Judge urges compromise in phone case

A judge suggested a possible compromise in a patent dispute between Internet phone carrier Vonage Holdings Corp. and Verizon Communications Inc. that would allow Vonage to continue signing up customers while it modified its technologies.

Judge Timothy B. Dyk, part of the three-judge panel of the U.S. Court of Appeals for the Federal Circuit, made the remark during oral arguments Monday.

The panel is considering Vonage’s appeal of a March jury verdict that found Vonage infringed three Verizon Communications patents in constructing its Internet phone system. The jury awarded Verizon $58 million, plus future royalties for continued patent infringement.

U.S. District Judge Claude Hilton then barred Vonage from signing up customers, a decision that threatens to cripple the company. The appeals court granted a stay while it considered the case.

Dyk raised the possibility that the appeals court could instruct Hilton to consider softening the injunction.

“Isn’t there kind of a middle ground in these cases when the injunction would put someone out of business? Shouldn’t that be a consideration?” he asked. “Shouldn’t the district court consider allowing time for a work-around as part of the injunction?”

Verizon lawyer Richard Taranto said that Vonage had never asked for such a compromise.

Vonage could accept a modified injunction “if that’s the least we got,” Vonage attorney Roger E. Warin said. But he stressed that the company wanted the entire verdict thrown out and a new trial granted.