December 08, 2005, 5:03 PM — Research in Motion Ltd. (RIM) and NTP Inc. are in talks with a mediator in a possible attempt to settle their legal dispute, which could result in an injunction on the sales of the BlackBerry handheld and e-mail service in the U.S., according to a RIM executive.
NTP has sued RIM, claiming the BlackBerry maker is infringing on patents held by NTP for a wireless e-mail system. NTP has won several court victories of late, and RIM has exhausted most of its avenues of appeal. Legal experts and analysts expect the companies will settle their dispute rather than risk the shutdown of the very popular BlackBerry service. The two companies are actively talking, said Mark Guibert, vice president of corporate marketing for RIM.
"As NTP knows, RIM and NTP had been communicating with each other through the court-appointed mediator during the last several days. We are precluded by law from discussing the substance of that exchange. RIM expects to continue communications through that channel," Guibert said in a statement provided to IDG News Service by RIM's public relations agency on Thursday.
NTP's lead counsel, James Wallace of Wiley Rein & Fielding LLP, declined Thursday to confirm whether NTP was in mediation talks with RIM.
After several years of litigation, RIM has been unable to overturn a 2003 jury verdict that it infringed upon patents held by NTP. An appeals court in 2004 lifted the injunction on BlackBerry sales imposed by the U.S. District Court for the Eastern District of Virginia, saying the lower court incorrectly interpreted a key claim that could affect the case, but upheld the fundamental ruling of infringement.
Earlier this year, the two parties announced they had settled their dispute for US$450 million, but the deal collapsed. RIM recently asked the Virginia court to enforce the terms of that settlement, and stay the remaining proceedings pending the U.S. Patent and Trademark Office's review of NTP's patents, but was denied on both counts. The PTO has issued preliminary rulings invalidating NTP's patents, but the final rulings might not come for years and NTP has the right to appeal them.
The parties are expected to convene at some point over the next few weeks for hearings on the reimposition of the injunction, Wallace said.
Users, analysts and investors are almost unanimous in their calls for a settlement, but RIM has another option to bypass the patents, according to company executives. RIM claims it has developed a software "workaround" that would allow it to maintain the service without infringing on NTP's patents, but it has not said exactly how this works or how it would install such a work-around.