October 26, 2005 10:51 AM PDT

Supreme Court won't hear RIM suit

The U.S. Supreme Court on Wednesday declined to consider an emergency appeal by Research In Motion to review a long-running patent suit that could shut down RIM's BlackBerry service in the United States.

U.S. Chief Justice John Roberts, who handles last-minute appeals, did not comment on the rejection of RIM's emergency application. The company asked the high court on Monday to halt a decision by a lower court that could enforce a 2-year-old injunction.

Despite the potential threat of having to shutter its service, RIM could avoid a U.S. shutdown if it ultimately wins the case or decides to license the patent from NTP. Jim Balsillie, RIM's co-chief executive officer, has also noted that RIM has a backup plan or software "workaround" for BlackBerry devices and their respective servers should the company fail to convince the courts of its case. Therefore, BlackBerry customers are unlikely to have their service disrupted.

As things now stand, RIM could re-appeal its case to another member of the Supreme Court, although a different ruling is considered a legal long shot by analysts. Roberts' decision mirrors a

The next step in the litigation is expected to be a scheduling conference between RIM, NTP and the District Court within the next few weeks to begin discussing the subject and timing of further proceedings, including any motions for additional injunctions that NTP may file, RIM said.

The Supreme Court's announcement is the latest development in a long-running legal battle between Waterloo, Ontario-based RIM and U.S. patent-holding company NTP, which successfully sued RIM for patent infringement in 2002.

The case is scheduled to head back to U.S. District Court in Richmond, Va., which issued the initial injunction in 2003. RIM has continued selling its BlackBerry devices in the United States for the last two years while courts have reviewed the case.

U.S. District Court Judge James Spencer, who presided over the original decision, is expected to consider whether to enforce an injunction prohibiting RIM from selling, using or importing into the United States any BlackBerry hardware and software that infringes on NTP patents until those patents expire in 2012.

Spencer also will consider the tentative $450 million licensing settlement struck between RIM and NTP in March 2005, which was abandoned in June after the U.S. Patent and Trademark Office began re-reviewing NTP's patents relating to radio frequency wireless communications in e-mail systems. RIM's BlackBerry devices and messaging service allow wireless always-on access to e-mail and corporate data on portable devices.

Final rulings from the U.S. Patent and Trademark Office on re-examinations of all eight NTP patents related to the NTP-RIM litigation are still pending. RIM, asserting that the Patent Office should not have issued NTP's patents in the first place, filed a request in August asking for a re-examination of the validity of the patents.

NTP said that if it loses the Patent Office decision, it will appeal the ruling.

As of August 2005, the total damages accrued by RIM for infringement were approximately $210 million, based on an 8.55 percent royalty rate, NTP lawyers said.

Rod Thompson, an intellectual-property lawyer with Farella Braun and Martel in San Francisco, said RIM has some time to play with in the courts, but it may want to settle the suit with NTP considering recent changes in the court's opinions.

"The latest trend in the courts is to get tougher and enforce injunctions on a permanent basis," said Thompson, who is not affiliated with the case. "The court will more than likely side with some aspects of NTP's case, forcing RIM into a corner."

4 comments

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and?
What does this mean to companies that have invested in Blackberry servers? Will we have to shut them off?
Posted by Methuss (101 comments )
Reply Link Flag
Impact on corporate servers
Jeff,
Thanks for the interest in the story. Despite the potential threat of having to shutter its service, RIM customers should not expect to have their service disrupted. RIM could avoid a U.S. shutdown if it ultimately wins the case (that could take years). RIM can also decide to license the patent from NTP (could happen anytime). And then the there is the software "workaround" Jim Balsillie, RIM's co-chief executive officer alluded to.
Posted by msingersfo (24 comments )
Link Flag
and?
What does this mean to companies that have invested in Blackberry servers? Will we have to shut them off?
Posted by Methuss (101 comments )
Reply Link Flag
Impact on corporate servers
Jeff,
Thanks for the interest in the story. Despite the potential threat of having to shutter its service, RIM customers should not expect to have their service disrupted. RIM could avoid a U.S. shutdown if it ultimately wins the case (that could take years). RIM can also decide to license the patent from NTP (could happen anytime). And then the there is the software "workaround" Jim Balsillie, RIM's co-chief executive officer alluded to.
Posted by msingersfo (24 comments )
Link Flag
 

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