RIM and NTP Lawsuit

[Barry]

RIM announced that due to an impasse in the process of finalizing a definitive licensing and settlement agreement with NTP, RIM is taking court action to enforce the binding Term Sheet agreed upon and jointly announced by RIM and NTP on March 16, 2005. In order to enforce the Term Sheet, RIM filed a motion to stay the pending appeal in the United States Court of Appeals for the Federal Circuit (CAFC) and to remand the case to the United States District Court for the Eastern District of Virginia (District Court) to enforce the settlement terms.

On December 14, 2004, the CAFC issued a decision that would affirm-in-part and vacate-in-part the decision of the District Court relating to the litigation between the parties and remand the case to the District Court for further proceedings. On January 11, 2005, RIM filed a petition with the CAFC for a rehearing on several significant issues within the CAFC’s decision. On March 16, 2005, while RIM’s petition for a rehearing was still pending before the CAFC, RIM and NTP jointly announced that they had signed a binding Term Sheet resolving the litigation between them. As part of the settlement, RIM agreed to pay US$450 million in exchange for NTP granting RIM and its customers an unfettered right to continue its BlackBerry-related wireless business without further interference from NTP or its patents. The parties agreed to negotiate in good faith to finalize the terms of a definitive license and settlement agreement. Since signing and jointly announcing the binding Term Sheet with NTP, RIM has been negotiating in good faith to complete that process. However, NTP refuses to honor its obligations under the Term Sheet and finalize the definitive documents. As a result, an impasse has been reached with respect to the settlement.

In order to enforce the Term Sheet, RIM has filed a Motion to Stay Appeal and Remand for Enforcement of Settlement Agreement, which requests that the CAFC stay the appeal and remand to the District Court to enforce the Term Sheet. The CAFC may grant RIM's motion, stop its review of the patent dispute and send the enforcement of the Term Sheet to the District Court to resolve. The CAFC may also deny RIM's motion, continue its review of the case, and ultimately send both the enforcement of the Term Sheet and the patent dispute to the district court. RIM expects that NTP will oppose RIM’s motion; and, if the CAFC sends the patent dispute back to the District Court, RIM also expects that NTP will ask the District Court to reinstitute the injunction that had previously been granted (which was subsequently stayed pending RIM's appeal and then vacated by the CAFC in December 2004 in connection with the CAFC's decision to remand the case to the District Court for further proceedings) to prohibit RIM from providing BlackBerry service and from using, selling, manufacturing or importing its handhelds and software in the United States. While RIM maintains that an injunction is inappropriate given the facts of the case and recent doubts raised as to the validity of the patents in question, it will ultimately be up to the court to decide these matters and there can be no assurance of a favorable outcome of any litigation.

RIM is reviewing any potential accounting implications of this new development and will provide a further update when RIM reports first quarter fiscal 2006 results on June 29, 2005. RIM has already set aside the necessary funds to make the required payment stipulated in the settlement and continues to hold this cash in anticipation of resolution of this matter.

_________________
Start Posting for Cool Prizes!

[Mod]

The legal battle between RIM and patent-holding company NTP Inc. has coaxed some unexpected players out of the woodwork. RIM rivals Microsoft Corp. and Seven Networks Inc., along with chipmaker Intel Corp., recently filed documents in the case. The filings argue various legal minutiae, but also highlight the growing legal importance of the case.

The filings from Intel, Microsoft and Seven each hinge on a key ruling in the NTP vs. RIM case. The courts have ruled that RIM's BlackBerry offering infringes on NTP's patents even though BlackBerry e-mails are managed from an operations center in Canada. The ruling brings into question whether U.S. patents hold sway in other countries.

Seven sides with RIM, arguing that U.S. patents should not apply in other countries. Seven's argument is especially notable because the company competes against RIM in the wireless e-mail space. Intel too backs RIM's position, arguing that U.S. patents should not extend outside the country's borders.

Microsoft, which competes directly against RIM in the wireless e-mail arena, argues the opposite. Microsoft said RIM's position would encourage companies to "locate certain aspects of their systems outside the United States, primarily to avoid infringement liability. Such an outcome would likely result in loss of jobs, skilled workers, capital and information technology abroad."

The NTP vs. RIM case has raised a notable amount of interest, both in the wireless industry as well as the legal profession. The outcome of the case could have serious implications for wireless e-mail vendors as well as patent law in general. RIM is currently appealing a 2002 jury ruling in favor of NTP. NTP alleges RIM's BlackBerry offering infringes on its patents for wireless e-mail.

_________________
Join the forum & win a free iMate Jaq!

[Barry]

The saga continues. RIM said the U.S. Court of Appeals for the Federal Circuit has denied their motion to stay or suspend the patent case between the two companies pending a Supreme Court review, according to a Reuters report.

According to the Reuters report, NTP said the case now will move back to the District Court where it originally was heard for re-confirmation of the injunction on the sale of BlackBerry devices and service. The two companies had reached a $450 million settlement earlier this year, but the deal fell apart.

Trading on RIM's shares was halted following the news. The last trade of the company's shares at mid-day Friday was $61.12, down 5.47 percent.

_________________
Start Posting for Cool Prizes!

[Mod]

Could this possibly lead to the demise of the Blackberry in the States? We'll wait to see.....

_________________
Join the forum & win a free iMate Jaq!

[Barry]

A Virginian judge rejected Research In Motion Ltd.'s request to enforce a settlement with its adversary NTP Inc., a move that caused the Nasdaq to halt trading on RIM's stock. The ruling stands as yet another setback for RIM in its legal battle with NTP, and brings the company one step closer to a court-ordered injunction. RIM had asked the court to enforce a $450 million settlement it reached with NTP earlier this year. The companies announced the settlement in March, but it fell apart shortly thereafter. RIM then sent the issue to the court, asking it to enforce the settlement.

The court also rejected RIM's request to stop the case pending the U.S. Patent and TM Office's review of NTP's patents. Although the USPTO has rejected all of NTP's patents under review, the court said that likely won't affect the current case.

NTP said it would continue to call for an injunction on the sale of RIM's BlackBerry devices. The company however reiterated that the injunction would not affect BlackBerrys used by federal, state or local government entities or first responders. NTP said it wants the court to enforce a 2002 jury ruling that awarded NTP royalties on BlackBerrys sold in the United States. NTP said that under the ruling RIM owes $210 million in royalties.

_________________
Start Posting for Cool Prizes!