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November 9, 2005
RIM's Silver Lining
Yes, it looks grim for RIM. U.S. District Court Judge James Spencer began this morning the process of deciding whether to enforce an injunction against Research in Motion Ltd. for its Blackberry handheld devices. "I intend to move swiftly in this," Spencer said. "I've spent enough of my life and time on NTP and RIM." But ultimately, it's most likely that RIM will pay NTP and settle the matter.
In 2003, Spencer granted an injunction that would have halted U.S. sales of the BlackBerry and shut down its wireless service after NTP successfully sued RIM for patent infringement. But Spencer stayed the injunction pending appeal, which RIM lost.
Spencer will first decide whether a contested $450 million settlement deal with patent holding company NTP Inc. is enforceable. The deal was struck in March, but fell apart in June. RIM wants the deal enforced, thus settling the matter. Spencer will schedule hearings on the injunction only if he decides the March agreement isn't enforceable. The whole matter could be decided by Christmas.
Eight NTP patents are under re-examination, a process that can drag on for years. Spencer said he is unlikely to grant RIM's request to stay proceedings pending the patent office's re-exam.
If an injunction came to pass, the order wouldn't apply to BlackBerry service for government agencies or emergency workers like police officers and firefighters, said James Wallace, a lawyer for NTP. Wallace said before today's hearing he would request to the court that users be given 90 days to find an alternative e-mail service before their BlackBerry wireless service was shut down.
RIM has claimed to have a work-around to infringement, but hasn't revealed any details. Sceptics abound on that, figuring such a fix would likely be an inconvenience to customers, who would switch to other services.
NTP wouldn't be putting a competitor out of business, they'd be slaughtering their cash cow. NTP doesn't sell products - it relies upon royalties and licensing fees from others to make money. Blackberry, the biggest money-spinner of portable e-mail devices, could make RIM NTP's biggest customer. So, NTP has a serious financial stake in having BlackBerry sales continue. The sound to listen for is not the silencing of the Blackberries, but RIM opening its wallet.
Posted by Patent Hawk at November 9, 2005 10:13 AM | Litigation