BlackBerry Maker Is Emboldened
By Patent Office
By ELENA CHERNEY and STUART WEINBERG
Staff Reporters of THE WALL STREET JOURNAL
December 17, 2005; Page A3
Buoyed by a patent-office ruling, BlackBerry-maker Research In Motion Ltd. appears to be gearing up for a court showdown with patent-holder NTP Inc. rather than the last-minute settlement most analysts expect.
In an unusual move pointing to the case's high stakes, the U.S. Patent and Trademark Office said it plans to fast-track its re-examination of five NTP patents that a U.S. District Court in Virginia in 2002 found were infringed upon by RIM. The patent office has already rejected three of the patents, but hasn't yet finalized the rejections.
RIM faces a potential ban on sales of BlackBerry devices and email service in the U.S. The two companies have been widely expected to reach a settlement and exchanged proposals as recently as last week. Both sides are now waiting for Judge James Spencer to set dates to submit briefs on the possible ban.
The patent office's move to speed its re-examination of the NTP patents may bolster RIM's position. Earlier this fall, Judge Spencer refused RIM's request to halt the case pending the patent office rulings, saying the rulings would take more than a few months and he didn't want to stall the case for that long.
Now, people close to the company say RIM is encouraged because the patent office appears to be addressing the judge's concerns about timing. In a ruling this week denying an NTP request for a delay, the patent office said that "given the District Court's concerns" and "the outstanding public interest in ensuring that these proceedings are handled with special dispatch," it has assigned a "dedicated examining team" to the re-examination of the NTP patents.
RIM's vice-president of marketing, Mark Guibert, said, "We think the court will want to take this new information into account in order to make informed decisions as the case proceeds."
NTP lawyer James Wallace said the patent office's faster re-examination will give NTP only 30 days to respond to preliminary rejections of its patents instead of the customary 60 days. He said that Judge Spencer has already indicated he wouldn't wait for the patent office re-examination.
Patent lawyers who have been following the case said the patent office's move in the NTP matter is highly unusual. Judge Spencer is likely to consider the move in deciding whether to impose the injunction, said Scott Creasman, a lawyer with the firm Powell Goldstein in Atlanta. If Judge Spencer does impose the BlackBerry ban, the patent office move "makes it more likely that an appellate court would knock back an injunction," Mr. Creasman said.
Even if the patent office moves quickly on its final rulings, NTP still has the chance to appeal the rulings within the patent office, a spokeswoman for the office said. If it loses there, NTP can take its appeal to federal court, she said.
RIM has said it has developed "work-around" technology that would enable it to offer BlackBerry service without violating the injunction. By using the new technology, RIM could continue fighting in the courts while it waits for the final patent-office ruling, even if it faces an injunction, said patent lawyer Mark Kesslen of the New Jersey firm Lowenstein Sandler. Some analysts have expressed skepticism about the work-around, however, noting that RIM has disclosed little about it.
Earlier this month, NTP and RIM swapped proposals, and NTP offered to settle the case for a payment equal to 5.7% of BlackBerry's projected revenue until 2012, an amount that has been estimated around $900 million.
Now, with the patent office moving more quickly, any settlement talks are likely to involve a lower number, said Mr. Kesslen.
Write to Elena Cherney at
1 and Stuart Weinberg at