TELECOM Digest OnLine - Sorted: RIM Faces Loss of U.S. Market For BlackBerry

RIM Faces Loss of U.S. Market For BlackBerry

Monty Solomon (
Sun, 9 Oct 2005 14:19:53 -0400

Sales injunction possible from patent case


Research In Motion Ltd. faces the spectre of an injunction against
sales of its BlackBerry communications products in the United States
after a court there yesterday refused to rehear a patent infringement
case against the company.

The U.S. Court of Appeals for the Federal Circuit in Washington denied
RIM's request that its full slate of 12 judges hear the case. In
August, a panel of three of the court's judges upheld most of a jury
ruling that found RIM had infringed on patents held by NTP Inc., a
patent holding firm in Virginia.

While the decision was not unexpected, the prospect of the injunction
sent shares of the Waterloo, Ont.-based company tumbling as much as 10
per cent. They closed on the Toronto Stock Exchange down 4 per cent,
or $3.20, at $75.95.

The U.S. accounts for about 70 per cent of RIM's total sales.

The dispute between the two companies now heads back to district court
in Virginia, where NTP says it will seek to have a previously awarded
injunction imposed.

RIM, however, said it will ask the federal court to stay further
proceedings while the company tries to persuade the U.S. Supreme Court
to review the appeal court's August decision.

Legal experts don't expect the top court to hear the case because it
already has a couple of intellectual property cases before it. But in
a news release, RIM said the case "raises significant national and
international issues warranting further appellate review."

Specifically, the company has argued that, because parts of the
alleged infringement occurred on its relay and routing system that is
based in Canada, U.S. patent law should not apply. Under U.S. law, the
territorial reach of a patent is limited and generally only
enforceable if the infringement occurs in the United States. However,
both the district court and appeals court rejected this argument.

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