February 24, 2006 10:20 AM PST

BlackBerry case: No shutoff, for now

RICHMOND, Va.--More than 3 million U.S. BlackBerry users won't lose their service--at least for now.

In a hearing on Friday, U.S. District Judge James Spencer decided against issuing an immediate ruling on whether to impose an injunction that would shut down sales and service of the popular mobile e-mail devices in the U.S. But what remains clear, he said, is that the jury verdict in NTP's case against Research In Motion for patent infringement, nearly four years ago, "has not changed in any substantial or substantive way."

During the hearing, lawyers for NTP asked Spencer to issue an updated $126 million judgment against the BlackBerry manufacturer, calculating that figure based on methodology used by the jury, which initially awarded it $23 million in damages. NTP also called for an injunction against RIM's U.S. service for violating patents.

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Lawyers for RIM argued fervently against any injunction, basing their defense largely on the idea that doing so would undermine the public interest. They noted that the company was willing to hand over damages if the validity of NTP's patents was upheld but argued for a new trial to calculate the appropriate amount.

After nearly four hours of arguments from each company and the U.S. Justice Department, Spencer said he would take the matter under advisement and reveal his decision "as soon as reasonably possible."

Spencer said he expects to release an order related to the damages before releasing one related to the injunction. He wants "to make sure the government and its needs are met" before making the latter decision, he said.

The judge, who has been vocal about his desire to conclude the proceedings, scolded the companies for not coming to a settlement on their own.

"In plain words, the case should have been settled, but it hasn't, so I have to deal with that reality," Spencer said, adding that he thought the matter was a "business decision" and was surprised the companies opted to leave the decision with the courts.

"Settlement has never been an option for us," RIM's co-chief executive officer, Jim Balsillie, said in an interview with CNET News.com after Friday's hearing. On Thursday, Balsillie told attendees at the RBC Capital Markets conference that NTP's licensing terms were far too prohibitive to accept, which NTP has denied.

Friday's hearing came as RIM has been fighting to limit the damage from a 2002 jury verdict that found that it infringed on several of NTP's patents related to mobile e-mail communications.

In 2003, Spencer imposed an injunction on the sale and support of BlackBerry devices in the United States, but he stayed that injunction, pending the appeals process. Spencer also increased the damages awarded by a jury as a result of misconduct by RIM's lawyers during the trial and ordered the company to put 8.55 percent of its quarterly revenue into an escrow account, pending the appeals process.

A federal appeals court lifted the injunction and sent the case back to a lower court in 2004, though it agreed that most of NTP's patent claims are infringed by the BlackBerry system. With that basic question of infringement appearing to be settled, the debate has turned to two other areas: the patent re-examination process and RIM's "work-around."

RIM has been playing a waiting game, hoping to convince Spencer to avoid entering an injunction until the patent review process is complete. Spencer denied a similar request to stay the trial, pending the review process in November, but RIM believes the uncertainty around the patents should prevent a new injunction.

During their arguments on Friday, RIM attorneys repeatedly said that the U.S. Patent and Trademark Office has declared NTP's patents invalid. The Patent Office as of Friday had issued a "final office action" for two of the five patents at issue in the trial. The other three have only received nonfinal decisions, but they are expected to get the final rejection sometime soon.

A "final" decision isn't completely final, as NTP has the right to appeal those actions to a three-judge panel at the Patent Office, as well as to a federal appeals court, before the patents are struck down.

But NTP will still be entitled to any damages awarded as part of Friday's hearing. Damages awarded for patent infringement through a trial are still valid, even if the patents are later struck down. NTP would lose the right to seek future damages, but it could collect the almost $250 million currently sitting in escrow without having to pay it back later.

The morning opened with arguments from two NTP lawyers, who split their time arguing in favor of an extended damage award and an injunction on BlackBerry service.

CONTINUED: And the work-around?…
Page 1 | 2

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14 comments

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I knew it
NTP will lose. Know why? Because RIM's lobbyists will convince the judge that NTP is an extortionist and the judge will rule against the injunction. Plus, the second denial for the patent came in at the same time.

In some ways, this is really unfair for NTP. RIM's lobbyists are probably having a direct effect on the decision making process for the courts. But, NTP is really acting like a child and probably deserves it.

Yeah for capitalism!
Posted by thenet411 (415 comments )
Reply Link Flag
Problem.
Personally, I don't think an injuction should be allowed until after the patents are finally validated or invalidated. I think that companies like NTP and RIM are prime examples of why reform is needed. The unfortunate part is that in the end the reform will probably only benifit big companies and patent holding companies.

