A jury verdict is expected as early as Monday in Verizon Communications Inc.'s patent infringement case against cable provider Cox Communications Inc., people familiar with the situation say, the latest in a series of moves the telecom giant has made to assert its intellectual property in Internet telephony.Verizon alleges that Cox violated six patents related to the technology and is asking for past damages of $404 million, the people say. Cox has argued that it hasn't violated the patents at issue but has said any damages that are awarded should be no greater than $1.9 million.
The case, which has been at trial in recent weeks in U.S. District Court for the Eastern District of Virginia, underscores how Verizon is ramping up efforts to enforce its Internet phone technology, an area that it holds patents in but hasn't aggressively marketed to its own customers. Last fall, Internet phone provider Vonage Holdings Corp. agreed to pay Verizon $117.5 million to settle a long-running patent dispute.
Verizon has targeted other cable rivals. It has a pending patent lawsuit against Charter Communications Inc. in Texas. And on the eve of its Cox trial, Verizon struck a deal with Comcast Corp. in which the two sides agreed not to sue each other for patent infringement for a period of five years, according to people familiar with the matter and a research note by Stifel Nicolaus & Co.
In exchange, Comcast agreed to purchase Verizon Wireless's wireless service for its employees, the people familiar with the matter said. The amount of guaranteed revenue for Verizon from the deal would be between $90 million and $137 million, though Comcast could purchase additional services that could make the total cost closer to $280 million, the people said. The Comcast deal covered not just Internet phone patents, but thousands of voice, video and data patents held by the two companies.
Cox and Verizon only go head to head in a handful of markets. David Hayes, an intellectual property attorney at Fenwick & West LLP, says that might make it difficult to argue for damages based on lost profits. But Verizon "can still argue that it deserves a reasonable royalty for infringement," Mr. Hayes said.
By: Amol Sharma
Wall Street Journal; October 6, 2008
