Court pauses Charter’s $140M patent payment to Sprint

Sprint store
A federal appeals court ruled Sprint will have to wait to collect a $140 million judgement against Charter until the Supreme Court decides whether to hear the case. (Monica Alleven/FierceWireless)

A federal appeals court has decided Sprint won’t yet get paid a $140 million judgement from Time Warner Cable, now part of Charter Communications, which the cable operator owes for infringing on the wireless carrier’s patents related to Voice over Internet Protocol (VoIP) technology.

Time Warner Cable (TWC) filed a petition (PDF) with the U.S. Supreme Court on Aug. 15 questioning the validity of the scope of Sprint’s patents and the amount of damages awarded.

In an order filed Friday, the U.S. Court of Appeals for the Federal Circuit granted TWC’s request to stay payment of the judgement until the Supreme Court decides whether to hear the case.

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The federal appeals court in March declined to rehear its November 2018 ruling that upheld the $140 million jury verdict in favor of Sprint. That ruling found Charter’s TWC unit violated five Sprint patents related to packet-switched networks.

In approving TWC’s request to delay payment, the appeals court said the Supreme Court will likely act upon the company’s petition “in a few weeks,” and that the burden to Sprint would be “relatively modest.”

A response to the petition is due by Sept. 18.

The federal appeals court also agreed with TWC’s argument that Sprint had already previously agreed to hold off on judgement payment pending all appeals, including the Supreme Court.

Sprint had argued against the delay, but the federal appeals court said Sprint did had “not offered any explanation for its change of position with respect to the duration of the stay.”

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The appeals court also took Sprint’s financial viability into account, noting TWC’s argument that, based on Sprint statements made to federal regulators, it could be difficult to get the $140 million back if it were paid to the wireless carrier if the decision ultimately were reversed by the Supreme Court.

“Under these unusual circumstances we conclude that the most equitable resolution is to order the stay remain in effect, as originally agreed by the parties, until the disposition of Time Warner’s certiorari petition,” the court wrote in its order.

Sprint is working to get its $26.5 billion merger with T-Mobile approved, but faces push-back from a coalition of state attorneys general that have sued to block the deal.

Sprint has targeted others for unauthorized use of its VoIP technology, including Comcast, Cox Communications and Cable One.  Sprint filed its original case against Time Warner Cable, as well as other cable companies, in 2011, charging they used the VoIP technology without permission. Comcast in 2017 paid Sprint $250 million to settle that lawsuit.  

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