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Fri, Feb 24, 2006 - Page 12 News List

RIM faces US court showdown

PATENT CASE The firm awaits a ruling on a patent dispute today that could shut down its Blackberry wireless e-mail service to close to 3 million US users


The Canadian manufacturer of the BlackBerry wireless e-mail handheld that made addicts of several million Americans, faces a court showdown today over a patent dispute which could cut its US service.

It will be a day of reckoning not just for Research in Motion Ltd (RIM) but for the up to 3 million US users, including businessmen and politicians, hooked on the device, dubbed the "Crackberry" which also doubles as a mobile phone.

A judge in Richmond, Virginia, presiding over the five-year dispute, could decide RIM has infringed patents of US-based company NTP Inc and issue an injunction, closing RIM's US sales and service.

RIM, despite voicing confidence the judge will not follow that course, ended weeks of speculation this month by announcing it has completed a "software workaround" to keep the service up and running in any case.

Rivals sense blood

Still, any move to cut off the existing service could dent RIM's financial numbers, and could send annoyed users to services of the company's competitors, who, sensing blood in the water, are busy readying BlackBerry substitutes.

The injunction was sought by US-based NTP Inc, which claims that the BlackBerry breaches its patents.

NTP sued RIM for patent infringement in 2002 and won an injunction the following year to shut down the wireless e-mail service in the US.

The injunction was delayed pending appeals.

But BlackBerry users were rocked last year with news that a US$450 million settlement had crumbled, and on Nov. 30, a judge ruled there was no valid settlement agreement.

Exemption requested

The US Justice Department has filed a brief in the case seeking an exemption from any injunction for the estimated 1 million government users of the BlackBerry.

Ahead of the case on Wednesday, BlackBerry got a boost when the US Patent and Trademark Office issued a final rejection of one of five NTP patents that was at issue.

But it was unclear whether the move would sway US District Judge James Spencer, who is presiding over the case.

Some observers believe that rather than risk a bad hit to its business with the threat of an injunction, RIM might choose to go back to the negotiating table.

"Few believe the court injunction will come to be as RIM is likely to settle before the court reaches such a decision," said Sarah Butler, a senior research analyst with the Butler Group, which specializes in mobile technologies.

The continuing uncertainty over BlackBerry has come at a good time for other firms who are preparing devices that can offer similar e-mail, telephone and Web surfing technology to RIM's top performer.

Microsoft eyes market

Technology giant Microsoft said this week it was readying a lower-cost alternative to the BlackBerry which could be available within 12 months.

Palm, Nokia, Motorola, Samsung and Hewlett-Packard are also poised to enter the market, raising suspicions that whatever Spencer decides, BlackBerry's days as market leader will be challenged as never before.

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