RIM, NTP Settle Case: BlackBerry Service Is Safe

Updated: BlackBerry maker Research In Motion and patent-holding company NTP announce that they have entered into a settlement agreement and a license that will end the litigation that had been threatening to shu

Its settled, and your BlackBerry is safe.

BlackBerry maker Research In Motion and patent-holding company NTP on March 3 announced that both parties have entered into a settlement agreement and a license that will end the patent litigation that had been threatening to shut down BlackBerry service in the United States.

Under the terms of the settlement, RIM will make a one-time payment to NTP of $612.5 million. In return, NTP has granted RIM a license that will let RIM continue its BlackBerry-related wireless business, according to officials at both companies.

"We are pleased to have reached an amicable settlement with RIM," Donald Stout, co-founder of NTP, said in a statement. "We believe that the settlement is in the best interests of all parties, including the U.S. Government and all other BlackBerry users in the United States."

The license covers all the current wireless e-mail patents involved in the litigation as well as any future NTP patents, officials said.

The resolution also protects all the wireless carriers and channel partners who sell BlackBerry products, as well as any other hardware makers who have licensed BlackBerry software for use in their own devices.

NTP sued RIM for patent infringement on nine wireless e-mail patents in 2001.

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 injunction, though, pending appeal. The Supreme Court eventually declined to hear RIMs case. Spencer held a remand hearing on Feb. 24, ending that hearing with an appeal that the two sides settle.

/zimages/3/28571.gifClick here to read more about the BlackBerry patent infringement case.

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

As recently as a week before the settlement, RIM officials insisted that settlement was not an option, based on the terms NTP had offered up until then.

"Theyve never offered us a full license, so Im kind of hamstrung," said Jim Balsillie, chairman and co-CEO of RIM, in a Feb. 24 interview with eWEEK. "Its like: Jim, would you be happy being 6 feet, 6 inches tall? Itd be nice, but its not an option in this lifetime."

On March 3, though, he said he was comfortable with the terms of the deal.

"There was the fundamental reality that uncertainty isnt enjoyed," Balsillie said in a conference call following the settlement announcement.

"Once we could finally get a scope of license that protected our whole ecosystem, and a fixed amount that didnt have residual costs … it made sense to settle."

The settlement is a relief to the millions of BlackBerry customers who faced the possibility of an injunction.

"Im glad they reached a settlement so the customers dont have to bear the burden of their squabble," said Robert Rosen, CIO of a major BlackBerry customer, the National Institute of Arthritis and Musculoskeletal and Skin Diseases at the National Institutes of Health, in Bethesda, Md.

Robert Reilly, president of the Professional Inventors Alliance in Washington, said he believes RIM is the bad guy in this case, regardless of how much Americans love their BlackBerry devices.

"I am outraged by RIMs conduct and think that they should have paid far more," he said. "It is well documented that most important inventions come from individual inventors, while large companies tend to only produce small incremental inventions. When patent pirates bankrupt or literally run inventors into their graves, the costs to society are much greater than what the inventor bears."

"I am glad that the ordeal is over for Campanas family and associates," Reilly said. (NTP co-founder Thomas Campana died in June 2004 at the age of 57.)

Next Page: But is the case really over?