The RIM Blackberry v. NTP Lawsuit Explained: You’re Not Likely to Lose Blackberry Service   12/2/2005 - 1,470 views, 2 Comments

Research in Motion (RIM), a Canadian company, is best known for their ubiquitous device the Blackberry, which can be seen on the hip of every overconnected executive in the United States (except me - as many of you know, after going through three of them I switched to the Sidekick, with which I’m extremely happy).

Well, it turns out that a small U.S. company, NTP, holds the patent on exactly the sort of process and software which RIM uses to deliver to the Blackberry, and three or so years ago NTP sued RIM in Federal court. RIM suffered a stunning series of blows as a jury held that RIM had indeed infringed on the NTP patent, and that something had to be done about it. RIM faced having its entire U.S. operation - its primary raison d’etre - shut down.

Of course, we all know what these lawsuits are almost always really about: money. RIM realized that too, and worked with NTP to craft a settlement which would shunt to NTP an amount of money along the lines of $450milliion.

However, that settlement agreement was never fully executed, and so NTP took RIM back to court, demanding an injunction to stop RIM from providing the service at all to their entire U.S. customer base. RIM attempted to point to the prior settlement agreement, and the court ruled it invalid.

RIM also asked the court to halt legal proceedings until the U.S. patent office could determine whether NTP’s patents were valid. This week, noting the already considerable delay in these legal proceedings, and that the patent office could take as many as ten years to get around to reviewing the patents, U.S. Federal Judge James Spencer denied all of RIM’s requests, saying that “This court cannot and will not grant RIM the extraordinary remedy of delaying these proceedings any further than they already have been based on conjecture.”

RIM claims to have alternate software which it can deploy in the event of a permanent injunction against them, so that customers will still be able to use their Blackberries, but even if that software actually works, it’s clearly a last resort.

So it’s back to the bargaining table for RIM and NTP, with RIM up against the wall, and NTP in the driver’s seat. Insiders indicate that the new settlement figures being bandied about are up in the $1billion range. (It is believed that RIM has cash assets of about $1.2billion.)

Me? I’m so happy with my Sidekick!