Judge deals RIM blow in BlackBerry case

[BigPigPeaches]

Gentlemen, start your parody engines.

 

 

Judge deals RIM blow in BlackBerry case By Peter Kaplan and Jeremy Pelofsky Wed Nov 30, 6:43 PM ET BlackBerry maker Research In Motion Ltd. (Toronto:RIM.TO - news) (Nasdaq:RIMM - news) was dealt another legal setback in a key patent infringement case on Wednesday, increasing the risks it may have to pay more to settle the claim or shut down its U.S. mobile e-mail service. U.S. District Judge James Spencer rejected RIM's request to delay the case and refused to force patent holder NTP Inc. to accept $450 million from RIM as settlement of NTP's patent action. "Valid patents would be rendered meaningless if an infringing party were allowed to circumvent the patents' enforcement by incessantly delaying and prolonging court proceedings, which have already resulted in a finding of infringement," Spencer said in his ruling from Richmond, Va. Spencer said he would request briefs and set a hearing date to deal with NTP's request for damages against RIM and an injunction that would halt U.S. sales of the BlackBerry and shut its service. RIM shares were halted before the ruling was issued, then plunged as much as 7.9 percent after reopening. They closed down 5.8 percent at $61.13 on Nasdaq. RIM said in a statement that it would continue efforts to get the U.S. Supreme Court to review the case. The Supreme Court on Monday agreed to review a similar case involving online auctioneer eBay Inc. (Nasdaq:EBAY - news) and patent holder MercExchange, and take up the broad question of when it is appropriate to grant an injunction against a patent infringer. In its statement, RIM also reiterated that it has prepared a software upgrade that can be used to work around the disputed patents. However, Kona Shio, an analyst with research firm Conscius Capital Partners in Montreal, said Spencer's rulings increased pressure on RIM to settle the case, even though a deal with NTP could cost the company more than $1 billion at this point. "I don't think RIM wants to take it all the way to an injunction, so the likelihood is that they are going to settle before that happens," Shio said. Mike Abramsky, an analyst with RBC Capital Markets, said in a note to investors that the case could lead to a temporary U.S. shutdown. But he said investor fears were "overblown" and predicted RIM would settle the case. Abramsky said the company could afford to pay up to $1 billion to settle. As of late August, RIM said it had slightly more than $1 billion in cash and cash equivalents on hand and had set aside an additional $163 million for a potential settlement. NTP's lawyer, James Wallace, also raised the possibility of renewing settlement talks. "We would hope today's developments would bring the parties back to the table," he said. The two companies agreed to a deal worth about $450 million in March but the agreement collapsed in June as legal wrangling over NTP's patent claim continued. Analysts said the uncertainty hanging over the BlackBerry could give a boost to alternative mobile e-mail devices like Palm Inc.'s (Nasdaq:PALM - news) Treo 650 Smartphone. Palm's shares soared 6 percent on the news. Spencer issued an injunction against RIM in 2003 after NTP successfully sued the company in the U.S. District Court for Eastern Virginia, but the ruling was stayed pending appeal. An appeals court in August scaled back the infringement ruling against RIM but upheld some of NTP's patent infringement claims. Spencer must still determine what effect, if any, the appeals court ruling should have on the injunction and damages being sought by NTP. (Additional reporting by Jeffrey Hodgson in Toronto)

 

[mike fitzwell]

Wow, that headline slipped through the crack, eh?