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Court Rules RIM Infringed

A federal appeals court ruled today that a district court properly determined that Research in Motion (RIM), the maker of the popular BlackBerry devices, infringed on the patents on NTP, but still sent the case back to the district court for further review of damages.

The case has enormous implications for the Canada-based RIM , which was ordered in August by a Virginia district court to pay $53 million in patent infringement damages to NTP. More importantly, the court also issued an injunction against RIM, prohibiting it from any further manufacture, use or sales of BlackBerry systems, software and handhelds in the United States.

The court stayed the injunction until RIM's appeal process played out. Tuesday morning, the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., said the lower court decision's on infringement was correct. But in a slim victory for RIM, the court ruled that the Virginia monetary judgment and injunction needs to be recalculated based on the "misconstruction" of one patent claim.

The Appeals Court found that the district court incorrectly based its judgment on the fact that the infringement involved three "originating processors" for NTP's patent on an "electronic mail system with RF communications to mobile processors." The Appeals Court said only one processor was involved in the infringement.

"Accordingly, the judgment and the injunction are vacated, and the case is remanded to the district court for further proceedings consistent with this opinion. We affirm the district court's judgment in all other respects," the Appeals Court ruled.

RIM officials were not available for comment.

If the Virginia court readjusts the settlement but keeps the injunction in place, RIM will be prohibited from selling its products in the United States unless it reaches a settlement with NTP. The company recently announced it had passed the 2 million mark in subscribers amid record sales and revenue.

NTP, a closely held Virginia patent holding company, originally sued RIM for patent infringement in 2002. RIM appealed that decision and in the June Virginia ruling, the jury found direct, induced and contributory infringement by RIM on all of NTP's claims. Based on a royalty rate of 5.7 percent, the jury awarded NTP approximately $23 million in damages.

The court added another $30 million in damages, attorney fees and interest.