March 3, 2006 2:27 PM PST
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BlackBerry case: No shutoff, for nowFebruary 24, 2006
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Earnings per share, excluding costs related to the NTP litigation, were expected to be between 64 cents and 66 cents. The company had forecast earnings per share of 76 cents to 81 cents.
Net subscriber accounts for the quarter were expected to be in the range of 620,000 to 630,000, well below the 700,000 to 750,000 forecast in December.
Jim Balsillie, Research In Motion co-CEO, called Friday's agreement with NTP the "final settlement" in the long-running case.
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RIM had 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 turned to two other areas: the patent re-examination process and RIM's "work-around."
In recent weeks, the prospect of a BlackBerry shutdown had loyal users of the device fretting about the prospect of losing their mobile e-mail service.
"We have been informed that the case was amicably settled and we are pleased that the resolution reached will preserve the public interest in the use of RIM's technology," said Cynthia Magnuson, a U.S. Department of Justice spokeswoman. The department had argued before the court that a BlackBerry shutoff would be devastating to government users.
On Capitol Hill, stomping grounds for hundreds of 'Berry-dependent politicians and staffers, the details of the settlement had not yet been digested but drew initial positive reactions.
"If this means that service will not be disrupted in any way, shape or form, then obviously, we're very happy that's the case," said John Brandt, communications director for the U.S. House of Representatives Administration Committee, which oversaw the purchase of BlackBerrys for all 435 House members back in 2001.
The news was welcome in other quarters as well.
"Those of us who rely on instant access to our corporate e-mail are breathing a huge sigh of relief--our significant others, maybe not," said Frank Gillman, chief technology officer at the Los Angeles law firm Allen Matkins.
The settlement announcement was no surprise to Michael Sacksteder, a patent litigation partner at Fenwick & West in San Francisco. "When you are terrified and hopeful at the same time, and you're going to find out one way or another soon, that's when parties tend to resolve what have seemed to be unresolvable situations," he said.
Sacksteder said he thought NTP would continue to pursue appeals of the patents for which the U.S. Patent and Trademark Office recently issued "final office actions" rejecting their validity. "The way that the procedure works is that after time expires for appealing under the statute, the Patent Office issues a re-exam certificate that says your claims have been cancelled and you don't have a patent anymore, and I'm sure that they dont want that to happen," he said, noting that "there might be other targets" for infringement claims from the company.
A representative for NTP declined to comment beyond a press release distributed by the company Friday. "NTP is pleased the issue has been resolved and looks forward to enhancing its businesses," Donald Stout, NTP's co-founder, said in the release.
"It's better late than never," said Rob Enderle, principal analyst with The Enderle Group. "But their customer base is not going to forgive them for RIM turning them into cannon fodder during the process."
"Bottom line, this is very good news for BlackBerry users," said Tim Bajarin, president of Creative Strategies. "It means their service will continue, and it allows RIM to continue going after corporate business."
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