Updated: 11:51 a.m. ET Jan. 23, 2006
WASHINGTON - The Supreme Court on Monday refused to hear an appeal from the maker of the BlackBerry in the long-running battle over patents for the wildly popular, handheld wireless e-mail device.
The high court’s refusal to hear Canada-based Research In Motion Ltd.’s appeal means that a trial judge in Richmond, Va., could impose an injunction against the company and block BlackBerry use among many of its owners in the United States.
The justices had been asked to decide on whether U.S. patent law is technologically out of date in the age of the Internet and the global marketplace.
At issue was how U.S. law applies to technology that is used in a foreign country and allegedly infringes on the intellectual property rights of a patent-holder in the United States.
The justices were asked to decide whether Research In Motion can be held liable for patent infringement when its main relay station for e-mail and data transmission is located in Waterloo, Ontario, outside U.S. borders.
RIM was challenging a ruling by a federal appeals court that found that the company had infringed on the patents held by NTP Inc., a tiny northern Virginia patent-holding firm, because its customers use the BlackBerry inside U.S. borders. The panel said it did not matter where the relay station is located.
Attorney Kevin Anderson, who represents NTP, said the firm is pleased with the court’s action. “We think the Supreme Court’s rejection of RIM’s position makes it clear that RIM should stop defying the U.S. legal system,” he said.
RIM sought to play down the significance of the court’s rejction. “RIM has consistently acknowledged that Supreme Court review is granted in only a small percentage of cases and we were not banking on Supreme Court review,” said Mark Guibert, RIM’s vice president for corporate marketing. “RIM’s legal arguments for the District Court remain strong and our software workaround designs remain a solid contingency.”
Governments, big business concerned
Since its introduction in 1999, the BlackBerry has revolutionized the business world, allowing people to stay in constant e-mail contact with their offices and customers while they are away from their desktop computers.
The BlackBerry almost instantaneously transmits data through radio frequency technology that Thomas Campana Jr., an engineer, says he developed in 1990, long before the Internet became an integral part of American life.
The dispute not only has resonated with BlackBerry users who worry that their lifeline to their offices could be severed. The U.S. and Canadian governments also are concerned, as is Intel Corp., the world’s largest semiconductor manufacturer.
U.S. officials worry about the loss of BlackBerry use for law enforcement and health workers in a crisis, while the Canadian government is concerned that research and development in other industries will be stifled if RIM loses on all fronts.
In a filing with the Supreme Court, Intel’s lawyers said the company is torn. As an investor of billions of dollars into research and development, the company is among the nation’s leaders in obtaining patents and wants to protect itself against infringement.
At the same time, Intel also is frequently accused of infringement and wants clearer rules that protect it from small patent-holding companies that have little infrastructure and produce no products.
Attorney Herbert L. Fenster, who represents RIM, said the company is fighting the injunction. But he said an injunction would not end BlackBerry use among at least 1 million of its 3 million users in the United States.
Fenster said he believes federal law prohibits U.S. District Judge James R. Spencer from cutting off BlackBerry service to federal, state and local government users and others who rely on the devices to communicate during a public emergency.
Spencer has set a Feb. 1 deadline for filings on the injunction issue.
The legal fight began in 2001, when NTP sued RIM for infringement. The next year, a jury in Richmond decided that RIM had infringed on patents held by NTP, awarding the company 5.7 percent of U.S. BlackBerry sales. Spencer later increased that rate to 8.55 percent. At last count, the tally of damages and fees had exceeded $200 million and it continues to grow.
In a court filing last week, NTP said it was willing to resolve the matter if RIM were to pay it the original 5.7 percent royalty fee, Anderson said.
Last year, attempts to resolve the case fell apart when Spencer disapproved a settlement in which RIM would have paid $450 million to NTP.
The case is RIM v. NTP, 05-763.
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