Court Ruling Could Lead to Halting of BlackBerry Service

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The New York Sun

Research In Motion lost a U.S. Supreme Court bid to block proceedings that might result in a nationwide shutdown of its BlackBerry e-mail service. The company’s shares fell as much as 7.5% before trading was halted.


Chief Justice Roberts rejected the Canadian company’s request to halt trial court proceedings while it pursues high court review of a patent-infringement finding.


Research In Motion, based in Waterloo, Canada, now has the option of filing the same request for a stay with a second justice. Without a stay, the case goes back to a trial judge in Richmond, Va., who will consider ordering a halt to BlackBerry sales and service in the U.S. for individuals and companies.


In a court filing yesterday, patent owner NTP suggested it may be months before the trial judge in the case decides whether to issue an injunction halting BlackBerry sales and service. NTP said the Supreme Court probably will decide before then on whether it will hear the underlying appeal in yesterday’s case. Judge Roberts’s action yesterday was limited to a request for a stay.


“If RIM acts in a timely, responsible manner” in filing the high court appeal petition, the justices can address the issue in its current term, which runs through June, NTP said in court papers.


NTP also said it has made repeated settlement offers to address RIM’s business needs, but RIM failed to respond to many of the offers.


“RIM’s purported parade of horribles resulting from a possible future injunction is also well within RIM’s ability to control,” NTP said in court papers.


Closely held NTP, a patent-licensing firm based in Arlington, Va., sued Research In Motion in November 2001. A year later, a federal jury in Richmond found that Research In Motion used NTP’s e-mail technology without permission. The U.S. Court of Appeals for the Federal Circuit upheld part of that finding.


In its request to the Supreme Court for a stay, Research In Motion said the “continued threat” of the suit has depressed the company’s stock price and caused uncertainty among its American users.


“The threat alone of this injunction causes significant harm,” Research In Motion argued in court papers.


NTP says it plans to ask U.S. District Judge James Spencer, who presided over the 2002 trial, to reinstate an order that would halt BlackBerry service for non-government users.


Research In Motion has said it will ask the judge to force NTP to abide by a proposed $450 million settlement that fell apart in June, which could end the legal case. The judge also has to deal with some infringement issues as ordered by the appeals court.


Even as the courts deal with the lawsuit, Research In Motion is asking the U.S. Patent and Trademark Office to cancel the NTP patents. In an initial finding, the patent office rejected all of the NTP patents although NTP has a chance to respond.


Research In Motion’s shares fell $3.66, or 6.4%, to $53.74 at 1:21 p.m. and traded as low as $53.11 on the Nasdaq Stock Market before they were halted. They’ve lost a third of their value so far this year. Shares of Palm, which sells the competing Treo device, rose 70 cents, or 2.6%, to $27.58 on the Nasdaq exchange.


The cases are NTP Inc. v. Research In Motion Ltd., 03-1615, U.S. Court of Appeals for the Federal Circuit (Washington), and NTP Inc. v. Research In Motion, 01cv767, U.S. District Court, Eastern District of Virginia (Richmond).


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