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RIM Provides Update on NTP Litigation
Posted: 24-Jan-2006 [Source: RIM]

[U.S. Supreme Court denies RIM's petition to review patent infringement case between RIM and NTP to include a review of the extraterritorial reach of U.S. patent law.]

Waterloo, Ontario -- The U.S. Supreme Court issued an order today in the patent litigation between Research In Motion Limited ("RIM") and NTP, Inc. The Supreme Court denied RIM's petition for certiorari that requested the Supreme Court to review issues concerning the extraterritorial reach of U.S. patent law. While review by the Supreme Court is generally uncommon, RIM sought review because it believes the case raises significant national and international issues. Today's order has no bearing on the merits of the outstanding issues in the case before the United States District Court for the Eastern District of Virginia ("District Court").

The District Court will set a hearing date at a later time for further proceedings in the case based on the remand from the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit decision of August 2, 2005 vacated the injunction and damages award originally entered as a result of the District Court trial in 2002 and remanded the case to the District Court for further proceedings. The Federal Circuit decision also reversed or vacated the infringement finding on 9 of the 16 litigated patent claims.

During the upcoming proceedings, the District Court will be asked to decide a variety of matters relating to the litigation, including the impact of the Federal Circuit's reversal of infringement findings on issues of liability and damages. In its briefings, NTP has asked the District Court to enter a new injunction prohibiting RIM from providing BlackBerry service and from using, selling, manufacturing or importing its handhelds and software in the United States. The District Court will schedule a hearing prior to deciding each of these matters. RIM maintains that an injunction is inappropriate given the specific facts of this case, including:

* the outright rejection of all NTP patent claims in rigorous Office Actions already issued by the Patent Office, including second Office Actions in three of the four remaining patents in the litigation that sustained rejections after taking into account NTP's arguments seeking to overturn them;

* the ability to fully compensate NTP through ongoing royalty payments in lieu of an injunction;

* the Supreme Court's November 28 decision to hear the appeal in the case of MercExchange v. eBay on questions relating to the propriety of injunctions in patent litigation;

* the lack of any practical mechanism to prevent an injunction from having an unintended effect on users in the public and private sectors who would be, or who the District Court determines should be, exempt; and

* public interest concerns relating to any potential suspension or interruption of BlackBerry service in the United States.

RIM believes these factors should hold significant weight in any decisions relating to an injunction, however it will ultimately be up to the courts to decide these matters and there can never be an assurance of a favorable outcome in any litigation.

It is also anticipated that the reexamination of NTP's patents by the United States Patent and Trademark Office will continue with special dispatch. All of the NTP patent claims have now been rejected by the Patent Office in its initial rulings in reexamination proceedings, based in part on prior art not considered in the District Court trial in 2002.

As a contingency, RIM has also been preparing software workaround designs which it intends to implement if necessary to maintain the operation of BlackBerry services in the United States.

* The rejections of NTP patents in the initial and second Office Actions issued by the Patent Office were based in part on prior art not considered in the District Court trial in 2002 and were derived through a recently improved Patent Office process whereby reexamination decisions now require thorough review and unanimous agreement from a panel of supervisors and senior patent examiners.

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