Final NTP Patent Struck Down

BlackBerry , maker of the popular Blackberry mobile email device, got a small reprieve in its increasingly grim legal struggle, as the U.S. Patent Office yesterday issued a preliminary ruling invalidating another patent held by NTP.

NTP sued RIM for patent infringement four years ago and won a judgment that would shut down the Blackberry service; RIM has appealed that ruling, so far unsuccessfully. If upheld, yesterday's decision would invalidate the fifth patent under review by the Patent Office; all five of the patents at issue have now been struck down by the U.S. government, pending appeal.

Remarkably, that fact may not allow RIM to avoid a shutdown of its mobile messaging service. U.S. District Judge James R. Spencer, who has issued a series of rulings unfavorable to RIM, has scheduled a hearing in the case for Feb. 24, and plans to issue a final decision shortly thereafter. The NTP appeal should take 30 days to complete, and Judge Spencer has made it clear that he will not wait for a final ruling from the Patent Office. (See Supreme Court Rejects RIM.)

A settlement in the case is still possible, but RIM executives have made clear their unwillingness to allow NTP to become in effect a part owner of their company, and appear set on exhausting all legal possibilities.

"Despite this win for RIM, we think that it is highly unlikely to impact the impending District Court decision," writes Daryl Armstrong, senior wireless equipment analyst at Citigroup Investment Research, in an opinion issued this morning. "We still expect the District Court to rule against RIM and think that an order of injunctive relief [i.e., the shutdown of Blackberry] is probable."

RIM has repeatedly said that it has developed a workaround solution for Blackberry users that would avoid any patent infringement issues, but the legal dispute is clearly having an impact on the company's business. (See Blackberry Users Cling Tightly.)

Rival mobile email provider Good Technology Inc. reports that it has shipped test servers to about 100 current RIM customers, as a backup option. Good CEO Danny Shader says he's had more than 750 inquiries from enterprise customers now using Blackberries. (See Users in Blackberry Jam.)

— Richard Martin, Senior Editor, Unstrung

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