Decision Delayed in BlackBerry Case; RIM Wins Round in Patent Battle

Updated: A federal judge complains about the lack of a settlement between RIM and NTP over the BlackBerry patent dispute, but fails to decide on an injunction, while RIM gains some ground by winning its second p

RICHMOND, Va.—The judge charged with deciding the long-running patent-dispute case between Research In Motion and NTP on Feb. 24 failed to issue an injunction to halt BlackBerry service, but scolded the two companies for failing to settle the disagreement themselves.

U.S. District Court Judge James Spencer said he planned to decide on whether to issue such an injunction as soon as he could, but added that a decision on damages in the case may come sooner.

"I must say Im surprised that you have left this important and incredibly significant decision to the court," Spencer said in a hearing on the injunction here Feb. 24. "The courts decision will be imperfect. The case shouldve been settled, but it hasnt been. So I have to deal with reality."

Spencer went on to say that he is inclined to stay with the jurys original decision in the case, which found that RIM had infringed on NTPs patents.

"When all is said and done, a jury in this very courtroom decided that RIM infringed on NTPs patents and the infringement was willful," Spencer said. "The reality of the verdict hasnt changed in any real way."

RIMs attorneys said they heard nothing in the courtroom that made them any more hopeful about a settlement.

"Unfortunately, no," said Henry Brunsow, a partner with Howrie LLP in San Francisco. "The magistrate is trying, were trying."

RIM has released some details of a workaround designed to keep BlackBerry users connected to the service if Spencer orders the service to shut down.

Brunsow said in the hearing, "We do have a workaround. We can implement it. But its not something that will happen overnight. In fact, it will take quite a while...about 2 million hours."

Jim Balsillie, co-CEO of RIM, attended the hearing and said afterward that Brunsow meant 2 million hours total, not for each user.

Earlier today during the trial, Balsillie noted to eWEEK that the U.S. Patent and Trademark Office gave a final rejection to the second of five NTP patents at issue in the ongoing patent infringement case that could shut down BlackBerry service.

"Now all of NTPs claims are gone," said Balsillie.

A spokesperson for the USPTO confirmed that the office had issued a final rejection of the second patent.

NTP still has three other patents related to the RIM dispute in the application process, and the USPTO spokesperson said there is no specific timetable for decision on any of the three.

In the opening parts of the trial Feb. 24, NTP argued that it was entitled to a larger settlement due to the number of BlackBerry devices that have been rolled out since the patent dispute began.

News of RIMs second favorable ruling from the USPTO is a positive development for the BlackBerry maker.

On Feb. 23, the USPTO denied NTPs petition that sought to remove a Feb. 1 ruling in which the Patent Office issued a "non-final rejection" of the fifth patent at the center of the legal battle. In other words, that rejection still stands.

Despite the patent win today, the status of RIMs service is still up to Spencer. An injunction would affect some 3 million U.S. customers. It is unclear when Spencer will issue his ruling.

/zimages/2/28571.gifCustomers are uneasy about RIMs contingency plans. Click here to read more.

While NTP representatives spoke the morning of Feb. 24, lawyers for RIM had yet to make their arguments that a BlackBerry shutdown would be detrimental to the public good.

This was a sentiment echoed by the U.S. Department of Justice, which plans to have a presence at the Feb. 24 hearing, and by eBay, which is facing a similar patent infringement case.

Lawyers for patent-holding company NTP argued that RIM should be prohibited from selling BlackBerry devices unless RIM agrees to license NTPs patents.

The patent dispute dates back to 2001, when NTP sued the BlackBerry maker for alleged patent infringement.

U.S. District Judge James Spencer ruled in favor of NTP in 2003, instructing RIM to halt its sales of BlackBerry devices and services in the United States until NTPs patents run out in 2012.

Spencer stayed the ruling, however, pending appeal. Since then, the case has gone through several appeals and failed settlement attempts.

In the meantime, the USPTO has been evaluating the validity of NTPs patents, based on prior art not considered when the patents were initially issued.

The USPTO has indicated that it intends to reject all of NTPs claims eventually, which would render the case null and void, and RIM officials have remained publicly confident that this will happen.

/zimages/2/28571.gifClick here for a guide to surviving a BlackBerry blackout.

Industry experts say the process could take several months, though.

"Despite the patent offices dedicated re-exam group, I would expect that [a ruling by the Board of Patent Appeals and Interferences]—the final agency decision—will not occur in this case until around October," said Stephen Maebius, an attorney at Foley & Lardner LLP, in Washington, who worked at the USPTO in the early 1990s.

To that end, Spencer has said that he does not intend to wait for the Patent Office in considering when and whether to issue an injunction.

RIM maintains that the company has tested and readied a legal technical workaround solution that would let it continue offering its mobile e-mail service in the case of an injunction.

Editors Note: This story was updated to include trial news and comments from a USPTO spokesperson.

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