BlackBerrys Will Keep Working Despite Suit, RIM Executive Says

By Yuki Noguchi
Washington Post Staff Writer
Tuesday, December 20, 2005

A top executive of Research in Motion Ltd., which makes BlackBerry e-mail devices, said yesterday that he is confident that the service will continue to work despite a high-profile patent dispute that threatens to shut down the company's U.S. operations.

The U.S. Patent and Trademark Office decided last week to expedite a review of patents held by NTP Inc., a small intellectual-property company in McLean that has successfully sued the BlackBerry maker for infringement. James L. Balsillie, chairman and co-chief executive of Canada's RIM, said the agency has signaled that it will reject all of the patents in question. If that happens, it undermines NTP's entire case, he said.

NTP co-founder Donald E. Stout denied that such a finding would undermine the case and promised to appeal any ruling against NTP at the patent office. The federal judge handling the case could issue the injunction anyway and has previously found that the patent claims were valid.

A spokeswoman for the agency declined to comment on its decision to expedite the review.

The two companies have been litigating the patent issue for four years, garnering national attention because of the popularity of BlackBerrys, especially among business executives.

"It's important to get the record straight," Balsillie said in an interview. Even if the underlying patents are upheld, he said, the company has a "software workaround" that would keep the service running for BlackBerry's 3.65 million U.S. customers. That workaround does not violate any patents, he added.

But RIM is up against a tight deadline. Juries and judges have repeatedly found that RIM has violated the patents it is asking regulators to reexamine, and last month Judge James R. Spencer at the U.S. District Court for the Eastern District of Virginia denied RIM's request to delay the injunction.

RIM and NTP declined to disclose whether the companies are discussing a settlement.

"This is definitely an unusual announcement from the patent office," said Robert Bertin, a patent attorney for Swidler Berlin LLP, which does not represent either side in the case. "It would appear that the patent office is trying to influence the judicial process by its actions," and in doing so, regulators are giving NTP only 30 days to respond to preliminary rejections on reexamination, whereas patent holders usually get two or three months, he said.

It is unclear whether a patent office rejection will influence the judge in the case, Bertin said. By litigating the case, the courts have already determined the validity of the claims. Also, NTP has other means of appealing such a decision. "The patent office process is pretty long, so even after a final rejection, the patent holder can bring a lot of administrative appeals that can take a long time," he said.

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