RIM to Appeal $23M Patent Suit Loss

The jury ruling could effectively stop the sale of RIM's Blackberry devices in the U.S. but the company vows a spirited legal appeal.
Posted November 22, 2002

Ryan Naraine

Ryan Naraine

Just weeks after scoring valuable licensing deals with the likes of Nokia, Palm and Handspring, Canada-based Research in Motion was body-slammed with a $23 million judgment for infringing patents owned by NTP.

The Blackberry e-mail device maker halted trading in its shares late Thursday after a U.S. jury in the District of Virginia ruled in favor of NTP and ordered RIM to pay $23.1 million for infringing on five patents owned by NTP. RIM was accused of violating eight NTP patents.

The ruling could have serious ramifications for RIM, particularly in sales of its Blackberry devices in the U.S. Lawyers for the Illinois-based NTP is moving ahead with a request for an injunction to block RIM from selling the devices in the U.S.

Reeling from the ruling, RIM said it would appeal with Chief Executive Mike Lazaridis insisting the verdict has no effect on RIM's patents and other intellectual property.

"Although we are disappointed that the jury found for NTP at this stage of the litigation, it is important to understand that this verdict is not final and that it is only one step in a continuing legal process that could take several years or more to formally and finally resolve," Lazaridis said.

"If the verdict is accepted, we will appeal. The validity and enforceability of our own patents were never at issue and are not affected at all by this verdict today," he added.

RIM attorney Charles Meyer described the jury verdict as "wrong as both a matter of law and fact," arguing that it was prejudiced by errors in the pre-trial and trial rulings.

With a high degree of uncertainty over the future sales of Blackberry devices in the U.S., analysts believe the legal trouble could hurt RIM's long-term outlook.

Jupiter Research analyst Michael Gartenberg said the loss of the patent suit was ironic in that RIM itself frequently litigated others to protect its patents. "While this will be appealed, it is a setback for the company that will allow competitors the opportunity to gain on RIM if it becomes overly distracted in legal battles," Gartenberg told internetnews.com.

At the very least, the loss of the suit is a serious blow to RIM, coming on the heels of a trio of patent licensing deals with Nokia , Palm Inc. and Handspring .

The Handspring deal included the settlement of a patent dispute over keyboards used on Handsping's Treo devices. The deals with Nokia and Palm deals covered license certain patents for its thumb-operated QWERTY keyboard technology.

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