BlackBerry users relieved e-mail service will continue for now

But the judge could still shut down the service

BlackBerry users reacted to today’s court hearing on the patent fight between NTP Inc. and Research In Motion Ltd. (RIM) with relief that U.S. District Court Judge James Spencer did not order a shutdown of the popular e-mail service (see "Update: Judge delays decision on BlackBerry cutoff"). And they said they feel renewed hope that a settlement will yet be struck.

The hearing “reinforces our believe that the two parties will now reach a settlement that will resolve this issue,” said Frank Gillman, director of technology at Allen Matkins LLP, a Los Angeles-based law firm with 220 BlackBerry users. He called the BlackBerry the best wireless e-mail technology available and said his firm remains prepared to implement a work-around that BlackBerry maker RIM has said is ready to go if needed.

“I’m reassured,” said John Halamka, CIO at CareGroup Healthcare System in Boston, which supports about 500 BlackBerry users, including doctors and nurses. “Several clinicians contacted me today, worried that patient care would be compromised by an immediate shutdown.” He said he expects a collective “sigh of relief” from all his users.

As a result of today’s hearing and recent weeks of discussions about the fight, Halamka said he hopes that patent holder NTP Inc. will lower its settlement demands and that RIM will be more eager to resolve the case.

A settlement is still likely, said Ken Dulaney, an analyst at Gartner Inc. “The judge pretty much told them today to find a settlement, and we’ve always said that’s the most likely outcome. Both sides have a lot to gain and a lot to lose.”

Dulaney also said it is significant that Spencer noted in court that RIM had indeed been found by a jury to have infringed on NTP patents. “The judge basically said to RIM that they should not think they can get away scot-free.”

Dulaney urged BlackBerry users to avoid making any drastic moves for a few more days, in case Spencer actually does issue an injunction against RIM that would affect the more than 3 million U.S. users of its BlackBerry service.

NTP had urged the judge to consider a 30-day grace period for users before any injunction he might issue takes effect. But Gartner has determined that 30 days would be insufficient to get client and server systems in compliance. “We think a minimum of 90 days is better,” Dulaney said.

Brian Ferguson, a patent attorney with McDermott Will & Emery LLP in Washington who is familiar with the case, said an injunction appears likely based on the kinds of questions Spencer asked U.S. Department of Justice attorneys who intervened in the case. Also, Spencer issued an injunction in 2003 after the jury trial in the matter, which was stayed pending appeal. “He’s shown he’s willing to do it already,” Ferguson said.

He noted that Spencer told both sides that he was disappointed they had not already settled.

Todd Kort, an analyst at Gartner Inc., said that if an injunction is issued next week, any grace period will be important. But a bigger unknown is whether the planned RIM work-around will infringe on NTP’s patents and when that issue might be determined.

NTP issued a short statement after the hearing today to BlackBerry users. “We want all BlackBerry users to know that we have repeatedly attempted to settle this issue with RIM, including trying to meet with them this week.... RIM has rejected our efforts, stalled the proceedings and attempted to undermine the process every step of the way.”

In a statement following today's hearing, RIM Co-CEO Jim Balsillie said, "NTP's charade was finally exposed to the court." He called NTP's settlement offer "disingenous and illusory" and said PTO rulings "vindicate RIM's position and prove that the patents should have never been issued in the first place."

A RIM attorney, Henry Bunsow, that an injunction is "inappropriate and impractical" given the harm to the public interest and government users.

RIM also noted that it had received a notice from the U.S. Patent and Trademark Office (PTO) of a rejection of the ninth and final claim in the patent dispute. Spencer has said he is not, so far, influenced by PTO re-examinations in the matter, and NTP has indicated it would appeal any PTO decisions. Those appeals could last three years.

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Copyright © 2006 IDG Communications, Inc.

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