Subject: [NEXTEL-1] RIM loses patent-infringement ruling

From: [email-masked]
Date: Wed, 06 Aug 2003 00:20:17 -0400

RIM loses patent-infringement ruling

By Richard Shim
Staff Writer, CNET News.com
August 5, 2003, 3:28 PM PT

update A judge has ruled in favor of holding company NTP in its
patent-infringement case against BlackBerry maker Research In Motion,
awarding monetary damages and fees.
The United States District Court for the Eastern District of Richmond, Va.,
ruled late Tuesday in the case brought against Waterloo, Ontario-based RIM.
It awarded NTP $53.7 million.

The court also granted an injunction preventing RIM from making, using, or
offering to sell handhelds, services or software in the United States. The
injunction will remain in effect until the date of expiration of NTP's
patents, the latest of which is May 20, 2012. The court then stayed that
injunction, pending an appeal by the Canadian company.

The two sides have been engaged in a legal dispute since late 2001, when NTP
claimed that RIM infringed on its patents covering the use of radio
frequency wireless communications in e-mail systems. RIM's BlackBerry
service, software and devices allow individuals to wirelessly send and
receive information, such as e-mail and company data, on handheld devices.

"This ruling is a road map for what will happen to RIM if they don't win the
appeal," said Jim Wallace, an attorney with Wiley Rein & Fielding, who
represented NTP in the case.

Wallace added that NTP will continue to negotiate patent licensing
arrangements--including, possibly, an exclusive license--with manufacturers.
Wallace declined to comment on what the terms or royalty rates would be for
any licenses but added that RIM would not necessarily be excluded from
consideration.

RIM said in a statement that it was gratified that the judge did not make
the injunction take effect immediately.

"We are obviously pleased with today's ruling and believe that the District
Court's decision to stay the injunction is especially appropriate given the
frequency of successful appeals at the appellate level as well as the
specific merits of RIM's appeal," Henry Bunsow, the attorney representing
RIM, said in a statement.

Bunsow said RIM is still seeking a re-examination of NTP's patents by the
U.S. Patent and Trademark Office. "While the remaining re-examination and
appeal processes may take several years to complete, we remain confident
that RIM will ultimately prevail in this matter," Bunsow said.

Wallace added that RIM has 30 days to file the appeal and that he expected
it to be at least another year before a court would make a final decision on
RIM's appeal.

The United States is RIM's largest market, and while the monetary award will
push RIM's point of profitability out a bit further, NTP's case shouldn't
hurt RIM's future dramatically, according to Jason Tsai an analyst with
ThinkEquity Partners.

"It doesn't do NTP any good to shut RIM down, because its business is based
on licensing...we believe that RIM will settle at some nominal licensing
rate and while we view this as a short-term negative...the long-term effects
will be minimal."

In its earnings reports, RIM has been stating two sets of results, depending
on the outcome of the infringement case. A negative ruling would bite into
RIM's financial results.

The BlackBerry maker is also embroiled in a series of lawsuits with start-up
Good Technology. RIM's latest request for injunctive relief against Good
Technology was thrown out.

RIM shares traded lower, dipping $3.16, or about 11 percent, to $25.12 at
the close of the financial markets. Shares slipped lower in after-hours
trading, dropping to $22.99 on the Island ECN electronic marketplace.

http://news.com.com/2102-1041_3-5060296.html?tag=ni_print

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