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Canadian
and US relations have been a little bruised of late, the unilateralism of the
Bush administration clashing with the multilaterialism of two Canadian
governments. Disputes have been about beef, prescription drugs, and softwood,
now this is added to the mix. Also,
I noticed that Michael Ignatieff has left his position at Harvard and writing
for the NYT Magazine to return to Canada as
a politician. Methinks Stephen Straker would be pleased. kwc Judge May Halt BlackBerry Service in U.S. Richmond, VA - A
federal judge has rejected Research In Motion
Ltd.'s effort to settle a patent
case and moved a step closer to reissuing an injunction that threatens
BlackBerry e-mail service in the United States. U.S. District Judge James R. Spencer on Wednesday turned
down the wireless device maker's bid to enforce a preliminary $450 million
settlement reached earlier this year with NTP
Inc., a small firm that has convinced a jury that BlackBerry
infringes on its patents for wireless communication. In another blow to
RIM, Spencer also turned down the Canadian company's request to delay the case
pending final word from the U.S. patent office, which has preliminarily
rejected the patents at the heart of the lawsuit. With those issues out of the way, Spencer next plans to
address damages and, once again, an injunction would force RIM to halt
BlackBerry service in the United States. After a jury decided against RIM in
2002, Spencer held off on the injunction pending appeals. Analysts and industry
observers say RIM, based in Waterloo, Ontario,
will likely be forced to settle the lawsuit for as much as $1 billion. Still,
some also say RIM's hands aren't completely tied; it's also somewhat unlikely
NTP would want to force a shutdown, a scenario that could leave it with a
smaller payoff. "I think
there's going to be a settlement, and it's just a matter of how much is to be
coerced out of them," said Rod Thompson, a San Francisco patent attorney. In a statement, RIM
said it has been preparing technology that would keep its service running in
the United States, where most of its 3.65 million BlackBerry customers are
based. But analysts, however, are skeptical about the effectiveness of any
workaround. James H. Wallace Jr.,
an attorney for Arlington, Va.-based NTP, said he hoped the judge's decisions
would "bring the parties back to the table." However, RIM's statement gave no
indication it was ready to compromise, saying it would proceed with plans to
appeal an earlier court decision to the U.S. Supreme Court. "While further review by the
Supreme Court is generally uncommon, RIM continues to believe this case raises
significant national and international issues warranting further appellate
review." RIM says an injunction
would be inappropriate for a number of reasons, including the patent office
proceedings, public interest concerns, and the Supreme Court's recent decision
to hear an appeal in the eBay
Inc. v. MercExchange case
that addresses the use of injunctions in patent suits. In the meantime, RIM's
customers, some of whom warmly refer to their devices as CrackBerries for their
addictive use, are getting worried.
Citigroup analyst Daryl Armstrong said an injunction ruling could lead
some users to move ahead with contingency plans. Among those concerned
is the U.S.
government, which has thousands of employees with BlackBerries. While NTP has promised that the
injunction wouldn't apply to government and emergency employees in the United
States, the Justice Department argued in a court filing that RIM might have
difficulty pinpointing its workers.
NTP has responded that wireless carriers would be able to identify their
government users with ease. Shares of RIM fell
$3.79, or about 5.8 percent, to $61.13 in Wednesday's trading. The stock has
tumbled 41 percent over the past year after peaking at $103.56 last December. Wednesday's developments also appeared
to boost the shares of Palm Inc.,
which makes competing handheld devices including the popular Treo. The stock
rose $1.61, or 6 percent, to close at $28.38 on the Nasdaq Stock Market. NTP was co-founded by
Thomas J. Campana Jr., a Chicago-area engineer who in 1990 created a system to
send e-mails between computers and wireless devices. The BlackBerry hit the
market in the late 1990s, becoming a hit with lawyers and businesspeople who
wanted to check e-mails away from their offices and home computers. But NTP's founders
noticed similarities between their technology and the BlackBerry. In 2001, they
filed suit, and a year later, a federal jury in Richmond agreed that RIM had
infringed on NTP's patents. The
jury awarded the smaller company 5.7 percent of U.S. BlackBerry sales, though
Spencer later increased that rate to 8.55 percent. The amount of damages and
fees now exceeds $200
million
and grows along with the BlackBerry's popularity. |
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