Judge to RIM: We're not delaying this any longer

By Declan McCullagh
Staff Writer, CNET News.com

Published: November 30, 2005, 8:40 AM PST

Last modified: November 30, 2005, 10:02 AM PST

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update Research In Motion on Wednesday lost two rounds in the long-running patent lawsuit that threatens to imperil the company's BlackBerry service in the United States.

U.S. District Judge James Spencer denied RIM's request to halt the proceedings until the U.S. Patent and Trademark Office re-examines whether the patents are valid. Spencer said judges are under no obligation to wait and suggested that the re-examination process could take up to 10 years, if appeals are counted.

In a second order released Wednesday, the judge also rejected a $450 million settlement reached earlier in the year between RIM and NTP--a small patent-holding company in Arlington, Va., that filed the lawsuit--saying it was not "valid and enforceable." That settlement fell apart in June.

"This court cannot and will not grant RIM the extraordinary remedy of delaying these proceedings any further than they already have been based on conjecture," Spencer wrote, noting that RIM was found liable for patent infringement after a jury trial more than three years ago.

Canada's RIM can avoid any U.S. service shutdown if it can find some way to prevail in court or if it chooses to pay to license the patents from NTP. Jim Balsillie, RIM's co-chief executive, also has claimed that RIM has a backup "workaround" for BlackBerry devices and their accompanying servers that could be used if necessary--and prevent BlackBerry customers from being disconnected.

NTP said in a statement that Wednesday's rulings "permit the case to continue moving forward to address the remaining issues in this case, including reconfirmation of an injunction that prohibits RIM from selling, using or importing into the United States infringing BlackBerry hardware and software." RIM did not immediately respond to an interview request.

If the judge does grant a permanent injunction, and RIM's technical workaround fails, the company would be forced to pay a hefty fee to keep its U.S. BlackBerry service operational. (It has about $1.2 billion in cash on hand.) Any injunction, however, would not cut off BlackBerry service to government officials--only to individuals and businesses.

Spencer said he will set up a briefing schedule "on the remaining issues of injunctive relief and appropriate damages." As of August, the court-estimated damages were approximately $210 million.

Last December, a federal appeals court ruled that NTP's patents had been violated but said RIM could continue selling its products until proceedings in the district court were complete. The court slightly amended its ruling in August, and the U.S. Supreme Court declined to intervene.

Final rulings from the U.S. Patent and Trademark Office on re-examinations of eight NTP patents related to the NTP-RIM litigation are still pending. RIM, claiming that the Patent Office should not have issued NTP's patents in the first place, in August asked that the patents' validity be re-examined.

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