As has been widely reported, Cox Communications recently won a jury verdict that it did not infringe six of Verizon Communications' patents related to providing voice over Internet protocol (VoIP) phone service. The jury's further finding that Cox proved by clear and convincing evidence that two of Verizon's VoIP patents are invalid provides an important defense to other cable operators implementing VoIP.
In an earlier case, another federal court jury had found that Vonage Holdings had infringed two of Verizon's patents—U.S. Patent No. 6,104,711 ('711), for an “Enhanced Internet domain name server” to translate information from a public, packet-based network; and U.S. Patent No. 6,282,574 ('574), “Method, server and telecommunications system for name translation on a conditional basis and/or to a telephone number,” an extension of the earlier patent. Vonage is reported to have paid Verizon $117.5 million to settle the case. These two patents are the ones that the jury held invalid in the Cox case.
The Cox jury's subsequent finding that the '574 and '711 patents are invalid has important implications. Under the legal principle of collateral estoppel, once a judgment that a patent is invalid has been entered, the patent owner may not assert that patent against any third party. This is true even if the patent owner is appealing the judgment of invalidity to a higher court.
This rule has exceptions only in rare instances where the court has wholly failed to grasp the technical subject matter and issues, and where the patent owner is deprived of crucial evidence or witnesses in the first litigation. This means that unless and until the federal court judgment in the Cox case is overturned by a higher court, Verizon will be estopped from asserting the same patents against any third party, unless Verizon can show that an exception applies.
The jury verdict that Cox Communications did not infringe six VoIP patents of Verizon may also have important effects. Generally, a non-infringement judgment does not prevent a patent holder from claiming infringement by another defendant, since the products of different defendants may be different. However, cable operators' VoIP features are typically implemented to PacketCable standards. To the extent that Cox's use of PacketCable standards is a reason Cox did not infringe, the non-infringement verdict in the Cox case suggests that other cable companies using the same standards likewise do not infringe.