A U.S. federal court’s refusal to rehear NPt Inc.’s patent case against Research In Motion once again casts doubt over the Canadian firm’s right to sell and service the popular device south of the border.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 (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.
The 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 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.
Trade Office help
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. On the other hand RIM will argue it would be unfair to keep it off the market when there’s a cloud over NTP’s patents.
In an interview just before deadline, RIM president Mike Lazaridis refused to talk about whether the recent decision puts more pressure on his company to settle with NTP.
A $450 million offer in May fell apart, RIM said at the time.
Given that the U.S. accounts for the majority of RIM’s sales it stands to lose a lot as this drags on, 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.”
Western Europe
For example, RIM’s currently licenses its software on non-RIM devices in Western Europe but not in the U.S.
As for Canadian customers and partners, both lawyers agree that having a plan of action and acquiring legal advice can go a long way to saving businesses aggrevation down the road.
“Treat your intellectual property really seriously and recognize that if you get involved in a patent fight, it will be long, complicated and expensive,” warned Chester.
“Therefore you should think very seriously about getting all your ducks in line and getting as much intellectual property protection as you can before getting into the U.S. market.”
With that in mind, however, Chester also said there’s nothing universal about this particular case in that both the plaintiff and the defendant are tenacious and will fight to the end.
