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U.S. judge says stay unlikely in RIM patent case

By Peter Kaplan
Wednesday, November 9, 2005; 5:19 PM

RICHMOND, Virginia (Reuters) - Research in Motion Ltd. <RIM.TO> <RIMM.O>, maker of the BlackBerry handheld e-mail device, suffered a setback in a potentially damaging patent infringement suit when a judge said on Wednesday he was unlikely to await a U.S. patent office review.

U.S. District Judge James Spencer told a hearing he would consider whether a disputed $450 million settlement with patent holding company NTP Inc. was enforceable before deciding whether to go forward with an injunction that could halt U.S. sales of the BlackBerry.

The U.S. Patent and Trademark Office earlier this year completed a re-examination of eight NTP patents and issued initial rulings rejecting all of the claims -- but it could take years for a final conclusion.

"Frankly, it's highly unlikely that I'm going to stay these proceedings ... I don't run (patent office) business and they don't run mine," Spencer said.

Shares of Waterloo, Ontario-based RIM closed down $2.64, or 4.1 percent, to $61.22 on the Nasdaq market. In Toronto, the stock closed off C$3.28 to C$72.31 a share.

RIM said in a statement it was "pleased" the validity of the settlement would be examined before an injunction is considered.


American Technology Research analyst Rob Sanderson said RIM risked imposition of an injunction before the patent office completes its work.

"It takes one of the positive scenarios away from RIM, taking the judge's comments at face value, which I think we should," said Sanderson.

If there is no settlement and an injunction is imposed, RIM could implement a "workaround" solution using different technology that it says does not infringe on NTP's patents, Sanderson said.

RIM disclosed plans for the workaround in June. Co-Chief Executive Jim Balsillie recently reiterated to Reuters it has this option and is "committed to supporting our market."

NTP filed its suit against RIM in 2001 in U.S. District Court for the Eastern District of Virginia. A jury found in favor of NTP in 2002.

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