RIM faces setback in patent fight

Earlier this month, the U.S. Court of Appeals for the Federal Circuit in Washington turned down RIM’s request to rehear a patent infringement case against the company en banc or before all 12 judges, leaving RIM open to the possibility of an injunction against the sales of its BlackBerry communications products in the U.S. A panel of three of the court’s judges upheld a previous ruling in August that found RIM had infringed on patents held by NTP.“It’s always a long shot to ask all of the (Federal Circuit) to come and sit in a huge panel to consider a dispute over a particular infringement,” said Simon Chester, partner at Toronto-based law firm Heenan Blaikie LLP.
With the odds stacked against it, RIM said it will ask the U.S. Supreme Court to review the appeal court’s August decision. That, however, won’t be easy given the U.S. Supreme Court turns down four out of every five cases that come to it and it usually takes only one or two patent cases per year, said Chester.
While RIM may be losing the legal battle, the U.S. Patent Trade Office recently rejected all claims of remaining NTP patents, making RIM’s case a little easier to plead to the country’s top court.
“It says the body in the U.S. system that looks at patents has some serious questions about whether NTP has anything worth patenting,” said Chester. “It’s now up to NTP to challenge that and say the Patent Office is getting this wrong, our stuff really is original, our stuff is useful, and our stuff really did represent innovation in wireless technology and we are entitled to the patents.”
James Hurst, partner at Winston & Strawn LLP in Chicago, however, points out that the PTO almost always rejects patents in first office actions, which means a future decision could go either way.
“Ultimately whether the PTO is going to reject all the claims that RIM has been judged to infringe it doesn’t seem likely to me,” said Hurst.
In the meantime, both Chester and Hurst expect NTP to ask the federal court to impose an injunction on RIM, which under other circumstances, would be a foregone conclusion.
“(NTP) is entitled to its injunction,” said Hurst. “It would be an abuse of discretion for a district court to not issue an injunction under these circumstances. It would be unfair to keep us (RIM) off the market when there’s this cloud over NTP’s patents.”
Given that the U.S. accounts for the majority of RIM’s total sales and with established and newer entrants into the mobile device market, RIM stands to lose a lot, said Yankee Group wireless analyst John Jackson. “This issue is an albatross for RIM,” said Jackson. “It has had the effect of forestalling significant partnership-oriented initiatives that otherwise might now be in place.”