In the patent case of the century, the day of the reckoning is
today -- Friday, February 24. The U.S. Patent and Trademark Office
(USPTO) has issued a final rejection of one of five patents at the
core of the court case and is expected to invalidate all of
them.
Depending on what a U.S. court decides, it could be a black
Friday for either BlackBerry vendor, Waterloo, Ont.-based Research
in Motion Ltd. (RIM), or NTP Inc., in Arlington, Va. b the two
contenders in what has morphed into a blockbuster legal battle.
About two years ago RIM lost a patent infringement lawsuit in a
U.S. court brought by NTP Inc. The court awarded NTP damages
amounting to US$53.7 million and issued an injunction that would
shut down the operation of the BlackBerry network in the U.S.
RIM got a stay of execution for the injunction, which NTP is
seeking to have reimposed today.
NTP wants royalties from RIM for the BlackBerry service. "We
have said that we are more than willing to license RIM on a
reasonable royalty-paid-up basis," said Jim Wallace, a lawyer with
Wiley Rein & Fielding LLP in Washington and lead trial
counsel for NTP. "RIM has the keys to its own jail."
RIM, however, disputes NTP's patent claims and wants the earlier
injunction to be set aside.
Today's court proceedings could have huge ramifications.
A decision in favour of NTP could shut down RIM's BlackBerry
network and service to four million wireless e-mail subscribers.
(Industry insiders, however, argue an actual shutdown is highly
unlikely. They predict that if the case clearly tilts in favour of
NTP, RIM will either settle at the last minute or introduce
technology to work around NTP's patents).
On the other hand, a win for RIM would avert the impending
shutdown of its BlackBerry service and buy the company time to
negotiate a settlement with NTP.
As it stands, it does seem that RIM has some strong arguments in
its favour:
B7 The weightiest one is recent findings by the U.S. Patent and
Trademark Office (USPTO) that has issued a final rejection of one
of five patents at the core of the court case and is expected to
invalidate all of them. (NTP's stand is the agency has acted under
pressure from RIM lobbyists and officials from Canada);
B7 RIM has in place a workaround software which, it says, does
not infringe on the NTP patents;
B7 A shutdown of the BlackBerry service could affect essential
services.
Recognizing that the recent USPTO rulings are the strongest
weapon in its arsenal, RIM's corporate communications folk are
making the most of that.
For instance, the firm points out that the USPTO has already
rejected all NTP patents in initial and second office actions,
citing "prior art," or existing technology similar to NTP's
patents, had been discovered that was not considered in the initial
2002 trial by NTP against RIM.
RIM's statement about the USPTO findings brought a quick
response from NTP. "RIM's public assertions that NTP's patents have
been invalidated are flatly wrong and intentionally misleading,"
the company said in a statement.
NTP's lawyer, Wallace noted that it could take three years for
Board of Patent Appeals and the U.S. Court of Appeals to hear NTP's
challenge of the patent office's actions.
Even if all of NTP's patents are officially voided by USTPO (and
that won't happen until October), NTP's appeals could run on for
years. Sooner than that, NTP and RIM would probably hash out a
settlement, as they almost managed to do last year.
Again, if the court is not impressed with the workaround
software, RIM may be driven to open its checkbook sooner.
-- With files from IDGNS
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