Either way the small guy will get screwed 80% of the time.
Posted by System Tyrant (1453 comments )
Link Flag
The beat goes on
And the beat goes on
La de da de de, la de da de da
Posted by yrrahxob (77 comments )
Reply Link Flag
To Hell with them all....
Maybe NTP does own the key patents. Maybe RIM was inviolation
=of those patents. Now, NTP wants to rip RIM a new bunghole in
compensation top keep the service running.

RIM should tell NTP to go to Hell and totally shut down
Blackberry, INCLUDING the government dweebs who are
pleading for exclusion from any court decision. No ransom, no
tribute, no payment, and no Washington sycophants thumb
typing their inane messages.

Rim gets nothing, NTP gets nothing, The government dweebs
get nothing - a nice even up solution.
Posted by Earl Benser (4310 comments )
Reply Link Flag
No surprise, this will drag on forever
Unitl the patent process makes it clear that patents should be used and not horded, other companies will behave like NTP.
Posted by Sadie_DC (1 comment )
Reply Link Flag
Weird World
It's been said before but people who dream up ideas and patent them without ever implementing them should not have the patents granted.

I think the ultimate insult goes to RIM who stand to lose a couple of hundred million dollars, even if the NTP patents are all scratched.

The Patent system should be revised thus:
1. Only applications where a working prototype is available will be considered.

2. The appeals system for patent applications should remain within the patent office and not federal courts.

3. If you take someone to court for infringement and win, but the patents are subsequently dismissed, you should lose the damages awarded and have costs awarded against you.

This may seem harsh but each point would have the following effect:

1. True innovation comes from identifying a problem and solving it, not from having your lawyer document an idea.

2. The patent office should be beefed up (not have budgets cut) so they have access to the best brains in any area to pass an opinion rather than going to a jury of people who undoubtedly are unfamiliar with the concepts and are open to being swayed by some silver tongued lawyer arguing a point.

3. Ultimatley NTP may find they have no valid patent in this case, which means they have achieved income through threatening behaviour i.e. we will take you to court if you don't licence our technology. I thought this was extortion. Knowing you might not keep your initial damages would stop these tenuous cases.

This might sound as though it favours the big players with deep pockets, but quite the contrary - unless you have proven your idea you don't have a case and you wont take the risk of bringing a case unless you are completely convinced of its validity. It really becomes a case of first to dream it, do it, file it wins.
Posted by intellibloke (3 comments )
Reply Link Flag
I've managed to get plenty of patents allowed after final rejection
happens all the time, in fact. So it isn't quite accurate to say the PTO has found these patents to be invalid. Yet. But given the state of reexamination, it hardly seems appropriate for the judge to grant an injuntion in this case. If the patents are upheld, in whole or in part, then greater damages may accrue and RIM will have to pay them. But if the patents go down in flames, then RIM (and their users) will have been harmed for nothing.
Posted by Musmanno (101 comments )
Reply Link Flag
Is RIM a patent pirate?
Mr. Balsillie, chairman and co-CEO of Research in Motion (RIM) has very efficient public relations and lobbying operations which plead his case in media and on the Hill while a multitude of RIM's victims for the most part suffer in silence. As you will see below - we of the Professional Inventors Alliance (PIAUSA.org) strongly believe that he and his company RIM - are clearly the "patent abusers" and we are disappointed that most of media does little more than repeat RIM's self serving propaganda! We understand that big money speaks loudly in the political process but are disappointed that most of media is failing to do due diligence before writing about these issues.


Based in part on the information detailed below, we believe that RIM has demonstrated an appetite for others intellectual property.



The best known case is RIMs attempt to deny inventor Thomas J. Campana and his family justice in the RIM v. NTP dispute. So many innovators' stories are tragic because well heeled predators decide to take their inventions. In this case, an American inventor and small business person died in 2004 without seeing justice. Justice delayed is truly justice denied. We should all pause to think about the injustices American innovators may be suffering at the hands of RIM and all the other inventors who are suffering similarly across America. .



In addition to the NTP case where RIM was caught red handed trying to foist contrived evidence on the court, RIM was sued by the University of Texas for patent infringement and paid $1.8 million dollars to settle that case. RIM also was alleged to have infringed a patent held by Antor Media Corporation.



Even more recently an American inventor of predictive text Howard Gutowitz, who owns a small company named Eatoni Ergonomics, tried to license his inventions to RIM. RIM responded with a lawsuit. This is a common tactic of deep pocketed companies, which often is a ploy to bankrupt financially weaker inventors. Our organization, PIAUSA.org has helped this inventor make contact with those who are in a position to stay the course until justice is achieved.



