Jury Clears Cox in Verizon VOIP Row
Cable operators across the nation are likely breathing sighs of relief amid news that Verizon Communications Inc. (NYSE: VZ) lost its VOIP patent infringement case against Cox Communications Inc.
A jury in the Eastern District of Virginia ruled yesterday that the MSO did not infringe on six Verizon patents tied to VOIP services. Verizon filed the suit on Jan. 11, alleging that Cox violated eight patents used for completing IP telephone calls (only six of the original eight patent claims were found valid for the trial), seeking more than $400 million in damages. (See Verizon Sues Cox.)
Cox, which has more than 3 million residential and business phone customers getting service from its managed PacketCable network rather than via the public Internet, was understandably happy with the decision.
Verizon, which, like other telcos, is rapidly losing landline share to cable MSOs, has not decided whether it will appeal the Cox decision, although it's sounding possible.
"Despite the decision, we believe our patents were infringed," Verizon spokesman David Fish said in a statement.
The favorable decision for Cox may also bode well for Charter Communications Inc. , which found itself in Verizon's legal cross-hairs in February. Verizon filed that suit in a federal court in Texarkana, Texas, claiming Charter infringed on eight VOIP-related patents. That case is still pending. (See Verizon Sues Charter Over VOIP Patents.)
Verizon might now think twice about going after other major MSOs that offer IP-based voice services, including Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cablevision Systems Corp. (NYSE: CVC), and Time Warner Cable Inc. (NYSE: TWC).
In fact, Multichannel News is reporting that Comcast and Verizon have agreed to a five-year cease-fire on patent claims. The terms, which could be negotiated to run for an additional two years, reportedly include a Comcast pledge to buy mobile services for employees from Verizon Wireless . An executive familiar with the deal confirmed that the Comcast-Verizon Wireless agreement is valued in the neighborhood of $90 million.
Comcast, which has more than 5.6 million voice subs, was not immediately available for comment about the arrangement with Verizon.
For its part, Verizon has had more success going after Vonage Holdings Corp. (NYSE: VG), an over-the-top VOIP service provider that uses the public Internet to carry and deliver phone calls. About a year ago, Vonage agreed to pay Verizon up to $120 million in damages. (See Vonage Settles With Verizon.)
— Jeff Baumgartner, Site Editor, Cable Digital News