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Patent infringement suits often take years to resolve, and sometimes require bet-the-company decisions by the litigants. The litigation between NTP Inc. and Research in Motion Ltd. (RIM) epitomizes just such a patent dispute. In the biggest game of IP chicken in recent memory, the primary question is: Who will blink first? Will RIM, the Canadian maker of the BlackBerry e-mail system, pay hundreds of millions of dollars in damages and licensing fees to avoid a possible shutdown of its system, or will NTP, a patent-holding company based in Virginia, agree to a monetary settlement that is less than its current asking price? With the prospect of an injunction looming over the BlackBerry system, many attorneys have started preparing, in many different ways, for the loss of their BlackBerry connections to their offices. On Feb. 9, in a press release on the BlackBerry Web site, RIM announced its development of “workaround” software — called the BlackBerry Multi-Mode Edition — that will be available to BlackBerry system users in case the court bars use of the current software. Should the workaround system become necessary, BlackBerry users will be able to access it for downloading, the release states. U.S. customers, service providers and system administrators, according to the release, will not see any changes in the way they use the BlackBerry device. The release emphasized that the court has yet to take any action on the proposed injunction, and that customers do not need to take any action now. Here’s some background. The RIM BlackBerry system allows users to receive and send e-mail messages on mobile BlackBerry devices, using their normal e-mail accounts. The primary features that have endeared the BlackBerry devices to its users are wireless e-mail and calendaring, which allows users to respond to e-mails just as if they were at the office. NTP owns several U.S. patents covering aspects of electronic mail transmission and display, and in 2001, NTP sued RIM alleging patent infringement by the BlackBerry system. The next year, a jury found that RIM infringed the NTP patents and awarded NTP more than 5 percent of U.S. BlackBerry sales as damages for the patent infringement, according to a Dec. 9, 2005 article on CNET News.com. With the significant volume of domestic BlackBerry sales, this damage award would exceed several hundred million dollars. The federal district court subsequently enhanced the damage award to NTP, and Judge James R. Spencer of the Eastern District of Virginia in Richmond is contemplating NTP’s request for a permanent injunction that could shut down part or all of the BlackBerry system. RIM has requested that the district court delay entering such an injunction until the U.S. Patent & Trademark Office has fully processed recent requests for re-examination of the NTP patents. In the early stages of the re-examination process, the patent examiners have cast doubt upon the validity of the NTP patents, according to a June 24, 2005 article on TechWorld.com. A final ruling on the re-examination process, however, could take years to complete, and NTP could appeal the final rulings on the re-examination process for a number of years. Spencer has indicated that the patent office’s re-examination proceedings will not influence his rulings on the case and timetable for entry of the injunction. RIM has petitioned the appellate courts to intervene in the situation and instruct the district court to postpone any decision on the permanent injunction against the BlackBerry system. Although the Federal U.S. Circuit Court of Appeals has affirmed certain jury findings of infringement in favor of NTP, the appellate courts have refused to interfere with the district court’s authority to enter a permanent injunction against RIM and the BlackBerry system. On Jan. 23, in fact, the U.S. Supreme Court turned down RIM’s final request for such relief. The Supreme Court’s refusal to intervene makes it highly unlikely that Spencer will delay the entry of the injunction, unless the parties can reach a settlement in the matter. Spencer requested that the final briefing on the injunction issue be filed last week, with a hearing to be held Feb. 24. NEXT STEP? In 2005, RIM requested that the court enforce a tentative settlement against NTP requiring a $450 million settlement payment, according to the article on TechWorld.com. The parties, however, never finalized the deal, and the district court refused to approve the settlement without a full agreement between the parties. RIM claims in its pleadings before the court that it has developed a “software patch” that would avoid infringement of the NTP patents, but there is skepticism in the industry as to the functionality and legalities surrounding such a patch. With no settlement in sight, and in the absence of a viable non-infringing alternative, RIM has been left with few options to avoid a shutdown of the BlackBerry system. As such, RIM appears to be one ruling away from a serious shutdown of BlackBerry, which undoubtedly will have