Last week, Waterloo, Ont.-based Research in Motion was denied two motions by a U.S. District Court judge to enforce a settlement agreement with NTP Inc. and to stop court proceedings while the Patent and Trademark office re-examines NTP's patents.
This could open the door to a possible injunction that would stop sales of the wildly popular BlackBerry mobile e-mail devices and shut down BlackBerry service in the U.S. Meanwhile, RIM is seeking an appeal to the U.S. Supreme Court and expects the court to decide in the upcoming months whether to hear that appeal and review its four-year dispute with NTP.
Also last week, a five-day hearing began in the U.K., where a London court is considering a dispute between RIM and Inpro Licensing SARL. RIM is asking the High Court to rule that a patent held by Inpro is invalid. While Inpro says the patent relates to RIM technology used in the BlackBerry, RIM says the patent is merely for a simple idea that is either "anticipated or obvious."
Apart from the NTP case, RIM has been embroiled in several lawsuits over the last few years, a situation that some U.S. commentators have said is not unexpected, given its spectacular success.
In September, RIM was sued by Eatoni Ergonomics Inc., a small tech company, over what it claimed was an infringement of Eatoni's patented keyboard technology. The company has asked RIM to buy it for $2.4 million.
In the wake of its dispute with NTP, RIM has also gone on the offensive, suing companies such as Good Technology Inc. and Palm, Inc., eventually settling with them.
Currently, it is playing a waiting game in the massive NTP suit, which may be the largest-ever patent infringement suit.
NTP, the small company formed to hold the patents of now deceased inventor Thomas Campana, Jr., sued RIM in 2001 in a Virginia court over patent infringement related to the BlackBerry device.
RIM lost and in May 2003 was ordered to pay more than US$200 million in damages and a royalty of 8.55 per cent on future U.S. sales. An injunction was stayed pending an appeal.
In December 2004, the U.S. Court of Appeals for the Federal Circuit ruled against RIM but said part of the trial ruling was flawed and sent the case back to the Virginia court for reconsideration.
Last June, a proposed $450-million settlement fell apart. In August, the appeal court revised its decision but again sent the case back for review.
In September, the U.S. patent office issued an initial ruling rejecting the final eight of NTP's patents, in addition to seven others it had already rejected.
Currently, RIM is waiting to hear whether the U.S. Supreme Court will review the issue of when injunctions should be used in patent infringement cases of this kind. However, the top court recently agreed to rule on the same issue in the case of eBay Inc., which is involved in a suit with a small company that also won a patent ruling. A decision in eBay's favour would likely be of assistance to RIM.
The injunction issue will have widespread consequences. RIM sells 70 per cent of its BlackBerrys in the U.S., with its number of subscribers continuing on a strong upward curve. So addicted have users become that terms like "crackberry" are becoming common and the sight of employees bent over their BlackBerrys in meetings is now known as the "executive prayer."
It even made the news a few months ago when U.S. rap star Diddy announced he would be putting away his BlackBerry for two weeks while he performed in a play.
So integral has the BlackBerry become to the work world that last month the U.S. government intervened in the NTP case when it became apparent that the injunction granted against RIM in 2003, but stayed pending an appeal, might be enforced. The U.S. government asked for at least 90 days' notice of any injunction. The government wants to know well in advance if RIM will be prevented from providing "services that would be essential for the federal government."
The government filing also said that extra time was necessary to allow the U.S. patent office to complete its final consideration of the validity of the NTP patents.
Alan Gahtan, a Toronto IP lawyer with no connection to the RIM case, noted that in his view there are very few situations of this kind where an injunction is justified.
"It would not be hard to determine what the damages are, as RIM is a public company. Why would this company [NTP] not be satisfied by receiving damages after the fact? Using injunctions in this kind of case is really just giving a super weapon to the plaintiff to extort money from a defendant, even if they are infringing."
It does not seem like an appropriate remedy in a situation where it cannot be shown there is irreparable harm, he added.
He also noted that the RIM case is intriguing because of the cross-border issues. Even though it appears that not all of the processes required to fulfill the patent are taking place in the U.S. (much of the BlackBerry service is run out of Canada), it is being counted as infringement within the U.S.
"What they have done is basically given extra-territorial effect to U.S. patent law. . . to me that is disappointing, because it means a company doesn't even have to go and get a patent in Canada."