Experts: Patent ruling could reopen Vonage case

VoIP firm's future brighter after Supreme Court ruling

Legal experts say that a ruling this week by the U.S. Supreme Court could give new life to Internet phone company Vonage's claims that it has been the victim of overly generous patent rulings.

In a ruling in the case KSR International Co. vs. Teleflex Inc., released Monday, the Supreme Court clarified its thinking on patents and overturned lower court decisions that had set a high bar for invalidating new patents on the grounds that they were "obvious" combinations of preexisting inventions.

Though the case in question addressed a patent for an "adjustable pedal assembly with electronic throttle control," the ruling was widely interpreted as a major shift in patent law, which had been liberally applied in recent years to cover everything from counting pages in books to setting flat rates for wireless phone service.

In perhaps the first of many challenges under the new ruling, Internet phone company Vonage filed on Tuesday to have a patent lawsuit filed against it by Verizon retried in light of the ruling.

Legal experts contacted by InfoWorld said that the company could have a strong case given the Court's new position on patent obviousness.

"The Supreme Court basically said the court of appeals and federal circuit were applying too tough a standard to prove obviousness and that the standard to proving obviousness should be easier, especially where you're talking about combinations of known things," said Dan Ravicher, legal director at the Software Freedom Foundation, which filed a brief in the KSR-Teleflex case.

"The court was saying that the patent system had gone too far. That it was out of whack, and they wanted to reduce the speed down to a safe level," he said.

While the specifics of the Supreme Court ruling in the case are complex, the new ruling in the KSR case sets a higher bar for issuing new patents, said Rachel Krevans a senior intellectual property litigation partner at Morrison & Foerster in San Francisco.

"In a nutshell, the ruling says that you can't get a patent on an idea unless it's really new," she said.

That's an especially tough question in fields like high tech and electronics, where almost every invention is built upon the work of others. The question often comes down to whether an invention is "new enough," she said.

In recent years, patent examiners and the courts relied heavily on the presence of so-called "prior art," or a specific, existing patent that could teach a skilled practitioner enough about what he or she was trying to patent to make the idea itself "obvious."

But those kinds of cases were rare and made it difficult to invalidate patents that were granted. The new ruling makes it easier for both patent examiners and the courts to look across different examples of prior art and conclude that, all told, the new idea is "obvious," according to Krevans.

"The emphasis is on 'could someone do this and have the results be surprising,'" she said.

Vonage is hoping that the new standard casts doubts on Verizon patents for name translation and wireless technology that it was found guilty of infringing upon.

The company said the patents should be retried by the U.S. District Court in light of the Supreme Court ruling. Eric Rabe, a spokesman for Verizon, dismissed that argument.

"The KSR case is not related to our patent suit against Vonage. They're entirely different issues," he said.

Rabe declined to speculate on whether the new guidance from the Supreme Court could weaken his company's patents, but Krevans and others said that the impact of the KSR ruling will be felt right away.

"I have a trial starting in a patent case in three weeks, and I spent the morning with my team ripping up jury instructions and writing new ones," she said. Moreover, the instructions that are being written are entirely new.

The ruling could also open the door to wholesale reexaminations of existing patent grants, she said. "The grounds for reexamination of a patent are that there's a substantial new issue affecting patentability," she noted. The KSR ruling could create such grounds, allowing prior art for patents to be considered in light of the court's recent declaration about "obviousness" rather than the old standard.

In the end, it will take time to work out what the KSR ruling means, said computer science Professor Lee Hollaar of the University of Utah, who filed a brief to the Supreme Court in the case. And that makes predicting the ruling's impact on the Verizon-Vonage case difficult.

Still, Vonage would have to prove that there was prior art for Verizon's patents that is relevant under the new guidance but ignored previously.

"All the decision did was say, 'You can't be so rigid as to say that there has to be a specific teaching of a combination of technology,' and that's quite reasonable," Hollaar said. 

Taken together with a ruling in May, 2006 in favor of online auction firm eBay that made it harder for patent holders to get immediate injunctions against infringing products, the Supreme Court is raising the legal bar of what constitutes a "new invention," legal experts agree. 

"The theme in these cases is that the Supreme Court is very focused on inventions that are new combinations of components and elements that were known. And, in the Supreme Court's view, there is a pretty high bar for those inventions to be novel." Krevans said.

Copyright © 2007 IDG Communications, Inc.

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