High Court Rejects Blackberry Case In NTP Dispute

WASHINGTON -(Dow Jones)- The U.S. Supreme Court Monday rejected Research in Motion's (RIM) Blackberry patent dispute with NTP, leaving the outcome of the intense battle over technology in the popular wireless device to lower courts.

RIM has been locked in a high-stakes court fight with NTP, a Virginia patent concern, over technology the company uses to transmit email wirelessly to handheld Blackberry devices. RIM has lost at several stages in the federal court litigation, threatening operation of the popular Blackberry email system.

The Supreme Court petition asked the justices to review whether U.S. patent laws apply to its product and services even though the company's operations are located in Canada.

While the high court petition was pending, deliberations in a Virginia U.S. District Court continued where RIM has already been found guilty of patent violations. Most recently, RIM asked a federal trial judge to not issue a ban on Blackberry devices in the U.S. after NTP filed for $126 million in damages, royalty payments and a permanent injunction against RIM.

NTP's injunction request would cover sales and services of Blackberry devices in the U.S., where the company generates 70% of its revenue.

The Supreme Court is separately hearing an appeal involving eBay over the standards of patent-related injunctions like the one NTP wants issued against its competitor. RIM doesn't raise this issue in its appeal to the Supreme Court, but the outcome of the injunction issue could have a bearing on the Blackberry case.

The District Court in 2003 ordered RIM to pay NTP an 8.55% royalty on U.S. BlackBerry sales. The company continues to set aside money to cover those payments. The two companies have attempted to settle the case, but they have also fought aggressively in federal court.

As the dispute has continued, RIM has developed alternative technology that sidesteps NTP's patents. The U.S. Patent and Trademark Office, which is reviewing the five patents in question, has also preliminarily rejected the patents.

RIM, in its Supreme Court appeal, argued the justices needed to define limits on the reach of U.S. patent law. "This question directly implicates the broad, increasingly common issue of how the lower courts should apply a federal statute's express or presumed territorial limitation in cases that involve use of the worldwide, geographically borderless Internet," RIM said.

NTP downplayed the significance of the legal question RIM put before the Supreme Court. "RIM's position would gut the effectiveness of U.S. patent law," NTP said, arguing that any company could move portions of its operations outside the U.S. to avoid complying with patent restrictions.

Intel and the Canadian government filed briefs with the Supreme Court backing RIM's appeal. Intel, in its brief, said the issue RIM brings to the court is significant. "The scope of liability under American patent laws for activities crossing national borders is an issue of great and growing importance," Intel said.

The case is Research in Motion v. NTP, 05-763

-By Mark H. Anderson, Dow Jones Newswires, 202 862-9254; mark.anderson@dowjones.com

(Stuart Weinberg in Toronto contributed to this report.)

(END) Dow Jones Newswires"

Posted to the site on 23rd January 2006