The US Supreme Court yesterday rejected Research in Motion Ltd’s appeal to review a key patent infringement ruling against the BlackBerry maker.
The news was a victory for patent house NTP Inc, which alleges the BlackBerry infringes on several of its patents and seeks an injunction of the service in the US.
The issue of whether BlackBerries will be silenced in the US will now be resolved in a district court or at the settlement table in coming months.
In the meantime, US mobile operators are picking up jittery BlackBerry customers who aren’t prepared to wait for the outcome.
Rival push e-mail developer Visto Corp said the legal worries surrounding BlackBerries in the US have helped it add as many as 15 new mobile operator customers during the past year, said Visto spokesperson Suzanne Panoplos.
Initially, those operators were just offering BlackBerry, but now are putting in place their own white-label solution to give them flexibility . . . they want an alternative to BlackBerry, Panoplos said. They’ve been kind of hedging their bets all along.
Last year, operators invested in preparing their branded services but 2006 will be the year when more subscribers will start switching to Visto, Panoplos said.
2005 was spent selecting [alternative] e-mail vendors . . . but 2006 is when we will see the uptick, she said.
Other RIM rivals include Good Technology, Motorola, Nokia, Palm and Seven Networks.
Yesterday’s high court ruling follows an October 26 set-back for RIM, in which its request to stay a lower court’s ruling while the Supreme Court considered hearing RIM’s appeal was denied.
Ontario, Canada-based RIM asked the Supreme Court to reverse a previous ruling that the BlackBerry violated NTP patents. The thrust of RIM’s argument to the high court was that US patent law should not apply to Canadian companies.
The fate of BlackBerry service in the US, which is subscribed to by about 2 million customers, now lies with a district judge overseeing the case. A hearing on the case may happen as early as February.
Or the two sides may settle. RIM said, during its earnings call last month, that it estimates its legal liability in the case to be worth $450m. The company already has earmarked $200m to help cover a potential settlement.
But analysts have pegged a settlement price of between $750m and $1bn.
The pair had previously attempted a settlement for $450m in March, but the deal collapsed over a disputed cut-off date. During a December earnings call, RIM chief executive said the two companies were still talking a potential settlement, with the help of a moderator.
Arlington, Virginia-based NTP filed papers with the court asking ahead of the expected February court hearing, in which it asked RIM to pay 5.7% of all BlackBerry sales in the US. The district judge had set a higher 8.85% royalty rate, but 5.7% was the initial rate suggested by the jury.