It is our opinion that RIM's litigation with Howard Gutowitz may well become as contentious and self destructive as their battle with NTP. How will investors and end users react when they discover that RIM is facing a very similar situation to the NTP case? What businesses will deploy RIM services when they have legitimately licensed alternatives such as Visto and Good Technology and the Palm Treo? Why isn't our government switching to reputable service providers who respect American innovator's intellectual property? And perhaps the most important question is why some of our representatives are backing patent pirates!



In light of RIMs rash actions, can investors or users have any confidence that RIM will not make similar decisions in the future?



Mr. Balsillie made some outrageous claims in a WSJ editorial letter regarding NTPs abuse of the patent system. It is our understanding from off record USPTO sources that RIM lobbied the USPTO to initiate reexaminations of NTP's patents and in concert with their PR and political efforts also made many reexamination requests through normal and back channels as evidenced by Rep. Tom Davis (R-Va.) outrageous comments. Rep Davis has been reported to have said the BlackBerry case exposed inefficiencies with how the Patent and Trademark Office operates.



What the RIM case demonstrates is that American inventors' are being discouraged by patent pirates at a time when we desperately need those inventors and the jobs they create. This sin is being compounded by the sin of a coalition of patent pirates vision of a reformed patent system which would make inventing a kings sport. A system where innovators do not have a prayer of building the next generation of innovative companies.



During a reexamination an inventor is entitled to add claims as long as such claims are supported by the original disclosure. Seeking the full coverage which an inventor is entitled to under law is not an abuse of the system. This is especially true when the reexamination was forced on the inventor. We did not find RIM's claims of patent system abuse by NTP to be credible, and the large number of reexamination requests made by RIM is a perfect example of how an opponent of an inventor who has deep pockets can and does abuse the patent system to create delays and unduly burden invention based small business with the goal of bankrupting them. When an inventor is crushed financially, the infringer wins by default.



The USPTO has become increasingly politicized over the last decade. When faced with a hot potato like the RIM v. NTP case and the fact that RIM is politically savvy while NTP and the other victims of an insatiable appetite for other's invention are not, the USPTO is anxious to lob the hot potato into the appellate courts. This is not the first case PIAUSA.org has seen such conduct from the USPTO. It is unfortunate that the agency can be influenced by companies who pirate inventors property and a gross injustice to America's inventors and the public.



In light of RIM's pattern of patent disputes, PIAUSA finds it hard to believe that RIM is always the injured party.



It is common for young successful companies to feel invincible. There are a number of contemporary examples of such companies who act like bullies when it comes to their use of the intellectual property of others.



While such tactics may often work for years, sooner or later companies who take others intellectual property do meet their match. The results often take a severe toll on them. Those who live by the sword, eventually die by it. It is those companies who unjustly appropriate other's intellectual property who are howling for changes to the patent system which would cement their positions and legitimize their appropriation of other's property.



It seems that what RIM may lack in an ability to invent for themselves, they make up in marketing, public relations, and lobbying savvy. There is no doubt that RIM is very sophisticated in those areas.



Mr. Balsillie makes some rather sweeping claims about America's patent system, claims which Mr. Davis parrots. Like other companies who are being held accountable for taking liberties with others' inventions, they claim our patent system is deficient. On the contrary, it is that patent system which has fueled our economy and there is no question that America is the greatest economic success story in the world today in large part due to our exceptional patent system.



Many foreign competitors would like to see our successful country pulled down to their levels. The reforms which RIM and our own multinational companies are promoting are designed to protect those company's vested interests but would kill the patent system which has made America, truly the land of opportunity.



Some companies who pirate others intellectual property make self serving claims that there is consensus among experts supporting their agenda for reforming the patent system. These claims are false. Dr. Irving Kayton, a top IP law expert in the US is adamantly opposed to the changes being proposed as was recently deceased former patent commissioner Don Banner and a multitude of other intellectual property experts and patent practioners also oppose so called patent reform.



Inventors and the companies they form are the seeds of new industries  examples being HP, Apple, Edison, the Wright brothers, Gordon Gould (LASER), Wilson Greatbatch (Pacemaker), and Dr. Ray Damadian (MRI). They create jobs and tax base. As long as inventors control their companies their ties to the community keep those businesses in those communities. When American innovators property is taken -- society's losses are greater than the loss the inventor suffers. When an innovators life blood is sapped by protracted litigation -- their ability to innovate and build businesses is crushed along with the businesses they can no longer support and nurture. When large companies get away with taking inventions the benefits of those inventions generally end up in a low wage country while the patent pirate's business unjustly profits from its acts. In the end it is the American public that is impoverished.



