RIM creates patent workaround

By Michael Singer
Staff Writer, CNET News.com

Published: June 16, 2005, 6:17 PM PDT

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Research In Motion has come up with a "workaround" to skirt patents at the center of its legal battle with NTP, and the technology could be used with all existing BlackBerry email devices, the firm's co-chief executive said on Thursday.

"We've completed the workaround," RIM chairman and co-CEO Jim Balsillie told CNET's News.com. "We've tested it and we have a legal opinion on it. We have it as an option."

In a phone interview, Balsillie declined to give specifics on the technology, citing both companies' nondisclosure agreements and RIM's so-called quiet period prior to announcing its earnings.

Balsillie said he is prepared to win the long-running legal battle and was encouraged that the director of the U.S. Patent Trademark office asked that four of the five patents in dispute be reexamined--a process that could take years.

The Waterloo, Ontario-based RIM, which helped popularize mobile e-mailing with its thumb-operated BlackBerry, rattled investors earlier this month with news it failed to finalize a $450 million patent dispute settlement with closely held U.S.-based patent holding company NTP.

The patent deal would have resolved the bitter and potentially damaging dispute. The impasse revives the risk of a court injunction that would halt U.S. sales of RIM's flagship wireless e-mail device.

"I'm not trying to change the deal, we are trying to finalize it," Balsillie said. "There are so many shades of gray in this case, but we expect the courts to uphold the agreement."

NTP successfully sued RIM in 2002 for patent infringement, winning an injunction in 2003 to halt U.S. BlackBerry sales that was stayed pending appeals.

In December, a U.S. appeals court upheld the patent infringement finding against RIM, but said part of the earlier ruling was flawed and sent the case back to a lower court.

In other news:

The Canadian company agreed in March to pay $450 million, believed to be one of the largest such settlements, and it predicted the negotiation of a final settlement within weeks.

RIM has now asked a U.S. court to enforce the terms of the March deal. NTP opposes that and says the earlier deal did not constitute a meeting of minds.

In a court filing this week, RIM said the continued litigation "places a cloud of uncertainty" over its business and its ability to supply its technology.

"There's been an effort certainly by people to sort of cast uncertainty (on) our business and we don't want that. And that was part of the motivation for doing the original settlement," Balsillie said.

"We're not trying to change the settlement. We're not trying to pay less. We're not trying to modify the scope. And we really want to put this thing behind us."

Balsillie declined to speculate on when the RIM will hear back from the U.S. courts on the issue. He also said RIM was keeping its eye out for smaller acquisitions that would augment its technology.

"We're not contemplating at this time a big monster acquisition, something that is dramatically outside of our current strategy," he said.

Shares of RIM closed up 2.5 percent, or $1.77, at $73.78 on Nasdaq on a volume of more than 8.4 million. In Toronto, the stock rose C$1.89 to C$91.14.

Reuters contributed to this report.