TELECOM Digest OnLine - Sorted: Judge Delays Blackberrry Cutoff Decision

Judge Delays Blackberrry Cutoff Decision

Peter Kaplan & John Crawley (
Fri, 24 Feb 2006 22:14:03 -0600

By Peter Kaplan and John Crawley

A U.S. judge on Friday stopped short of ordering the shutdown of
millions of BlackBerry devices but made blunt observations about the
case that could nudge manufacturer Research In Motion Ltd. and patent
holder NTP Inc. toward settlement.

U.S. District Judge James Spencer reminded RIM that a jury had already
found it to be infringing NTP's patents and said the parties should
have settled out of court.

"The simple truth, the reality of the jury verdict has not changed,"
Spencer said after nearly four hours of a hearing on whether to grant
NTP an injunction halting BlackBerry service.

"This case should have been settled but it hasn't, so I have to deal
with that reality," said Spencer. "I'm surprised you have left this
decision to the court."

Spencer said he would issue a decision on an injunction "as soon as
reasonably possible" but gave no indication of when.

The delay sent RIM shares soaring, but the judge expressed skepticism
about RIM's argument that a shutdown of the portable e-mail devices
would hobble critical public services.

Spencer noted that RIM had told investors that its software
work-around would avoid disruptions to its more than 3 million
U.S. users.

RIM and NTP reached a tentative settlement of $450 million early last
year, but the deal fell apart. The question now is whether the judge's
comments may push the two sides to reach a pact.

"He certainly wants them to settle. He's giving them one more chance
to do that," said Steve Maebius, a patent attorney with the firm Foley
& Lardner LLP who is following the case.

Martin Glick, a patent lawyer for RIM, said the company was still in
active negotiations with privately held NTP.

"Judges always try to find ways to urge the parties to reach a
resolution," he told reporters outside of court.

NTP said in a statement it had tried to meet with RIM this week. "We
want all BlackBerry users to know that we have repeatedly attempted to
settle this issue with RIM."

RIM shares rose as much as 12.7 percent to $78.38 after Spencer's
announcement but trimmed their gains to close at $74.05 on Nasdaq, up
$4.52 a share or 6.5 percent for the day.

Canada-based RIM has been locked in a court battle for more than four
years with NTP, which filed suit late in 2001. A jury found in favor
of NTP in 2002.

Earlier on Friday, NTP asked Spencer for an injunction against U.S.
BlackBerry service with a 30-day grace period for users to find
alternative service and sought an immediate imposition of $126 million
in damages for past infringement.

RIM countered by arguing a shutdown would be against the public
interest but it also pledged outside of court to keep BlackBerry
service going.

"I will tell customers that, no matter what, the BlackBerry service
will keep on running," RIM co-chief executive James Balsillie told
reporters. The technical workaround would take 15 to 30 minutes per
BlackBerry user to implement.

A lawyer for the U.S. Justice Department asked Spencer to exempt all
government employees and contractors from any shutdown and sought a
90-day grace period for all users.

Some users are so reliant on the gadgets that they have dubbed them

Among the alternatives to the BlackBerry is the Treo 650 smartphone
made by computer and smartphone maker Palm Inc..

Others who could cash in on a BlackBerry blackout are Nokia, Samsung
Electronics and Hewlett-Packard Co., which offer e-mail capable mobile

RIM has challenged the validity of the NTP patents in an
administrative proceeding at the U.S. Patent and Trademark Office but
the process is lengthy and NTP could appeal any final decision against
it at the patent office back to the courts.

The patent office this week issued final rejections of two of the five
NTP patents at issue in the case.

RIM's Balsillie told Reuters he was "thrilled beyond thrilled" at the
patent office action. RIM has been hoping that all the patents will be
invalidated before Spencer issues any injunction.

Copyright 2006 Reuters Limited.

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