Sprint Communications Co. v. Vonage Holdings Corp.

500 F.Supp.2d 1290

SPRINT COMMUNICATIONS COMPANY L.P., Plaintiff, v. VONAGE HOLDINGS CORP. and Vonage America, Inc., Defendants.

No. 05-2433-JWL.

United States District Court, D. Kansas.

August 7, 2007.

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Adam P. Seitz, Basil Trent Webb, Eric A. Buresh, Shook, Hardy & Bacon L.L.P.,

Kansas City, MO, Joshua Reuben Brown, Shook, Hardy & Bacon L.L.P., Tampa, FL Peter E. Strand, Shook, Hardy & Bacon, L.L.P., Washington, DC, Robert H. Reckers, Shook, Hardy & Bacon LLP, Houston, TX, for Plaintiff.

James W. Dabney, James D. Oliver, Foulston Siefkin LLP, Malcolm J. Duncan, Fried, Frank, Harris, Shiver & Jacobson LLP, New York, NY, Scott C. Nehrbass Foulston Siefkin LLP, Overland Park, KS, Barry Golob, Donald R. McPhail, Lauren E. Debruicker, Patrick D. McPherson, Patrick C. Muldoon, Duane Morris LLP, Scott William Doyle, Steptoe & Johnson LLP, Washington, DC, Patrick J. Kaine, Don R. Loll, Dysart, Taylor, Lay, Cotter & McMonigle, P.C., Kansas City, MO, for Defendants.

MEMORANDUM AND ORDER

LUNGSTRUM, District Judge.

I. Introduction

In this lawsuit plaintiff Sprint Communications Company L.P. alleges that the voice over internet protocol telephony system of defendants Vonage Holdings Corp. and Vonage America, Inc. (Vonage) infringes sixty-one claims of seven telecommunications patents owned by Sprint. This matter is currently before the court on the parties' various pretrial motions. In the first set of motions, Vonage seeks summary judgment of non-infringement and Sprint moves to strike certain portions of Vonage's brief in support of its motion for summary judgment as well as its subsequent reply brief (does. # 200, # 215 & # 245). The second set of motions relates to Vonage's affirmative defenses and includes Sprint's motion for partial summary judgment on most of those defenses, Vonage's Rule 56(f) motion in response to Sprint's motion for partial summary judgment, and Sprint's motion to exclude the non-infringement opinion of Vonage's expert Joel M. Halpern (does. # 196, # 198 & # 218). Vonage has also filed objections to the magistrate judge's orders of May 14 and 16, 2007 (doe. # 210) in which the magistrate judge excluded certain matters from the final pretrial order in this case.

As to the first set of motions, for the reasons explained below, Sprint's motions to strike are largely granted. Many of the arguments raised by Vonage in Sections II, III, and IV of its opening brief do not comply with the rules governing summary judgment practice in this court and therefore the court will disregard those improperly supported factual assertions except to the extent that they appear to be uncontroverted and helpful to an understanding of the case. Additionally, the court will not consider the arguments raised by Vonage for the first time in its reply brief because Vonage should have raised those arguments in its opening brief. Turning to Vonage's motion for summary judgment, that motion is granted with respect to the issue of literal infringement of the claim terms "interworking device" and "interworking unit" in the '301 Family Patents, which the court construes to mean ATM interworking multiplexer, because it is undisputed that the Vonage system does not use ATM technology, and therefore does not contain an ATM interworking multiplexer. As to the '605 Family Patents, it is granted as to the following issues: the issue of non-infringement of the asserted claims of the '932 Patent in the inbound call scenario; the issue of literal infringement of the limitation in claim 24 of the '561 Patent that the processing system must select a network code and use that network code to route the user communication; the issue of infringement of the asserted claims of the '052 Patent in the inbound scenario using an SIP gateway; and the issue of non-infringement of the asserted claims of the '572 Patent in the inbound call scenario. Vonage's motion is denied with respect to all of the other summary judgment arguments raised by Vonage, as either Vonage did not meet its initial summary judgment burden of informing the court of a valid basis for its motion or else the summary judgment record presents a genuine issue of material fact which precludes summary judgment of non-infringement.

