A federal appeals court has delayed a $140 million award to Sprint because Time Warner Cable is asking the Supreme Court to hear its appeal concerning Voice over Internet Protocol services.
A three-judge panel of the US Court of Appeals for the District of Colombia ruled that Time Warner, now owned by Charter Communications, infringed on five of Sprint’s VoIP patents and owes it royalties worth hundreds of millions of dollars.
Time Warner appealed to the Supreme Court and asked that the appellate court delay enforcing its decision until the high court decides whether to hear the case. The appeals court stayed the ruling.
In lawsuits dating at least to 2007, Sprint has sued several cable TV and cellphone companies for infringing on its patents, among them Comcast and Time Warner, the two largest Cable TV companies.
Comcast’s Settlement
Sprint alleged the companies used its inventions for transmitting phone calls over digital lines without permission. Comcast later settled with Sprint for $250 million, but Time Warner held out and fought the case in federal courts.
One issue raised by Time Warner was whether it could claw the award back from Sprint if the high court reversed the decision.
Sprint opposed the delay, but Time Warner’s legal team pointed out that Sprint previously had agreed to postpone payment and was contradicting itself.
The Supreme Court will convene in October. It’s not known when, or if, the court will agree to hear Time Warner’s appeal.
Sprint is in the midst of a merger dealOpens a new window with T-Mobile, valued at $26.5 billion. The Federal Communications Commission said last month that it will soon vote on the dealOpens a new window , but the merger faces stringent opposition from more than a dozen state attorneys general who claim it would harm consumers. Negotiations are ongoing.
Lawsuits as Profit Center
The legal battle is just one of a number that have roiled the VoIP market in recent years.
Sprint has been in court for more than a dozen years, first suing Vonage for $80 millionOpens a new window . In its most recent case, it claimed that no less than 12 patents had been infringed.
Sprint has been able to turn its lawsuits into a profit center.
The firm fought to maintain its position against other early movers in the VoIP technology sector 10 years ago when it went after a number of smaller companies.
Now it is demanding royalties from much bigger fish with deeper pockets.
Key takeaways:
- Time Warner has successfully sought a stay of payment of $140 million to Sprint as the latter pursues a case for VoIP patent infringement.
- Sprint has been remarkably successful in winning cases against other major firms that have started competing against it in the VoIP/online telephone market.
- The case is currently on hold as the parties wait to see whether it will be elevated to the US Supreme Court.
- The VoIP market has been plagued with lawsuits over the past decade as the industry battles to discover which elements of technology can be defended in the courts as being of a proprietary nature. This will be essential for some firms as they seek to capitalize on the growth of VoIP.