RIM Loses Motion on BlackBerry Lawsuit
Saturday, October 22, 2005
Research in Motion Ltd. yesterday lost its bid to halt proceedings in a patent lawsuit that threatens U.S. sales of its BlackBerry handheld e-mail device. The company's shares fell as much as 9.6 percent during the course of trading yesterday.
The U.S. Court of Appeals for the Federal Circuit yesterday rejected the company's request for a stay while it appeals the case to the U.S. Supreme Court. The appeals court previously upheld most of a patent-infringement finding in favor of Alexandria-based NTP Inc., which may lead to an injunction barring BlackBerry sales and service in the U.S.
"This is pretty bad" for Research in Motion, said Pablo Perez-Fernandez, a ThinkEquity Partners analyst in San Francisco who rates the shares "sell" and doesn't own them. "It reduces the options that RIM has and brings the injunction that much closer. This is a very serious problem for RIM."
Research in Motion, based in Waterloo, Ontario, asked the appeals court to stop proceedings in the case while the appeal is filed. The case returns to the trial judge in Richmond, where Research in Motion is expected to ask the court to force NTP to abide by an agreement reached in March to settle the case for $450 million. The settlement collapsed in a dispute over the scope of the licensing agreement.
NTP, a patent licensing firm, said it plans to ask the judge to reinstate the injunction, which was vacated by the appeals court because certain infringement issues also were remanded. Such an injunction would not affect BlackBerry usage by government agencies, NTP lawyer James Wallace said in a statement.
A telephone message for Research in Motion spokeswoman Courtney Flaherty at the public relations firm Brodeur Worldwide was not immediately returned.
Research in Motion shares fell $2.32, or 5.4 percent, to $62.34 on the Nasdaq Stock Market. The shares had traded as low as $58.48, a 9.6 percent drop from Thursday.