The twisting saga of the patent infingement case between Research in Motion (RIM) and patent holding firm NTP took another strange step forward this week as the US Patent and Trademark Office (USPTO) enagaged an unusual postal beatdown of NTP's patent claims. In a letter sent to both firms, the USPTO announced that all five of NTP's contested patents had been preliminarily overturned, and that the decision was likely to become final early next year. That giant whooshing sound you hear is BlackBerry users everywhere breathing a collective sigh of relief.
RIM and NTP have been going at it in court for several years now over the patents, which allegedly cover the BlackBerry's "push" e-mail capabilities. RIM has consistently lost in court, beginning with a jury trial in 2002 in which they were ordered to pay US$23 million in damages. The amount was bumped up to US53.7 million on appeal and an injunction (later reversed) would have prohibited RIM from selling Blackberries in the US until a settlement was reached. After talks, the companies agreed to a US$450 million payout from RIM to cover both damages and a perpetual license for the patents, but RIM soon refused payment and alleged that NTP was not living up to its obligations in the deal. Finally, a few weeks back, a new round of talks produced what looked to be agreementóRIM would pay 5.7 percent of all US revenues in perpetuity to NTP.
Just when it looked like a settlement was at hand, along comes the USPTO, which is clearly under some pressure to move the patent review process along. In addition to announcing that NTP was unlikely to prevail, their letter also mentioned that they were speeding up the review process as a direct result of Judge James Spencer's frustration with the slowness of the proceedings. Extra staff has been assigned to the case, and one wonders if the USPTO was worried about being on the hook for a whole lot of money if RIM had to pay out over patents that never should have been granted. This is a big win for RIM, since it looks like the review process could be concluded before the judge decides what to do about issuing an injuction against RIM.
"It was a resounding rejection of NTP's position," James Balsillie, Research In Motion's chairman and co-chief executive, said by telephone. "The jig is up. I think the world is now starting to realize what is happening."
The hope for RIM is that all their legal troubles will go away if the patents are overturned, but NTP, so close now to so much money, is not about to let a little thing like patents stop them. Said David Stout, one of NTP's co-founders:
"We're not going to go away silently. Unless the case is settled, it keeps on going."
The next likely step for NTP is an appeal of their patents, a procedure that could take years. Until then, though, it looks like sales of the CrackBerry can continue.