As a U.S. federal judge deliberates on whether to order an injunction against BlackBerry wireless e-mail service and devices, he must weigh an ominous warning from Research In Motion Ltd.
A shutdown will produce a “never-ending” stream of disputes between the company and its nemesis NTP Inc. over which subscribers should be exempt, RIM has warned.
U.S. District Court Judge James Spencer has made clear his desire to get the five-year-old patent infringement suit off his docket as soon as possible. The threat of an injunction was to have pushed the parties to an agreement long ago.
But now that the appeals process has run its course, the judge faces a series of nightmarish scenarios as he prepares his ruling.
Both sides agree that a shutdown will mean the creation of a “white list” and a “black list” of users, because U.S. law exempts the government from an injunction. But they disagree as to how feasible it is for RIM to distinguish between accounts.
At least one-third of RIM's more than three million subscribers in the U.S. are government employees. Countless others are government contractors who will also be eligible for white-list status. That means a BlackBerry ban won't actually affect a substantial portion of RIM's U.S. business.
“So what are you really accomplishing by taking the other two-thirds out of the stream of communication?” Henry Bunsow, one of RIM's lawyers, argued before Judge Spencer at a hearing in Richmond, Va., last Friday. “What you're accomplishing is making those million hamstrung in their communications.”
Two lists of customers would require monitoring and would lead to “constant disputes between NTP, RIM, the service providers and the users as to who should be in, who should be out, when, why and how. It will be never-ending,” he warned.
Legally, an injunction looks cut and dried. U.S. law allows for one when a company such as RIM is found to have willfully infringed on another's technology. But logistically, preparing for a shutdown in the case is daunting.
John Fargo, a lawyer for the U.S. Department of Justice, which has status as an interested party in the case, said the government would want to make key contractors exempt right off the bat, naming IBM Corp. and Bechtel Group Inc. as two examples.
But trying to figure out which accounts in major corporations should be given white-list status and then monitoring the setup would be problematic, he said.
The Justice Department has told NTP that it also wants non-governmental organizations added to the white list, including the regional federal reserve banks that use BlackBerrys to communicate with the Federal Reserve. “That's important for monetary supply, particularly in a time of crisis,” Mr. Fargo said Friday.
Even if a comprehensive white list is established, the government has concerns about whether the phone companies will still operate the BlackBerry service. “One real fear we have is, if we have done this, we do not want the carriers to shut off our service,” Mr. Fargo said. “The carriers want to make sure they are not held in contempt of an injunction.”
If responsibility for shutting off service is not placed at RIM's end, the phone companies may not want the burden of trying to sort through who is a legitimate user and who is not, he said.
RIM, based in Waterloo, Ont., contends it cannot easily distinguish which are government accounts. NTP responds that the complexity of a shutdown is mostly of RIM's own doing.
The Virginia-based patent holding firm insists RIM has known about the risk of injunction since losing the jury trial in 2003, yet has done nothing to prepare its system. “We submit that RIM has been using this entire implementation issue as a red herring, strictly for purposes of delay,” James Wallace, a lawyer for NTP, argued Friday. “RIM already has basically all the information it needs to protect the United States Government.”