Sprint's motion for partial summary judgment on Vonage's affirmative defenses and counterclaims is largely granted. Specifically, it is denied with respect to (1) the statutory marking and notice requirements set forth in 35 U.S.C. § 287, and (2) Vonage's defense and counterclaim of none infringement. As to all other issues, the motion is granted. To the extent that Vonage's memorandum in opposition to Sprint's motion seeks relief under Rule 56(f), Vonage's Rule 56(f) motion is denied because Vonage has not demonstrated how additional time for discovery would enable it to rebut Sprint's allegations that there is no genuine issue of fact sufficient to preclude summary judgment on Vonage's equitable defenses. In denying summary judgment on Vonage's non-infringement defense and counterclaim, the court also denies Sprint's motion to exclude Mr. Halpern's non infringement opinion.

Lastly, as to Vonage's objections and motion to review the magistrate judge's orders of May 14 and 16, 2007, the court first finds that Sprint has demonstrated good cause why it failed to respond to Vonage's objections in a timely fashion. The substance of Vonage's objections are overruled because the magistrate judge's rulings were not clearly erroneous or contrary to law.

II. Nature of the Case and Background of the Technology Involved

In the summer of 1993, Joe Christie, an employee at Sprint's Advanced Technology Laboratory, invented a new telecommunications system. Mr. Christie was a unique expert in two very dissimilar disciplines: SS7 signaling and packet networks. SS7 signaling is the language used by conventional telephone networks to set up calls and communicate between telecommunications components in the Public Switched Telephone Network (PSTN). In 1993, virtually all voice traffic was carried over the PSTN using switches and other well-established components. PSTN is "synchronous" in that every component along a circuit must be synchronized in order for communications to successfully cross the network. Packet networks are entirely different. These networks use "packets" to transport data from point to point. Packets are digital transport units that include a header and a payload. Packet networks are "asynchronous" in that the transmitting and receiving points act out of sync with one another, sending and receiving packets within a message without regard to the timing of one another. Joe Christie essentially devised a way to combine the two types of systems to create a more efficient system. He invented a series of components and architectures of components that would allow the PSTN to "talk" to packet networks and intelligently set up and route telephone calls across the disparate networks. Mr. Christie's invention was significant in that it had the potential to render obsolete major components within the PSTN, breaking the grip that a handful of switch manufacturers held on service providers like Sprint. Sprint immediately began the process of patenting Mr. Christie's invention.¹ In the following years, Mr. Christie's inventions and the related innovations made by people working with him resulted in a patent portfolio of well over one hundred issued United States patents. The portfolio is one of the largest project portfolios in the United States.

In the summer of 2004, Sprint became aware that Vonage was offering residential telephone services that used the Internet to connect calls to and from the PSTN. Vonage's system is known as VoIP (Voice over Internet Protocol). VoIP transmits calls over the Internet using voice packets, each of which contains a header with an IP address and a user datagram protocol port which are used to route the packet. The Vonage system performs this by using a series of components such as switches, connections, gateways, proxies, and signals. Vonage has grown to become one of the largest subscriber-based VoIP service providers in North America.

Sprint filed this lawsuit in October of 2005, asserting infringement of sixty-one claims from seven representative patents from its patent portfolio. The patents in suit can be divided into essentially two groups: the '301 Family Patents and the '605 Family Patents. The '301 Family Patents include U.S. Patent Nos. 6,473,429 (the '429 Patent), U.S. Patent No. 6,665,294 (the '294 Patent), and U.S. Patent No. 6,298,064 (the '064 Patent). These three patents are collectively referred to as the '301 Family Patents because they all share an identical written description and drawings with U.S. Patent No. 5,991,301 and were filed as continuation applications of the '301 Patent. For priority purposes they all claim the filing date of the '301 Patent, which is September 8, 1995. Each of these patents is entitled "Broadband Telecommunications System," and generally discloses an invention which is "a system for providing virtual connections through an ATM interworking multiplexer on a call-by-call basis."`429 Patent, Abstract.

The '605 Family Patents include U.S. Patent No. 6,452,932 (the '932 Patent), U.S. Patent No. 6,304,572 (the '572 Patent), U.S. Patent No. 6,463,052 (the '052 Patent), and U.S. Patent No. 6,633,561 (the '561 Patent). These four patents are collectively referred to as the '605 Family Patents because they all share an identical written description and drawings with U.S. Patent Application No. 08/238,605 (the '605 Application, now abandoned) and were filed as continuation applications to the '605 Application. For priority purposes they all claim the filing date of...