BlackBerry Patent Dispute Is Settled
Saturday, March 4, 2006
The maker of BlackBerry wireless e-mail devices agreed yesterday to pay $612.5 million to a McLean firm to resolve a long-running patent dispute and put to rest concerns that the popular gadgets might be shut off.
Under the deal, Research in Motion Ltd., the Canadian company that pioneered the BlackBerry service, will license technology to keep it in business and allow it to transmit e-mail that government, emergency services and much of professional Washington have come to rely upon.
The case attracted the close scrutiny of business and government leaders, many of whom walk down K Street or Wall Street tapping the palm-size devices. The case also took on special significance to inventors and big businesses, who viewed it as a test of the patent system in the digital age.
"It's about time this got settled," said Robert G. Sterne, a Washington patent attorney. "Innovators and BlackBerry users should be pleased because the patent system worked," he said. "Now I'm going to go get a BlackBerry next week, because I've been waiting since last year to get one but didn't because of the case."
RIM and the patent holder, NTP Inc., came together on Wednesday after nearly five years of litigation, reaching a truce in New York that NTP characterized as "amicable."
In a written statement yesterday, RIM said: "All terms of the agreement have been finalized and the litigation against RIM has been dismissed by a court order."
As a result, service for BlackBerry's 3.2 million U.S. subscribers will continue uninterrupted.
NTP co-founder Donald E. Stout said he was "tremendously pleased," but declined further comment on the settlement. The other co-founder, Thomas Campana Jr., died in 2004.
NTP, a private patent-holding company, would not say how the money will be distributed. Sources close to the talks who spoke on the condition of anonymity because of the confidentiality of the agreement said most of the money will go to Stout and to Campana's estate and the rest will be distributed among NTP's 20 shareholders.
The meeting that led to yesterday's deal was prompted by a court hearing last week, during which U.S. District Judge James R. Spencer admonished the parties for not settling the dispute. During that hearing in Richmond, Spencer indicated that he would uphold a 2002 jury decision in NTP's favor, and analysts thought a shutdown order affecting non-government users could have come as soon as next week.
By that point, RIM had already exhausted most of its legal options, having lost an appeal in federal court and having been denied a hearing by the Supreme Court. The courts had also denied further delays of a shutdown. But in the meantime, RIM was hoping that a reexamination at the U.S. Patent and Trademark Office would declare NTP's original software and device patents invalid, effectively allowing RIM to question the entire legal underpinning of the case.
In the proceedings at the patent office, NTP was losing the major battles. On the morning of Spencer's hearing last week, the agency declared the second of the five litigated patents invalid.