RIM Appeals Against US Court Decision to Shut Down Blackberry Sales

Earlier this month, Research In Motion (RIM) of Waterloo, Canada, argued its case before the US Court of Appeals for the Federal Circuit against a lower court's decision to stop RIM from selling its popular hand-held radio frequency e-mail device (Blackberry) and pay US$54 million in damages for infringing five patents owned by NTP Inc (NTP), an Arlington, Viginia-based company. The lower court had earlier stayed the injunction order pending the outcome of an appeal, and funds representing damages are being held in escrow. In court, lawyers for RIM argued that the lower court had committed certain procedural errors requiring the Appeal Court's intervention. On issues of substance, RIM claimed that US patent law did not apply to the case because a RIM control centre essential to the operations of the Blackberry is located outside United States' jurisdiction, in Canada. NTP responded that the fact that the right to use the system was being marketed in the US brought it within US jurisdiction. RIM further argued that the NTP patents covered old technology more akin to "a pager that receives e-mail" (physically separated mobile device and processor) which did not encompass the Blackberry (integrated device and processor) and that, in any case, the five patents were invalid. The validity of these five NTP patents is also under review by the United States Patent and Trademark Office. In 2003, re-examination of these patents commenced on the basis that some relevant prior art had not been considered during initial application process for the patents. The uncertainty of this litigation has led Nokia Corp, the world's largest manufacturer of mobile phones and handheld computers, to hedge its bet by licensing NTP's technology. Nokia had earlier contracted with RIM to provide the latter's e-mail services on its handheld devices. This patent licensing agreement will allow Nokia to sell its handheld devices in the US, the use of which devices will remain dependent on RIM's e-mail services. Industry observers expect that the parties in litigation will settle. For other reports, see: http://makeashorterlink.com/?Y2E312F98; or http://makeashorterlink.com/?D32422F98. Summary by: Peter Wang