Saturday, October 08, 2005

Blackberry Whine

Here is a U.S.-Canada battle worth watching. Research in Motion, the makers of the ubiquitous and, for some, essential Blackberry wireless e-mail and phone devices has been sued for patent infringement. The U.S. patent holder, NTP, sued RIM for infringing patents relating to its software for transmitting e-mail. RIM's main argument is that its servers are located in Ontario (that's Canada, not California), which is a separate sovereign country where U.S. patent laws are not in effect. The U.S. Court of Appeals for the Federal Circuit, which also hears appeals from the Court of International Trade, was not swayed by the border argument. The most recent opinion is here.

The news media now reports that the Federal Circuit has denied RIM's request for en banc review by the entire 12-member court. RIM faces the possibility of an injunction against sales or operations in the U.S., which, according to the New York Times, is 70% of its revenue.

Two interesting things are bound to happen. First, RIM will surely appeal to the Supreme Court which, if it takes the case, will have to make a decision about the extraterritorial application of the patent law. This may be unlikely as the Federal Circuit hears all patent appeals and there is no possibility for another circuit to disagree with it. Also, there is no obvious constitutional issue. The second thing going on is that the U.S. Patent & Trademark Office is re-examining the NTP patents to see if they should have been issued in the first place. According to RIM, that is looking like a promising way to get this wrapped up.

We'll have to see what happens. Just image the hue and cry from Blackberry addicts if the service goes dark. Palm shares rose on this thought alone. If that happens, I suspect the Canadian military will have to move to the border as U.S. white-collar workers threaten to invade Ontario in an effort to force RIM to settle with NTP.


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