a devastating negative impact on its ability to conduct business in the future. Because government personnel such as law enforcement and emergency health care workers rely on the BlackBerry system for emergency response services, RIM has requested in its pleading to the district court that, if the court enters an injunction, the judge restrict the scope of the injunction to nonemergency or nongovernmental personnel. RIM says in its pleading to the court that about one-quarter of the 4.3 million BlackBerry users could fall into that category of emergency services. Any type of delay in the entry of an injunction or the scope of the injunction would reduce NTP’s bargaining position in the settlement negotiations. Hence, NTP is also just one ruling away from losing much of what it has gained during the last five years of litigation against RIM. In light of the scheduled Feb. 24 injunction hearing, attorneys are preparing in different ways for a shutdown of the BlackBerry e-mail system. Attorneys who use the system appear to be firmly divided into two camps, with one group examining alternative systems if an injunction comes about, and the other taking a wait-and-see approach. The first camp includes attorneys who do not want to risk any possible interruption in their ability to communicate immediately with their clients. For these attorneys, the connection to the office enabled by the BlackBerry has become an indispensable tool for their practices, one they cannot foresee living without. The BlackBerry allows them to respond immediately to client communications and land potential clients inquiring about their availability. In preparation for a possible shutdown of the BlackBerry system, these attorneys are researching alternative systems that will allow them to stay connected with the office. Although RIM’s BlackBerry product has dominated the market since 1999, growing competition exists from other sources in the market. Microsoft Corp., Good Technology Inc., Palm and Seven Networks Inc. offer their own versions of BlackBerry-type mobile e-mail service, and Nokia and Motorola are developing similar devices. While these attorneys are looking at possible replacements for their BlackBerrys, none look forward to a change in communication protocols or support platforms, which will take a toll in human transition costs and monetary costs. The workaround software developed by BlackBerry should ease many of these attorneys’ worries, assuming it works as RIM has stated it will. Other BlackBerry users have adopted a less proactive attitude, hoping that RIM will pay the settlement demand and avoid any potential shutdown or the need for workaround software. According to most experts, there is too much value built into the BlackBerry system to let RIM gamble the market away. Given that, many attorneys expect that NTP or RIM will blink before an injunction is entered, which will allow the parties to work out a compromise settlement and avoid the prospect of an injunction. These attorneys are waiting to see how things develop closer to the injunction hearing date — basically taking a wait-and-see approach. Attorneys taking this approach have not made any immediate contingency plans, instead preferring to believe that the district court will not issue a final injunction before the parties reach a settlement. In the unlikely event that an injunction shuts down the BlackBerry service, these attorneys will consider alternatives at that point — something that won’t be difficult, they believe, because other technologies could be easily implemented should an injunction actually cause a shutdown. In early December, the consulting firm of Gartner Inc. recommended that its clients “[s]top or delay all mission-critical BlackBerry deployments and investments in the platform until RIM’s legal position is clarified,” according to a Dec. 7, 2005 article on Computerworld.com. Consistent with that recommendation, one option for many law firms is to simply delay purchasing new BlackBerry systems. Like most of the attorneys that rely on BlackBerry devices to stay connected to their offices, these firms are waiting to see what transpires with the injunction before making the significant investment in a BlackBerry system. Almost all attorneys who use BlackBerrys recognize their value as important client service tools. These attorneys understandably worry about their inability to respond to client communications in the immediate manner their clients now expect. One thing everyone agrees on, however: Technology and market dynamics will fill the void. If the BlackBerry system shuts down, a new crop of substitutes will surely spring up, and things eventually will get back to business — and e-mail — as usual. D. Scott Hemingway is a member in Hemingway & Hansen in Dallas. His practice focuses on intellectual property, including patents, copyright and trademarks. He is a member of the Dallas Bar Association’s Intellectual Property Law Section and the Dallas-Fort Worth Intellectual Property Law Association.

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