Judge ends BlackBerry hearing with no decision

By Stephanie Stoughton
The Associated Press
Resource: http://seattletimes.nwsource.com/html/businesstechnology/2002826594_webblackberry24.html

RICHMOND, Va. — A judge ended a hearing over a request for an injunction against the maker of the handheld BlackBerry device without issuing a decision today.

Shares of BlackBerry-maker Research In Motion Ltd. rose $5.54, or 8 percent, to $75.07 on the Nasdaq Stock Market after the hearing was adjourned.

During the hearing, NTP Inc., a small patent holding firm that successfully sued Research In Motion, asked U.S. District Judge James R. Spencer to impose an injunction on the service but permit a 30-day grace period so all sides could work out the details of how to exempt government and emergency workers, among other issues.

The Arlington, Va.-based company also recommended that the judge immediately halt sales of new BlackBerry devices and award it $126 million in damages - for starters. RIM has deposited $250 million or more in escrow, and NTP says that pot of money should be reserved just in case newer BlackBerry devices infringe on its patents.

"This is a self-inflicted situation," said NTP attorney James H. Wallace Jr., who compared RIM to a squatter who continued to live rent-free. "It's just time to pay up."

Henry C. Bunsow, an attorney for Waterloo, Ontario-based RIM, argued against the injunction, saying it would not be in the public's best interests. The process of exempting government and emergency employees from the BlackBerry ban would prove difficult and problematic, he said.

"It will take a lot of time," Bunsow said. "It will take a lot of effort."

Bunsow also pointed to a number of critical users who would not be exempted — including hospitals, large government contractors, energy companies and financial institutions. Over the years, he said, BlackBerry use has become so prevalent that the device has become part of the country's infrastructure.

At the end of the hearing Spencer said he would rule as soon as possible but provided no timetable. He also said that, if he ordered an injunction, he would make sure that the government's needs were met.

RIM's attorneys also noted that the U.S. Patent and Trademark Office is poised to finally reject all patents at the heart of the case.

Although Spencer previously had said he was unwilling to delay his proceedings while awaiting final word from the agency, the speedier moves from the patent office have some attorneys wondering whether Spencer will be swayed.

"I really feel it's too close to call," said Stephen Maebius, a Washington patent attorney not involved in the case. "I can really see it going both ways."

Analysts say BlackBerry users shouldn't be too worried. They say RIM could still settle for as much as $1 billion. And, under the threat of an injunction, RIM has said it would introduce new software that would not violate NTP's patents.

How well that software works is another question. Because RIM has released few details, analysts and some companies are concerned.

NTP, based in Arlington, sued in 2001, and a year later, a federal jury agreed that RIM had infringed on the smaller firm's patents. The jury awarded NTP 5.7 percent of U.S. BlackBerry sales — a rate that Spencer later boosted to 8.55 percent.

Spencer first issued an injunction in 2003 but held off on its enforcement during RIM's appeals. After those efforts largely failed, the case returned to Spencer.

The Justice Department, health-care companies and others concerned about a possible injunction have made recent court filings.

But should a BlackBerry shutdown actually occur, a wide variety of rivals might benefit, ranging from Microsoft Corp., Nokia Corp. and Palm Inc. to lesser-known software makers including Good Technology Inc., Visto Corp. and Seven Networks Inc.

A growing number of handheld makers, including Nokia, Palm, Motorola Corp., Hewlett-Packard Co., and Samsung Electronics Co., are making keyboard-equipped handhelds that run on the Windows Mobile operating system. These devices can deliver BlackBerry-like service using Microsoft's software or third-party applications from the likes of Good and Visto. BlackBerry users also can switch to their cellular provider's brand of service (many of these are powered by Seven and Visto).

Associated Press Staff Writer Dena Potter contributed to this report.

Copyright © 2006 The Seattle Times Company