Adding insult to injury is the massive PR campaign being orchestrated by abusive companies. In my opinion it is truly ironic that RIM and other companies with similar mindsets are painting those they abuse as abusers. This is an example of doublespeak and of spin at its best.



Many years ago I observed that some CEO's as being similar to teenage boys, big egos - little thought before engaging those egos, short term gain orientation and marginally developed sense of ethics. The situation which RIM and several other companies who have been accused of pirating other's inventions most certainly reinforces this observation.



====



The Professional Inventors Alliance USA was created more than a decade ago to protect American invention and encourage innovation. American inventors saw a need to track congressional legislation and federal policy that impacts independent inventors, small and medium-sized businesses and colleges and universities. The Alliance is the premiere organization in the nation, providing independent inventors a united voice in order to improve public policy.

The Alliance provides legislative counsel, congressional updates and strategy development to its members through a number of vehicles. Additionally, through its speakers bureau, Alliance members have an opportunity to provide expert opinion to many of the nations top-tier business, technology and mainstream media organizations. Over the years its members have testified before Congress, offered counsel to key Senate and House committee members, and successfully pushed legislation to protect Americas independent inventors.

Since its inception, the organization has grown into one of the most vocal advocates for Americas patent system.


Ronald J Riley, President
Professional Inventors Alliance
www.PIAUSA.org
RJR (at) PIAUSA.org
Change "at" to @
RJR Direct # (202) 318-1595
Posted by Ronald J Riley (27 comments )
Reply Link Flag
Wrong place idiot
This is NOT the forum for your moronic, diarhea of the mouth diatribe. Not to mention, you couldn't be more wrong. NTP is the guilty party here. They exist for no reason. They are entitled to nothing. They will lose. And we will all laugh. Way to go idiot.
Posted by thenet411 (415 comments )
Link Flag
Dammit
I already posted that this is the wrong place for that diarhea of the mouth diatribe. Now, its gone? Way to go, CNET. You've taken censorship to a new level.
Posted by thenet411 (415 comments )
Link Flag
My view on Patents.
First let me say I think you are preaching to the wrong people. From the many post I have read most people here want to see software patents done away with completly.

In my view the patent system doesn't work the way it was intended and needs major reform. Of course if this every happens it will it probably will just screw the individual inventor while helping corporations and patent holding companies get rich. I love America and it may be the best thing the worlds got, but frankly it's a country of greed and secrets.
Posted by System Tyrant (1453 comments )
Link Flag
Patents and the current system....
I am our department's patent reviewer, from a technical perspective, when we have patent issues / questions. I have also been closely involved with the writing of several patents. I have come to the conclusion that ANY patent can eventually be written and re-written until it passes; all you have to do is put up enough funds and find a lawyer willing to take your money! If the system is so good; how come we even have patents for the cardboard coffee cup insulators? And we don't just have ONE patent for this invention (?)! For gosh sakes; IT'S A PIECE OF CARDBOARD!!!! I have seen patents for the perforated corners of my softener salt bags. All clever ideas; but patentable; come on! This current system is all about making lawyers rich; nothing else. I recently was checking out patents for baseball catcher's masks; we have them dating back to 1896. How many times do we need to patent that idea? I once had the understanding that IF you asked for a patent; you actually HAD TO BUILD the device.... (see the Selden automobile).... Now we have relatives of inventors and 'trawling' companies that couldn't actually make the original idea work; even if they wanted to. Pretty pathetic if you ask me. No wonder Asia is about to 'eat-our-lunch'!
Posted by johnd3 (1 comment )
Link Flag
Some are valid
I take exception to those who bring in the "CrackBerry" comments or blow off the need for the devices. I am a therapist and consultant who has patients on life critical situations and events that sometimes demand fast response. As a consultant who spends very little time at his desk, the same applies. I don't do this for fun I use it for survival of both myself and my clients. What did I do before, well my practice was not the nature it is now - I changed it because I had this access. Going back would take a lot of time and hurt people in the process.

So, consider that point of view in your judeement.
Posted by speak2u (2 comments )
Reply Link Flag
Some are valid
I take exception to those who bring in the "CrackBerry" comments or blow off the need for the devices. I am a therapist and consultant who has patients on life critical situations and events that sometimes demand fast response. As a consultant who spends very little time at his desk, the same applies. I don't do this for fun I use it for survival of both myself and my clients. What did I do before, well my practice was not the nature it is now - I changed it because I had this access. Going back would take a lot of time and hurt people in the process.

So, consider that point of view in your judeement.
Posted by speak2u (2 comments )
Reply Link Flag
 

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