October 7, 2008

Close Call: Cox's Court Victory Bodes Well For Cable VoIP

A VA jury determined Mon that Cox did not infringe on several Verizon patents related to Internet telephony, an important decision that saves the MSO from having to pay $404mln in damages and sets a promising precedent for cable. In Oct, Verizon emerged victorious from a similar suit against Vonage before bringing its attack to Cox (Jan) and Charter (Feb), citing their use of similar VoIP architecture. "Cox is extremely pleased with the decision... and [we] look forward to competing vigorously with Verizon in the marketplace, not the courtroom," said the MSO. Countered Verizon: "We will continue to innovate and to protect our patented inventions." Next up is the telco's pending case against Charter, which it said is scheduled for Feb '10 in TX. In Mar, Charter denied Verizon's patent infringement allegations and through a counterclaim asked the court to declare invalid the telco's patents. Amid a vigorous defense of the case, Charter said the verdict shows "that the networks that Cox and Charter use to deliver services do not infringe Verizon's patents and that at least some of the patents are invalid." Stifel Nicolas said the decision bodes well for cable. "The larger significance of a verdict in Verizon's favor would have been the negotiating leverage it would have provided Verizon with other cable companies," wrote the firm, noting a weakened hand for the telco "in any negotiations with Time Warner and Cablevision." Verizon declined to comment on any potential future impact. Comcast is currently untouchable to Verizon, as Stifel Nicolas noted last week an agreement that prevents any patent litigation between the pair for at least 5 years. According to published reports, the pact hinged on Comcast's assent to purchase Verizon Wireless service for its employees.