US Supreme Court declines to hear BlackBerry appeal

Washington (DC) - An appeal by Research in Motion, Ltd., the Canadian firm responsible for BlackBerry products and services, to the US Supreme Court, will not be heard, the high court declared this morning.

RIM is contesting a US District Court injunction handed down in December 2004, which stated that the Ontario-based manufacturer infringed against 11 wireless e-mail patents held by a Virginia-based patent holding company, NTP Inc. In October, the US Circuit Court of Appeals refused to hear RIM’s appeal that enforcement of US patent law through injunction should not apply to a business whose technology is headquartered outside US boundaries. Legal experts gave RIM’s subsequent plea to the Supreme Court little chance, in the wake of the Appeals Court refusal.

Although the injunction stands, District Judge James Spencer had stayed his own ruling, pending appeal and/or confirmation by a higher court, neither of which is now likely to happen. Should the judge lift his stay, and the injunction go into effect, RIM will be prevented from continuing to do business in the United States, at least using a technology that apparently infringes upon NTP’s patents. Recently, the US Patent and Trademark Office has taken the unusual step of issuing a series of non-binding, preliminary rulings declaring that it is likely to find at least most of NTP’s patent invalid. In mid-December, the Patent Office stated that at least one of the patents under contention most likely conflicts with a global patent filed in the 1980s by Norwegian telecommunications firm Telenor. The validity of at least three of the others, says the USPTO, appears suspicious.

However, it could still take months before the USPTO investigation could resolve whether NTP’s claims are absolutely legitimate. The District Court has yet to announce a schedule for further proceedings on this case, and the fate of BlackBerry service in the US may rest on that court’s willingness to procrastinate.

In a statement released this morning, apparently having anticipated what everyone else also knew was coming, RIM said it would argue before the District Court that an appropriate royalty payment to NTP would be a more appropriate remedy to disabling service to at least 80% of RIM’s worldwide customer base. Such a move would have a negative impact among parties both public and private, RIM said, which should be exempt from these matters. The company is obviously alluding to recent statements by spokespersons for cabinet-level departments, including Justice and Defense, gently reminding us of how much staff members and executives in those departments have come to rely upon their BlackBerrys.

One possible route out of this mess for RIM may be to implement a kind of technology "upgrade" to its BlackBerry service - in effect, re-inventing its secure e-mail service so as to avoid even the appearance of patent infringement. "As a contingency," its statement this morning reads, "RIM has also been preparing software workaround designs which it intends to implement if necessary to maintain the operation of BlackBerry services in the United States." The time for this "fourth-and-long" move may be imminent.