A US federal judge has ruled against Research In Motion after the Canadian manufacturer of the iconic BlackBerry wireless e-mail device asked the judge to enforce an earlier $450m settlement in its long-running patent dispute with NTP, a US-based patent firm.
Judge James Spencer ruled that a draft settlement agreed between the two companies in March was not enforceable and rejected RIM’s request for a delay in the case. He told lawyers to prepare arguments on the next steps.
The ruling is the latest in a series of legal setbacks for Waterloo, Ontario-based RIM. It sets the stage for the US court to consider imposing fines on RIM for infringing NTP’s patents and possibly banning the sale of BlackBerry devices in the US unless RIM reaches a new settlement with NTP.
The US accounts for about 70 per cent of BlackBerry sales and there are roughly 4m BlackBerry users worldwide.
RIM has consistently maintained its technology did not breach any NTP patents in spite of a succession of courtroom defeats. On Wednesday, in the wake of the latest ruling, the company maintained that an injunction was “inappropriate”.
In an effort to reassure customers and nervous investors, RIM said it had developed a software fix that it believed would work around the disputed patents and enable the company “to maintain the operation of BlackBerry services”.
RIM, which also faces competition from a slew of rivals including Nokia and Motorola, the mobile phone giants, has seen its shares fall more than 30 per cent in the last 12 months even though BlackBerry sales continued to grow strongly.
On Wednesday its shares fell another $3.79, or 5.8 per cent, to close at $61.13.
RIM had asked the judge to delay the case while the Patent and Trademark Office decides whether the NTP patents are valid. In denying the request, the judge said he planned to “move this litigation forward so as to bring closure to this case”.
In a preliminary finding this year the patent office said NTP’s patents were invalid but NTP has the right to challenge that finding. and, as the judge noted, the process could last for years