Vonage is the darling of network neutrality advocates. Using Vonage, millions of people have canceled their telephone service in favor of an IP-phone that connects through the Internet.
Last month, a jury determined that Vonage infringed three Verizon patents. (6,282,574, 6,104,711, 6,359,880). These patents all relate to various aspects of Internet telephony.
This is not a "troll" case -- By definition, patent trolls are only looking for a payment in exchange for a patent license. Here, it is fairly clear that Verizon hopes that its patents will cause Vonage to close its doors. Thus, Verizon requested and was granted a permanent injunction.
Stays Pending Appeal: The general rule as stated in the Federal Rules of Civil Procedure [R. 62(a)] is that a permanent injunction "shall not be stayed during the period after its entry and until an appeal is taken or during the pendency of an appeal." At its discretion, a district court can stay an injunction. In cases such as this, where the patents strike to the core of the defendant's business, denial of a stay often ends the case because an appeal 3-months-later is too late. Under the Federal Rules of Appellate Procedure [R. 8(a)], a defendant may make a motion to the appellate panel for temporary relief after first showing that a lower court motion would have been "impractical."
In Standard Havens, the Federal Circuit announced a four-factor test for considering whether to issue a stay pending appeal.
- Likelihood of success on the merits of the appeal;
- Irreparable harmed absent a stay;
- Irreparable harm due to a stay (continued infringement); and
- Public interest.
Vonage Partial Stay: The U.S. District Judge Claude Hilton (E.D.Va) issued the permanent injunction and but granted a partial stay. The judge's decision allowed Vonage to continue in operation, but barred the upstart from signing-up any new customers.
Emergency Appeal: As it did in TiVo v. EchoStar, the Court of Appeals for the Federal Circuit (CAFC) immediately stayed the injunction (at the request of Vonage) and will hear an appeal regarding injunctive relief on April 24, 2007.