Judge won't hold up case against RIM

A federal judge won't hold up court proceedings in NTP Inc.'s patent lawsuit against Research In Motion Ltd. (RIM), opening the door to a possible injunction that would stop sales of BlackBerry mobile e-mail devices, and shut down BlackBerry service, in the U.S.

RIM had filed two motions, one to enforce an agreement with NTP to settle the case and another to stop the court proceedings while the U.S. Patent and Trademark Office re-examines NTP's patents. Judge James Spencer of the U.S. District Court for the Eastern District of Virginia on Wednesday denied both motions. He ruled that the parties don't have a valid settlement agreement and said the district court could not hold up the case during a patent re-examination that could take years.

RIM, in Waterloo, Ontario, sells BlackBerry wireless handhelds and operates a push e-mail service. NTP, a patent holding and licensing company in McLean, Virginia, sued RIM in 2001 claiming the company's devices, e-mail system and method of operating the system infringed NTP patents. NTP won a jury verdict in 2002. In March, the companies announced they had agreed to settle the dispute by having RIM make a US$450 million payment to NTP in exchange for a perpetual license to NTP's patents. However, the deal fell through, as RIM thought the press release constituted a final agreement while NTP insisted the companies had never reached a definitive agreement.

"We would hope today's significant developments would bring them back to the table," said James Wallace, an attorney with Wiley Rein & Fielding LLP, in Washington, D.C., who represents NTP.

The court next will schedule briefings with the parties and set a date for a hearing on the injunction and damages, according to the orders by Judge Spencer. An injunction could be imposed by the end of the year, Wallace said.

Meanwhile, RIM is seeking an appeal to the U.S. Supreme Court and expects the high court to decide over the next few months whether to hear that appeal, it said in a statement Wednesday.

RIM believes an injunction would be inappropriate because of the ongoing patent re-examination, the request for Supreme Court review and other factors, including public interest concerns over suspending BlackBerry service, the statement said. RIM is also preparing software work-arounds it could use if necessary to maintain BlackBerry services in the U.S., it said.

Copyright © 2005 IDG Communications, Inc.

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