Research in Motion Ltd was given a temporary reprieve on an injunction being handed down against its US wireless email service on Friday, but the judge left little room for doubt that he expects the company to quickly settle its patent infringement suit with NTP Inc.
Judge James Spencer of the Virginia court where the long-running case is being heard said that he was absolutely surprised that the companies had not managed to reach an out-of-court settlement, and that he would rule on an injunction and damages as soon as reasonably possible.
The case should have been settled. But it hasn’t. So I have to deal with that reality, he said, according to a transcript of his closing remarks at a Friday hearing.
RIM was found to have infringed NTP’s patents in 2002, after being sued a year earlier. RIM, naturally, appealed, and the case has been running in tandem with settlement talks ever since. The Canadian company’s appeals have been unsuccessful.
I’ve always thought that this, in the end, was really a business decision. And yet you have left the decision in the legal arena, and that’s what you’re going to get, a legal decision, Spencer said. He indicated that he would probably rule on damages before deciding on an injunction.
About 70% of RIM’s business, about $1.3bn, comes from sales in the US, where an injunction would be effective. RIM has placed $250m in escrow to pay the possible damages. It offered to settle for $450m last year, but NTP, having first apparently agreed, rejected the deal.
We want all BlackBerry users to know that we have repeatedly attempted to settle this issue with RIM, including trying to meet with them this week, NTP said in a statement Friday. We always have and continue to offer RIM a license that fully protects everyone… RIM has rejected our efforts.
RIM says it has developed a software patch that will allow continued use of BlackBerry services in the US while not infringing on the NTP patents. In light of this, Judge Spencer expressed confusion with RIM’s position that a BlackBerry shutdown would be calamitous.
For BlackBerry users, and there are a few million in the US, most observers expect the switch to be at most a minor inconvenience. The US government has asked the court for special treatment for government and emergency workers who use BlackBerries.
According to NTP, RIM’s high-priced Washington lobbyists are also leaning heavily on the US Patent and Trademark Office to speedily finish reviewing and revoking NTP’s patents.
RIM announced Friday that the PTO has now reexamined issued final rejections of two of NTP patents it was found to have infringed. In other words, the patents should never have been issued in the first place. All of the patents have been rejected on a preliminary basis.
But timing is everything. NTP is allowed to appeal the reexamination rulings at the PTO and in court, and Judge Spencer has indicated that he is not prepared to wait for this process to play itself out before issuing his rulings.
NTP is a patent holding company that does not do anything useful with its patents, so it must be profoundly frustrating for RIM that it may be forced to hand over a big wedge of cash to license patents that may end up proved invalid, with little hope of recovering the money.