Research In Motion Ltd.'s race against time with a patent-holding company in Virginia has come down to the wire.
U.S. patent authorities issued a final rejection of one of NTP Inc.'s patents yesterday, just before a judge will consider shutting down RIM's BlackBerry service in the United States for infringing on NTP's technology.
RIM has argued unsuccessfully in court that none of the claims in NTP's five contested patents is valid. A separate review of the technology by the Patent and Trademark Office (PTO), however, has ruled in RIM's favour every step of the way.
The remaining patents have already been rejected twice on preliminary review by the patent office, and RIM said yesterday it expects a final ruling shortly.
Tomorrow, however, a federal judge will hold a hearing with the parties in Richmond, Va., to consider damages and whether to impose an injunction on BlackBerry wireless products and services in the United States, RIM's largest market. And District Court Judge James Spencer has said he will not delay his proceedings while the PTO completes its review.
Patent office re-examinations are uncommon, and the review of NTP's patents became even more unusual last year when the PTO fast-tracked the process after Judge Spencer complained about the seemingly slow pace.
It's not clear yet whether the rejection of NTP's patent claims will affect what Judge Spencer does in court tomorrow. RIM says if it faces an injunction, it will roll out new software that works around NTP's patents. More than three million of the world's five million BlackBerry subscribers are in the United States.
The PTO is reviewing whether prior inventions, not considered during a jury trial in 2002, mean that NTP's patents don't cover anything new.
“The rejections from the patent office were all based on multiple grounds, required the unanimous agreement of three senior patent examiners and are expected to withstand all future appeals by NTP,” RIM said in a news release yesterday.
On the Toronto Stock Exchange yesterday RIM shares closed down $1.10 or 1.29 per cent at $84.
NTP lawyers have said they only need a single claim in one of the disputed patents to withstand review in order to win against RIM. Yesterday the firm's co-founder did not concede any ground.
“The process of re-examination is not nearly over,” said Donald Stout, who is also a patent lawyer. “If final rejections are issued, NTP will appeal.”
In a news release, NTP said, “RIM's public assertions that NTP's patents have been invalidated are flatly wrong and intentionally misleading. In fact, the PTO itself has previously taken the position that a patent owner ‘is not hindered from full enjoyment of his patents during re-examination.' ”
The firm can appeal to a board within the PTO and then, if necessary, to a federal appeals court. Ultimately, it can even try to take its arguments to the U.S. Supreme Court.
A jury in Judge Spencer's court found in 2002 that RIM had infringed 11 claims of five patents and said the Waterloo, Ont., company should pay NTP a royalty rate of 5.7 per cent of U.S. sales.
