RIM Dodges Shutdown Bullet
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UPDATED: Research in Motion's (RIM) is breathing a sigh of relief following a court ruling that its BlackBerry services will not be plucked from the airwaves. At least not yet.
U.S. District Judge James Spencer today decided not to issue an injunction and shut down the popular messaging service. Rather, he will continue to review the case.
"I think our arguments and filings give the court a lot to consider," said RIM CEO Jim Balsillie in a statement emailed to internetnews.com. "The Judge was able to hear today how an injunction would severely damage the public interest and thats a very important consideration in deciding upon any injunction."
Judge Spencer said he would arrive at a decision "as soon as reasonably possible," according to a report from Reuters. He added, however, that RIM has been found guilty of infringing on NTP's patents in earlier cases and an injunction is still possible if a settlement is not reached, according to the news agency.
In its presentation today, NTP asked the judge to issue an injunction and award the small patent-holding company $126 million in damages. This is in addition to the hundreds of millions NTP is seeking in past and possibly future royalties, according to a report in the Associated Press.
But today's ruling is good news for RIM since it avoids pulling the plug on the BlackBerry service nationwide, which is what NTP was calling for in its injunction request originally filed in 2003.
"I think it's very good for RIM and shows a real hesitance on the part of Judge Spencer to make a decision before the USPTO has reached a final decision on the remaining patents," Carmi Levy, an analyst with the Info-Tech Research Group, told internetnews.com.
The USPTO earlier this month issued an Action Closing Prosecution rejecting all of NTP's patent claims against RIM.
The agency is now reviewing each of the five remaining claims individually and ruling on each one. The first of these claims was rejected on Wednesday as part of a Final Office Action, while a second rejection came during this morning's hearing.
"As time goes on, NTP's grip on this technology gets weaker and weaker," Levy said. "This is important since patents are based on ownership and if patents are rejected then there really is no court case."
Levy also maintains that NTP's "Hail Mary pass" of asking for a multi-million-dollar damage award today may signal NTP's "increasing desperation," especially as they continue to lose ground on the patent front.
Still, other's think RIM would be smart to push for a settlement.
"Although the PTO issued another "final" decision against one of NTP's patent claims and RIM appears to have the stronger legal argument as to why an injunction should not be imposed, the judge's comments suggest there is a real, continuing threat of an injunction," said Blair Levin, an analyst with Stifel Nicolaus.
"We recognize the news was mixed, but we believe this puts particular pressure on RIM to settle the case, rather than continue to litigate," Levin added in comments emailed to internetnews.com.
Lawyers on both sides have been busy in the days leading up to today's hearing.
The USPTO on Wednesday denied a petition from NTP to withdraw its previous Action Closing Prosecution issued on Feb. 1 on the grounds that the USPTO based its decision on new information that NTP did not have a chance to officially respond to through affidavits or other declarations, according to a denial and decision response released yesterday by the USPTO.
This new information reportedly includes eight pages of documents obtained from the USPTO under the Freedom of Information Act.
NTP further claims the USPTO's decision is based on "unsupported hearsay evidence," said the USPTO in its response.
RIM disputes the relevancy of these new documents, which it claims amount to eight pages out of 225 sent to NTP by the USPTO.
"Although NTP could have obtained these documents from the USPTO long ago, it chose to defer its efforts to put them before the court until the last moment," said RIM in a statement sent on Thursday to Judge Spencer.
In its response, RIM included copies of letters sent to the USPTO in 2002 from the CTIA and four major computer companies, all of them asking for a re-examination of the NTP patents in light of its patent-infringement claims.
The companies include Sprint, Nextel, Qualcomm and Microsoft and are among 47 that received cease and desist letters from NTP, according to a letter from Microsoft dated Oct. 16, 2002, and signed by its corporate attorney.
These letters, said RIM in its statement, were the start for the entire patent reexamination process, although they were not included in NTP's recent petition to the USPTO.
Also on Thursday, a pro-RIM brief was filed with Judge Spencer and the U.S. District Court by Ascension Health, a large non-profit health care group consisting of 63 hospitals and facilities in the U.S.
In the brief, hospital administrators claim a Blackberry service shutdown would "severely, and detrimentally, impact emergency medical service" and prevent medical personnel at Ascension and other hospitals from providing "timely real-time responses to health emergencies."
A similar brief was also filed yesterday by Science Applications International Corp. (SAIC), a large systems integrator that serves federal, state and local government agencies.
SAIC claims in its filing that the BlackBerry messaging technology is critical to its communications with customers and that a service shutdown would impact its ability to support "the government in its thousands of contracts involving defense, national and homeland security, law enforcement, information services and technology."