RIM suffers new legal setback

Posted on 24 Oct 2005 at 10:21

Research In Motion is steeling itself for an injunction that would prevent the company from marketing its best selling range of BlackBerry devices following a decision by the US Court of Appeals for the Federal Circuit. The Court has turned down a request by RIM for a stay on further proceedings until the US Supreme Court hears its long running patent infringement lawsuit with NTP.

RIM now says it will go to the Supreme Court itself to ask for the stay on further proceedings. However, it is very rare for the Court to do so.

The case itself has now been referred back to the U.S. District Court for the Eastern District of Virginia where NTP is expected to ask the judge to enforce the original ruling that banned the marketing of BlackBerrys in the US. In response, Research in Motion will ask the court to force NTP to abide by its part of a deal in March that settled the case for $450 million. That agreement fell apart after a dispute over the scope of the licensing agreement.

RIM says it while it feels that an injunction favouring NTP is 'inappropriate' it says that ultimately it will be up to the courts to decide these matters and there can never be an assurance of a favourable outcome in any litigation.

The case goes back to 2002 when a small company NTP, which claims that it held key patents regarding the transmission of email wirelessly, sued RIM. The jury decided that RIM had infringed the NTP patents and ordered the company to pay $23 million. Following further hearings and interest payments this later increased to almost $54 million. The judge also ordered RIM to pay a royalty of 8.55 per cent on BlackBerry sales in the US.

Following the announcement RIM shares fell $2.32, or 5.4 per cent of their value, to $62.34 on the NASDAQ share index.

Author: Steve Malone