NTP Loses Small Battle in BlackBerry Case

A federal judge nixes NTP's motion to include Patent Office documents in its case against RIM.

NTP lost a small battle in its big war against BlackBerry maker Research In Motion when a federal judge officially declined to consider several documents that NTP submitted in an attempt to prove that RIM is sneaky.

A Feb. 27 entry in a U.S. District Court docket includes a summary of an order "denying [a] motion to have recently-produced United States Patent and Trademark Office documents entered into the record."

The motion referred to NTPs Feb. 21 request for official consideration of several documents that the holding company received from the Patent Office after filing a Freedom of Information Act request.

According to a Feb. 23 statement from NTP, there are documents in the Patent Office that "indicate [RIMs] attempt to subvert the U.S. intellectual property system" by hiring Washington lobbyists to persuade the Patent Office to re-examine and reject several wireless e-mail patents. These patents sit at the heart of a years-long lawsuit, which threatens the future of BlackBerry service in the United States.

/zimages/4/28571.gifRIMs chairman says a settlement is not an option. Click here to read more.

RIM on Feb. 23 filed an objection to NTPs motion. RIM argued that in October 2002 a lot of companies other than RIM sent letters to James Rogan, then director of the USPTO, asking that he re-examine NTPs patents. These companies included Qualcomm and Microsoft, both of whom were among the 47 companies who received cease and desist letters from NTP. Sprint, Nextel, and the Cellular Telecommunications and Internet Association also asked for a re-examination of the patents.

NTP sued RIM for patent infringement in 2001.

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.

On Feb. 24 Spencer held a hearing in Richmond, Va., to reconsider both an injunction and an updated financial settlement for NTP, but has yet to make a final decision.

Meanwhile, in Washington, the USPTO was busy re-examining the disputed patents. On Feb. 24 the USPTO issued a final office rejection to a patent known as the 960 patent—the second of five NTP patents at issue in the case.

That rejection seemed to be a coup for RIM, whose lawyers found out about the rejection on Feb. 24 during NTPs opening arguments.

NTPs lawyers spent several minutes of the hearing arguing that a financial award should consider the 2003 verdict, which was largely based on the merits of a claim of the 960 patent. NTP asked the judge for a monetary judgment of $126 million, in addition to an injunction.

"That verdict, Your Honor, is compelled by infringement of Claim 15 of the 960, applying Your Honors very, very specific instructions," said James Wallace, an attorney for Wiley Rein and Fielding LLP, which represents NTP. "The only thing that is really left to do is just to update that award in the exact same way that Your Honor did back in August of 2003."

As NTPs attorneys made their case, one of RIMs attorneys was scrawling a quick note on a piece of hotel stationery. He passed the note to James Balsillie, chairman and co-CEO of RIM, who sat in the front row at the hearing.

"Patent 960 was just rejected final office action by the USPTO," the note said. "Now ALL NTP claims are gone!"

/zimages/4/28571.gifBalsillie puts his game face on in the courtroom. Click here to read Carmen Nobels blog.

Sure enough, the Patent Office has re-evaluated all of the disputed patents that it initially granted and has said that it intends to reject them all, based on prior art.

RIM has continued to argue that the judge should consider that fact before he decides to issue an injunction.

"The Patent Office says these claims are invalid, and their office actions have been unanimous, and they have been direct," said Henry Bunsow, RIMs lead counsel and partner at Howrey Simon Arnold & White LLP, a San Francisco law firm. "[NTP wants] you to enjoin RIM from practicing the invention that the Patent Office says that RIM owns. Thats how convoluted this is."

And, in fact, all of the three remanded claims in NTPs case are based on patents for which the USPTO has issued final office actions.

But at the end of the hearing, Spencer indicated that this was a moot point.

"One unfortunate reality for RIM, and one that they would just as soon forget or ignore, is that in this very courtroom there was a trial, a jury was selected, a trial was carried out for a period of weeks, and evidence was received, and the jury heard arguments from some of the best legal talents that money can buy," he said. "And when all was said and done, they decided that RIM had infringed NTPs patents, and that the infringement was willful.

"After all of the appeals—the petitions, the politics and the lobbying—this central truth, this reality of the jury verdict has not changed in any essential or substantive way."

Spencer said he will issue a decision about the injunction "as soon as reasonably possible."

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