The three-year-old patent dispute between NTP Inc. and Research In Motion Ltd. (RIM), the maker of the BlackBerry e-mail device, saw a flurry of activity early this year as the Canadian government stepped into the fray.
The Canadian government argued in a brief filed Jan. 13 that a decision by the U.S. appeals court on Dec. 14 to uphold the patent infringement ruling against RIM and send the case back to a lower court for judgment could significantly harm Canadian technology companies and innovation.
Canada asked the U.S. court to consider RIMs appeal to rehear the case before 12 judges, or “en banc,” rather than return the case to the lower court.
At the heart of RIMs defense is its argument that its Waterloo, Ontario-based servers, which handle all e-mails sent via BlackBerry devices, place it outside of U.S. patent laws. The Canadian government says any business with operations in both countries could be negatively affected by an “extraterritorial” ruling by the court finding RIM at fault, and asked the court to reconsider.
“Given the number and proliferation of businesses that conduct integrated operations across the Canada-United States border, the panels decision affects a substantial number of businesses with Canadian operations, including those carried on using networks and telecommunications,” the brief said.
“En banc review would allow the court to be assured that its interpretation would not lead to inappropriate application of U.S. patent law.”
Josh Lerner, a Harvard professor and co-author of “Innovation and Its Discontents,” a critique of the U.S. patent system, said the direct involvement of a foreign government in a patent case is fairly unique, and its unclear whether this move will help RIMs case.
“There are a lot of efforts for governments to get involved in creating patent policy, but the involvement in actual, individual disputes tends to be an exception,” Lerner said. “This will certainly raise the profile of the case and some of these issues.”
NTP Inc., a licensing company that owns several e-mail patents, including the one it says RIM infringed upon, also filed several briefs to the U.S. District Court for the Eastern District of Virginia in response to Canadas involvement, and believes the court will not grant the requests.
“Its likely the petition will be denied,” said Donald Stout, NTP co-founder and the companys lawyer. “Its an extremely unusual move, and its premise is faulty.”
Stouts brief and NTPs infringement case revolve around the sale and use of BlackBerry devices in the United States, he said, and one e-mail relay in Canada should not put RIM out of the laws reach.
“The court has been careful to say [in previous rulings] that this was not a basis to get out from underneath the law,” Stout said. “Beneficial use in the U.S. was the basis for this infringement, and except for a single node, everything that occurs using a BlackBerry is in the U.S. This decision will not hurt Canadian business.”
NTPs brief also took a shot at the Canadian governments late entry into the case: “Because the Canadian government did not participate in any previous proceedings, its principal source of information about this case appears to be the combined petition for panel rehearing by RIM. As a result, Canadas brief reflects the same disregard of the factual record and mischaracterizations of the panels decision as in RIMs rehearing petition.”
In addition to the Canadian filing, EarthLink Inc., the Information Technology Association of Canada and the Canadian Chamber of Commerce all filed separate briefs in support of RIM. NTP then filed four other briefs asking the court to deny these requests as well.
RIM said it was unable to comment on the case as it is still in progress, and both the companys and the Canadian governments lawyers were unavailable before filing this story.
An initial ruling in the case in August 2003 ordered RIM to pay NTP $53.7 million in damages and to cease selling its BlackBerry devices in the United States. RIM immediately appealed and continued selling the devices.
The two sides, which have basically reargued their case via these filings, must now wait for the ruling, which is expected next month. RIM has said publicly it will take the case to the U.S. Supreme Court.
NTPs Stout said he believes it “extremely unlikely” that the Supreme Court would take the case, but Harvards Lerner said the court has heard several patent cases in the past and could decide to take this one as well.