Metaswitch Networks Ordered to Pay Over $8 Million and Ongoing Royalties to Genband for Voice Over IP Technology

On March 22, 2018, a Texas federal court awarded patent infringement damages totaling over $8 million and ongoing royalties in a case involving multiple patents related to voice over IP technology. The damages award is based on a jury trial that was conducted in January 2016, where the jury found Metaswitch Networks liable for infringing Genband’s seven patents.  During trial, Genband requested $9,076,000 in damages based on past sales.  In contrast, Metaswitch argued that if infringement was found, damages should be $2,084,024.  Additionally, Metaswitch argued that it was entitled to a royalty-free license as five of the patents were part of a royalty-free pool.  Genband prevailed and the jury awarded $8,168,400, which is exactly 90% of Genband’s request.  After an appeal to the Court of Appeals for the Federal Circuit, Judge Gilstrap was again asked to consider the damages award.  Genband requested that the court determine a royalty rate for (1) products sold for the few months before the jury verdict as no sales data was available at trial; (2) products sold post-verdict and pre-final judgment; and (3) in lieu of a permanent injunction (which was denied), for the court to set an ongoing royalty rate for continued infringement of products in categories (1) and (2) above.  Genband requested an ongoing royalty rate 2.5 times the implied jury awarded rate of 90% of Genband’s requested rate.  Although the court declined to increase the rate by that amount, the court noted some facts that supported increasing the ongoing royalty rate, including the increased market share of Metaswitch and Metaswitch’s status as Genband’s biggest competitor.  The court awarded an ongoing royalty 1.5 times the implied jury rate.  See detailed chart below.

The case is Genband US LLC v. Metaswitch Networks Corp., et al., Civil Action No. 14-cv-00033 (E.D. Tex.)

Written by: Baraa Kahf and Kendall Loebbaka

Edited by: John Sganga, Joe Cianfrani, and Boris Zelkind