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BlackBerry owners breathed a sigh of relief Wednesday when Research In Motion, the manufacturer of the ubiquitous wireless e-mail device, announced it had agreed to pay $450 million to NTP Inc. to settle a patent infringement suit. The case dealt with whether a portion of a company’s business operating in another country would be covered by U.S. patent law, a question that had captivated the patent bar. BlackBerry devotees stayed tuned to see if the handheld devices — which allow users to e-mail, browse the Internet and talk on the phone — would be pulled off the market. “Because of the extraordinary popularity of the BlackBerry it got more publicity than any patent case in history,” said NTP attorney James Wallace Jr., a partner with Washington, D.C.’s Wiley Rein & Fielding. “The case had very, very interesting scientific issues and challenging legal issues and interesting personalities on both sides of the table,” Wallace said. “It’s probably the most exciting case I’ve ever handled.” RIM’s attorney, Henry Bunsow, a partner in Howrey Simon Arnold & White’s San Francisco office, said the settlement was purely a business decision on RIM’s part. “It’s a large amount of money until you start looking at the market impact on RIM,” Bunsow said. “The stock was quite depressed as a result of this, and now it’s not.” RIM’s stock closed at about $79 a share on Wednesday compared with its $61 closing price on Friday. As a result, Bunsow said, “RIM’s value went up about $4 billion.” The one-time payment of $450 million gives Waterloo, Ontario-based RIM a perpetual, fully paid license to NTP’s electronic mail system patents. NTP, a private holding company, was created to protect the patents of inventor Thomas Campana Jr., who died last year. The company demanded RIM purchase a license in 2000 and filed suit the following year. In 2002 a federal jury in Richmond, Va., found that RIM had committed willful infringement and awarded NTP $23 million. The court later increased the award to $53.7 million, based on a royalty rate of 8.55 percent of North American BlackBerry sales through August 2003. RIM had continued to put money in escrow to cover royalties on later sales. Wallace said that by the end of February, $150 million in royalties had accrued. The Richmond court also issued a permanent injunction barring RIM from selling the devices, but stayed the ruling pending the outcome of the appeal. Three months ago the Federal Circuit U.S. Court of Appeals also found that RIM was infringing NTP patents. But it gave RIM a chance to continue battling over one element of the case. It said the lower court had misconstrued one claim and asked the district court to consider whether this would have prejudiced the jury’s verdict. The patent bar had been closely following another aspect of the case: whether the Canadian company could escape an infringement claim since one component of its BlackBerry system was located outside the United States. Under U.S. patent law, infringement occurs only if the entire infringing process is within the U.S. The Canadian government jumped into the fray, asking the Federal Circuit to reconsider its findings. The Federal Circuit said the BlackBerry was covered by U.S. law since “the beneficial use and function of the whole operable system assembly is in the United States.” Mark Lemley, an IP professor at Stanford Law School, said he was sympathetic to the court’s finding, “since so little of the invention was used abroad.” But he said people might feel differently if part of a U.S. invention was used in France and subject to French law. The case “leaves a big hole in trying to figure out which precise U.S. laws will have territorial effect,” he said.

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