- The Washington Times - Monday, January 23, 2006

ASSOCIATED PRESS

The long-running battle over patents for the hand-held BlackBerry is headed back to federal court in Richmond, where the fate of the popular wireless e-mail device may be decided.

The Supreme Court chose yesterday not to intervene in the case, leaving the dispute to U.S. District Judge James R. Spencer.

Although the judge could impose an injunction and block BlackBerry use among many of its estimated 3 million owners in the United States, many analysts expect Research In Motion Ltd., the device’s maker, to strike a deal with the patent holder or introduce changes to work around the patents.

Even if Judge Spencer orders a partial shutdown, analysts said, he is likely to give users at least 30 days to switch to competing companies that provide wireless e-mail service.

Lawyers for NTP Inc., a small Northern Virginia firm that says it owns the patent on the technology that makes the BlackBerry work, have said government and emergency workers would be exempt from any BlackBerry blackout. Others who have come to rely on the device — such as lawyers, business travelers and brokers — might be out of luck.

Research in Motion (RIM) had asked the justices to decide whether U.S. patent law is technologically out of date in the age of the Internet and the global marketplace.

At issue was how U.S. law applies to technology that is used in a foreign country and is accused of infringing on the intellectual property rights of a patent holder in the United States.

RIM, a Canadian company, had contended that it cannot be held liable for patent infringement because its main relay station for e-mail and data transmission is located in Waterloo, Ontario.

But a federal appeals court had found that the Canadian company had infringed on the patents held by NTP because customers use the BlackBerry inside U.S. borders. The lower court said it did not matter where the relay station is located.

Stephen B. Maebius, a Washington patent lawyer, said the Supreme Court’s refusal to intervene leaves RIM with one less option.

“The noose is getting a little tighter,” he said.

Mr. Maebius said Judge Spencer is unlikely to be influenced by separate proceedings by the U.S. Patent and Trademark Office, where RIM has won a preliminary victory. The patent office could issue its final rejections of NTP’s patents in coming weeks.

Judge Spencer, meanwhile, has set a Feb. 1 deadline for filings on whether he should issue an injunction.

Kevin Anderson, who represents NTP, said the company is pleased with the court’s action.

“We think the Supreme Court’s rejection of RIM’s position makes it clear that RIM should stop defying the U.S. legal system,” he said.

RIM sought to play down the significance of the court’s rejection.

“RIM has consistently acknowledged that Supreme Court review is granted in only a small percentage of cases, and we were not banking on Supreme Court review,” said Mark Guibert, RIM’s vice president for corporate marketing. “RIM’s legal arguments for the District Court remain strong, and our software workaround designs remain a solid contingency.”

Since its introduction in 1999, the BlackBerry has revolutionized the business world, allowing people to stay in constant e-mail contact with their offices and customers while they are away from their desktop computers.

The uncertainty spawned by the case has contributed to volatility in RIM’s stock. The company’s shares fell $2.18, or 3.3 percent, to $64.44 in afternoon trading on the Nasdaq Stock Market. They have traded in the 52-week range of $51.90.

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