Supreme Court Declines RIM Job in Blackberry’s Research in Motion v NTP Case   1/24/2006 - 1,688 views,

The Supreme Court this week declined to consider whether a Federal court ruling finding that Research in Motion (RIM), makers of the Blackberry PDA, had violated a patent held by NTP, should be overruled on the basis that because RIM is based primarily in Canada, U.S. patent law shouldn’t apply. In otherwords, a Federal court has held that Research in Motion did infringe NTP’s patent, and RIM asked the Supreme Court to say “it doesn’t matter, U.S. patent law doesn’t apply because Research in Motion is headquartered in Canada.”

According to NTP, the Supreme Court’s action “closed the final path for RIM to avoid liability for the infringement.”

Now, of course, it’s well known in legal circles that when the Supreme Court declines a case, it has nothing to do with the merits of the case, and means only “we choose not to review this.” The Supremes get thousands of petitions to review cases every year, and only hand-pick a select few which raise issues which they consider pressing and ripe for review.

However, it’s also true that Research in Motion’s chances for pulling this out of the fire are beginning to look slim. Their last great hope is that an expedited review of all of NTP’s patents by the U.S. PTO will end up in the patents in question being invalidated. If I were a RIM investor, I wouldn’t pin my hopes on that.

NTP is asking for an injunction which would require RIM to stop selling and servicing Blackberry devices in the United States. Sales and service in the U.S. account for nearly 70% of all of RIM’s revenue, and such an injunction would be devastating to Research in Motion.

When the issue of the injunction request comes up before the court, Research in Motion plans to argue that it can pay NTP appropriate compensation for the infringement, and so an injunction is not necessary.

In otherwords, we didn’t do it, but we have enough money from doing it to pay NTP off.

Nice.

Even RIM seems to know that this is an argument which may not hold much water, or weight. “RIM believes these factors should hold significant weight in any decisions relating to an injunction. However, it will ultimately be up to the courts to decide these matters, and there can never be an assurance of a favorable outcome in any litigation,” said a Research in Motion spokesperson.

Sounds like a company prepping its investors to me.