Research In Motion Ltd. will continue to face the possibility of an injunction on its BlackBerry communications devices in the United States while it tries to get the top court there to weigh in on a bitter and lengthy patent infringement suit.
A U.S. appeals court yesterday denied a request by RIM to stay proceedings while the company tries to get the Supreme Court to review the case.
The decision by the U.S. Court of Appeals for the Federal Circuit in Washington sends the patent fight back to the district court level, where NTP Inc., the plaintiff, will ask for an injunction. An earlier one awarded in August, 2003, was stayed pending appeal and later vacated.
Trading in shares of RIM was briefly halted yesterday until the Waterloo, Ont., company prepared a response to the latest ruling.
RIM said it expects that Virginia-based NTP will imminently file a new motion for an injunction prohibiting RIM from providing BlackBerry service and from “using, selling, manufacturing or importing its handhelds and software” into the U.S., a market responsible for about 70 per cent of sales.
“While RIM maintains that an injunction is inappropriate given the facts of the case and substantial doubts raised subsequent to trial as to the validity of the patents in question, it ultimately will be up to the courts to decide these matters and there can never be an assurance of a favourable outcome in any litigation,” RIM said in a news release.
RIM shares declined $1.75 to $74 on the Toronto Stock Exchange yesterday and fell $2.32 (U.S.) to $62.34 on the Nasdaq Stock Market.
In November, 2002, a jury ruled that RIM infringed on NTP patents and ordered the company to pay $23.1-million. Judge James Spencer of the U.S. District Court for the Eastern District of Virginia later increased the damages to $53.7-million and ordered RIM to pay a royalty of 8.55 per cent on BlackBerry sales in the U.S.
RIM is hoping that the same judge will take into account several developments that have occurred since he awarded the first injunction. This summer, the appeals court reversed or vacated the infringement finding on nine of the 16 litigated patent claims. It also vacated the damages award and injunction originally entered by Judge Spencer and sent the case back to the district court for further review.
In addition, the two companies announced a settlement in March in which RIM said it would pay NTP $450-million to end the legal battle. The deal fell apart a short time later, and RIM has said it will now try to get Judge Spencer to enforce the settlement agreement.
RIM is also hoping that a re-examination by the U.S. Patent and Trademark Office of the disputed patents will influence the court's thinking. The PTO has issued initial rulings rejecting all claims of the patents. The patent review process, however, is expected to carry on much longer than the legal proceedings.
Legal experts don't expect the Supreme Court to hear the case because it already has a couple of intellectual property cases before it.
But RIM claims that the case raises “significant national and international issues.” It argues 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. Both the district court and appeals court, however, have rejected this argument.
