BlackBerry users get a reprieve

Judge wants an accord, holds off shutdown order

February 25, 2006|By JAMES S. GRANELLI | JAMES S. GRANELLI,LOS ANGELES TIMES

Compulsive BlackBerry users rejoice - for now.

The addictive, mobile e-mail devices will continue to interrupt conversations and distract Type A's from their kids' soccer games while the federal judge deciding a patent dispute mulls whether to shut down the service.

But U.S. District Judge James R. Spencer reiterated his long-standing threat of a shutdown, saying during a hearing yesterday in Richmond, Va., that he was surprised and disappointed that BlackBerry maker Research In Motion Ltd. had not settled the case with Arlington, Va., technology company NTP Inc. NTP, which won a 2002 jury verdict finding that Ontario-based RIM had infringed on five patents, wants the judge to block U.S. sales and e-mail service of the device.

The judge might issue such an order as early as next week, but lawyers watching the case said it was clear that he was trying to force the two sides to negotiate.

"The judge desperately wants the two parties to settle this," said Bob Yoches, a patent lawyer in Washington "What he's essentially saying to each side is: How good a gambler are you?"

Although NTP has the legal advantage, it is under pressure to settle.

The U.S. Patent Office has issued preliminary or final rejections of all five of its patents. That includes a final rejection issued yesterday. NTP may appeal final rejections.

In addition, the U.S. Supreme Court is considering whether to bar automatic injunctions as a remedy in patent cases.

But Spencer isn't waiting for the high court to rule.

"RIM has dodged a bullet today," said Brian Ferguson, another Washington patent lawyer. "But it's very clear the bullet is coming their way."

Last year, a tentative $4.5 million agreement fell apart. NTP now wants $126 million for past damages and, reportedly, close to $1 billion to settle future claims.

Spencer could fashion an order that neither side likes, but the burden probably would fall much more on Research In Motion, which counts 3 million U.S. BlackBerry users among its 4.3 million customers worldwide and controls 50 percent of the market.

Industry analyst Eugene Signorini of the Yankee Group, a Boston research company, said that regardless of what happens, RIM is taking some hits in customer relations.

A plan to work around the patents by sending new software to customers is going to be difficult and time-consuming to achieve, and there probably will be glitches, Signorini said.

In addition, he said, chief competitor Palm Inc., with 30 percent of the market, is pushing harder for customers for its Treo handset, as are newcomers Nokia and Microsoft Corp.

If Spencer imposes an injunction, the effect probably would be delayed for 30 days to give RIM a chance to work around the patents and possibly appeal the decision.

It also gives customers a chance to decide what to do.

James S. Granelli writes for the Los Angeles Times.

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