litigation Judge agreed with Verizon s interpretation of the scope of its patents at the Markman hearing Jury trial victory establishes the patents as relevant to VoIP community Verizon may be emboldened to enforce its portfolio against other players 4 and Relevancy Determination Sources of Interpretation 1. Patents, 2. Prosecution History 3. Dictionaries, 4. Markman Decision Are the patents relevant to you? 1. Determine the scope of the patents 2. Compare the properly construed patents to your system 5

4 USP 6,359,880 - Wireless Claims 1, 6, 7 and 8 found infringed Covers implementing wireless telephone communication in a packet switched network. Focus is on locating or registering a wireless telephone with a wireless gateway system and routing between a packet switched network and a wireless telephone 6 6,104,711 and 6,282, Name Translation Both patents found infringed 574 patent, claim 27 infringed (30 total claims) Infringed claim covers a 3 step method of 1. receiving a name translation request at a server coupled to a public packet switched network; 2. translating a name into a destination telephone number; 3. transmitting a reply containing the destination telephone number and packet address of a telephone gateway between the PSTN and the packet switched network. Court interpreted name broadly to include a telephone number or other identifier of a party Certain claims not explicitly limited to public networks 7

5 6,104,711 and 6,282, Name Translation 711 patent, claim 20 infringed (37 total claims) Infringed Claim covers a 3 step method of receiving a name translation request at a server coupled to a public packet switched network; executing a conditional analysis and translating the name into a first or second destination address based on the analysis; transmitting a reply containing the destination telephone number and packet address of a telephone gateway between the PSTN and the packet switched network. second destination address includes information relating to routing via the PSTN 8 USPs 6,137,869 and 6,430,275 Neither found infringed Cover call session management for authenticating a subscriber and routing calls in a hybrid circuit switched and packet switched network. They include in various aspects creating call records, tracking information like length and price of the call and techniques for least cost routing and fraud prevention. 9

6 USP 6,298,062 and 6,128,304 Dropped prior to trial Cover call forwarding in a packet-switched network to, for example, forward a call to voic when subscriber line is unavailable 10 How does this affect VoIP Players? Verizon asserts its patents are broadly relevant to VoIP Should obtain copies of the patents and assess relevance to operations Work with a patent attorney on matters of interpretation and applicability of patents Consider getting exculpatory opinions to have in the file to avoid willful infringement Consider contributory infringement issues when dealing with third parties 11

7 How does this affect VoIP Players? Check indemnities with vendors Consider design changes to avoid conflict Seek patents on design changes, innovations Collect prior art that is relevant, but not considered by the Patent Office 12 Other Portfolios? More patents are being asserted and litigated in the VoIP space The emergence of the industry invites these lawsuits Other Portfolios 1. Klausner Sued AOL seeking $200 million in damages Settled with AOL Litigating with Vonage now in ED Texas Patents cover visual and selective access to voic through a list 13

8 Other Portfolios? 2. Sprint Litigating with Vonage now 7 patents in portfolio, all in the same "family. They are generally directed to establishing paths through asynchronous transfer protocol (ATM) networks and allow switching through ATM fabrics on a call by call basis, as opposed to routing all traffic through permanent virtual paths. The patents are most relevant to the extent that VOIP traffic is routed through ATM networks or network segments. 14 Other Portfolios? 3. Rates Technology Litigating with several companies. Prefers to offer license/settlement, but sues quickly in ED NY if settlement breaks down Patents relate to least cost routing Widely licensed prior to VoIP Gerry Weinberger targeting VoIP players 4. Web Telephony Litigating against Verizon, Vonage, Sun Rocket and others in Texas Patent covers using web browser to selectively route calls 15

9 Conclusions Need to be aware of the portfolios Clearance of products and services is recommended to reduce risk Litigation risk has increased after the Verizon case and with increasing success of the industry 16