US appeal court partially upholds patent ruling against Vonage

November 13, 2007 by Andrea Lie

   In this age where the advancement and innovation of science and technology
is heavily sought after as an ideal, and the “progress of science”
specifically promoted by the US Constitution, it seems altogether
inappropriate that Verizon was able to sue Vonage for damages amounting to
US$58 million for infringing 3 of its patents that should not, in an ideal
world, even have been approved. Though the trial court’s decision is only
partially affirmed, and damages and future royalties vacated for now, it
seems that the issue at hand reveals a systemic problem with the US patent
process that delves deeper than throwing the blame back and forth between
the two market players.
  The question to ask then is, should these patents even have been approved
and validated so that companies like Vonage are vulnerable to lawsuits on
every front? The discussion here will thus assess what the law is in its
current state and what it ought to be. Accordingly, whilst acknowledging
that all the points to be discussed are inter-related, and without going
into technical detail about the inner workings of the Voice over IP
process, this discussion will first address the claims in the 3 patents
and why they should not even have been approved, before addressing the
systemic problems of the US patent process and its consequences, and
lastly, how this differs from the original purpose of a patenting system.
  The three patents that were allegedly infringed cover devices that allow
users to connect to Internet telephony services wirelessly, and servers
that translate between Internet addresses and phone numbers. Though the
concept of converting between an IP address and a phone number, and
sending voice over IP seems obvious enough (very much akin to streaming
videos over IP) and also a natural progression of technology, the US
patent office still awarded patents despite the “non-obviousness” element
that patents should satisfy.  To begin with, this should not even have
been considered an “invention”, and then to assign absolute rights to an
idea that is reasonably obvious just doesn’t seem appropriate.
  Furthermore, the claims in the actual patents appear to be overly broad in
scope. These claims include a public, wireless or cordless gateway setup
for wireless VoIP and a method that any VoIP phone uses to make its
presence known. Now, the use of any VoIP telephony device from any WiFi
Hotspot would be an infringement of this patent. The ideal of the patent
process is to frame a patent narrow enough to allow room to invent around
it and to encourage the advancement of technology, yet broad enough to
protect inventions. However, it seems that no balancing act took place in
this case. 
  Unfortunately, it seems that to allow this case is to allow Verizon to
squeeze other telephony competitors out of the VoIP market. Their aim
seems to be to stifle competition, create a monopoly, and to discourage
improvements in this area of technology. These lawsuits are the result of
the accumulation and stockpiling of patents on a first come first serve
basis, initially to cover more ground thereby increasing the chances that
one’s competitors might be caught by one of their many patents, and
ultimately, to monopolize the market. In effect, the patent system allows
the bigger players to enter into a race that clearly, the smaller players
can never hope to compete in.
  Originally the patent system was meant to represent a contractual
relationship between the inventor and the State, whereby the State grants
a monopoly of a certain number of years to the inventor in exchange for
disclosure. This way, innovation, invention and public disclosure is
promoted, and the public is provided with the scope of the monopoly
rights, and an opportunity to improve upon or design around such openly
disclosed patents. However, in the case of Verizon against Vonage, the
patents that Vonage allegedly infringed should not have been considered
“inventions” as they really didn’t present anything new, and even if they
were considered to be so, the patents themselves were so broadly worded so
as to make it almost impossible to work around them.
  Perhaps, it is about time that the liberal American notion of “invention”
be narrowed to protect the integrity of the patenting system, and about
time that “a way or method of doing business” in U.S. Patent Law be
revised to patent devices only, thus preventing larger market players like
Verizon from abusing the system.

  1. One Response to “US appeal court partially upholds patent ruling against Vonage”

  2. Having a concern for market access is certainly commendable but, in this case, inappropriate. Just a few days earlier, Vonage had also been found liable for willfully infringing six patents held by Sprint for technology also relating to VoIP. Moreover, a month earlier, Vonage had created what they termed ‘workarounds’ for the patents at issue. What this shows is not that Vonage was a victim of broad monopoly protections, but that Vonage was simply lazy and wanted access to the fledgling market to make a quick dollar. It demonstrates that the patent registered by Verizon was not so broad as to ‘stifle competition, create a monopoly’ or ‘to discourage improvements in this area of technology,’ but rather that Vonage was unwilling or unable to bring to market a new, original, useful product that would not infringe the monopoly that society had granted to Verizon for their technological advancement.

    Do not get me wrong, I think this whole situation is rather silly as well. Vonage will be spending over $120 million in damages in these two suits and that does not even include the legal fees that I am sure were extravagant on both sides. This money could have easily been spent on more important things like R&D or charitable pursuits (in thanks for the patent system that has generated so much wealth for them). But in the end Vonage surreptitiously exploited technology that we as society gave monopoly rights over to Verizon. For this they had to be punished!

    By Jeffrey Kukla on Nov 28, 2007

You must be logged in to post a comment.