Out of touch

Court to decide if professionals will lose blackberry fix

John Bachofner
Bullivant Houser Bailey

The Blackberry. The small Personal Digital Assistant (PDA) device is addicting – just ask the spouse of any regular user. In our home, anyone is free to call out “Blackberrius Interruptus” if my attention is momentarily drawn from some family activity into answering the message of a colleague. Some professionals see it as a life-line, allowing them to stay in touch with clients and co-workers while actually spending more time at home or away from the office. Love it or hate it, an estimated 3.5 million Blackberry users in the United States are anxious to know the fate of their PDAs. A federal judge heard arguments at a Feb. 24 hearing in Richmond, Va., but did not make a ruling.

That hearing is only the latest round in a legal battle that began in 2001, when Arlington, Virginia based Network Technology Partners Inc. (NTP) sued Waterloo, Ontario based Research In Motion Ltd. (RIM), claiming that its Blackberry infringed several wireless email patents. In November 2002, following a lengthy and contentious legal battle, a federal jury found that RIM had infringed on the NTP patents. In 2003, U.S. District Court Judge James R. Spencer awarded nearly $54 million to NTP and, more importantly, issued a permanent injunction against RIM, enjoining it from further manufacture, use, importation or sales of all accused systems, software and handhelds. Spencer delayed enforcement of the injunction pending appeals that were filed by RIM. However, those appeals were mostly unsuccessful, and the case was recently remanded back to Spencer. Ironically, the U.S. Patent and Trademark Office (USPTO) issued a set of preliminary rulings last December that found NTP’s patents to be invalid. While the rulings are not final, they may telegraph the USPTO’s final ruling expected later this year. Judge Spencer has repeatedly refused to await a final decision from the USPTO before deciding whether to implement an injunction.

An injunction shutting down all Blackberry service is a scenario many would like to avoid. Many use the handheld as a means for quick communication, when other communication options are unavailable, because it utilizes a different network.

Industry leaders have long expected the drama to end in a settlement between RIM and NTP. In 2005, a tentative settlement for $450 million failed when the parties could not agree on specific terms. In a Feb. 9 press release, RIM Chairman and Co-CEO Jim Balsillie reiterated its interest in reaching a settlement, while at the same time announcing that a software workaround had been designed to keep Blackberries operational.

According to Pat Woodbury, director of information technology for Bullivant Houser Bailey, contingency plans have been laid for the worst-case scenario where Blackberry service is discontinued. He is monitoring the availability of Palm-based Treo handhelds, which could be substituted as a last resort. When asked about the software workaround recently announced by RIM, Woodbury had some reservations. “Our confidence in the workaround is not strong. While I understand (RIM’s) reluctance to make the new software available too soon, we need time to test and determine its functionality.”

Another concern is the potential for exposure if the workaround is also found to infringe on any patents. In its press release, RIM disclosed that it had obtained a legal opinion from a leading expert in patent law and workarounds confirming that its workaround designs do not infringe any of the NTP patent claims remaining in the litigation.

Despite posturing from both sides, an immediate shutdown seems unlikely. Even NTP has requested that RIM be given a 30-day period to allow customers time to make other arrangements. Most experts doubt that it will go that far because of the money at stake. However, most did not think it would get this far. Either way, professionals addicted to the convenience of wireless email will not have to look far for a PDA offered by RIM’s competitors.

John R. Bachofner is a shareholder in the Vancouver office of Bullivant, Houser, Bailey, PC, a west coast regional, multi-practice law firm with six offices in four states. Bachofner utilizes a Blackberry and other technology to enhance his practice of bankruptcy, creditor’s rights, commercial litigation, and business law in both Oregon and Washington. He can be reached at 360-906-6340 or john.bachofner@bullivant.com.

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