Court Rejects Vonage New Trial Bid

A federal appeals court late Wednesday rejected Vonage's motion for a new trial in its bitter patent infringement feud with Verizon. The ruling keeps on track the appeals schedule set last week by the U.S. Court of Appeals for the Federal Circuit.

Vonage contended that a Monday Supreme Court ruling that an invention doesn't qualify for a patent if it is obvious to those with knowledge of the skills involved warranted a new trial. The appeals court said Vonage could use elements of that defense in the appeals trial but refused to vacate the lower court decision.

"Although we're disappointed that the appeals court denied our request for a retrial, this ruling has no impact on our appeal, which continues to move forward," Vonage said in a statement. "We believe our appeal is strong, and are pleased the court has given us the option to use the expanded obviousness test in our arguments."

Verizon  had no official comment on the ruling, but a company spokesman said in an e-mail to internetnews.com, "This is the outcome most people expected."

In its motion against a new trial, Verizon contended Vonage  was attempting to delay the appeals process and that a new trial "wastes the time of everyone – of this Court, the trial court, of jurors, of the litigants – by creating the prospect of three trials."

Oral arguments in the appeals phase of the case are scheduled for June 25.

In March, a Virginia jury awarded Verizon $58 million in damages after it found Vonage's technology that allows it to connect Voice over IP (VoIP) calls to standard telephone networks infringed on three patents held by Verizon. The court then ordered the Holmdel, N.J.-based Vonage to post a $66 million appeals bond.

The lower court also issued an injunction against Vonage from soliciting new customers while the case is under appeal. Vonage said the injunction would be disastrous to the struggling Internet phone company and won a permanent stay of the injunction. Instead, Vonage is paying Verizon a 5.5 percent royalty rate during the appeal.

"Vonage continues to believe the original verdict was based on erroneous claim construction -- meaning the patents in this case were defined in an overly broad and legally unprecedented way," Vonage said. "We are confident this error will be clear to the appeals court when it hears our argument. We remain very optimistic that we will ultimately prevail in this case."

Verizon originally filed suit against Vonage in June of last year. The lawsuit claimed Vonage infringed on five Verizon patents, including patents relating to gateway interfaces between packet-switched and circuit-switched networks. The jury found Vonage guilty of infringing on three of the five patents cited by Verizon.