RIM Under a Death Sentence, Gets a Stay of Execution

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Research In Motion, maker of the Blackberry line of wireless handhelds, has been involved in a bitter patent-infringement lawsuit with NTP Inc. for several years. The judge in the case has ruled in NTP’s favor several times in the past and this week issued an injunction that blocks RIM from selling the Blackberry in the U.S. However, the judge also ruled that this not go into effect until after RIM has had a chance to appeal the decision.

The lawsuit between RIM and NTP stems from a dispute over eight patents held by NTP that relate to wireless email processing. NTP contends that RIM’s BlackBerry handhelds infringe on those patents and filed suit in November 2001, seeking to prevent RIM from selling the devices. Last November, a U.S. jury found in NTP’s favor.

The U.S. District Court judge in Virginia has also increased the fine RIM has to pay to $53.7 million. Last spring it ordered RIM to pay NTP a royalty of 8.6% on every wireless handheld it sells.

Henry Bunsow, RIM’s lead counsel, said, “RIM has always disputed the validity and infringement of the NTP Inc. patents and we continue to believe the jury verdict was wrong as both a matter of law and fact. We now look forward to the thorough reexamination of these patents by the U.S. Patent and Trademark Office and to the review of the entire record by the Court of Appeals. While the remaining reexamination and appeal processes may take several years to complete, we remain confident that RIM will ultimately prevail in this matter.”

If RIM loses its appeal and the judge’s injunction goes in effect, the company will effectively be out of business. It will be barred from selling wireless handhelds, wireless service, and software in the U.S., its largest market. However, RIM remains optimistic about its chances of winning an appeal. Even if it loses, it will have option of staying in business by paying a licensing fee to NTP.

NTP is also in negotiations with several other companies to license its patents.

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