Update: RIM wins a reprieve for now

In one of the biggest anticlimaxes so far in 2006, the long-running RIM-NTP legal battle will… keep on running.

U.S. District Court Judge James Spencer ended today’s hearing without issuing a decision on NTP’s request that Spencer issue an updated $126 million judgment as soon as possible, nor on reinstating an injunction to block Research in Motion’s BlackBerry service in the U.S.

Spencer said he would take the matter under advisement and that he expected to rule first on the damages award. A jury trial found in 2002 that RIM, a Canadian company, had infringed on U.S. patents issued to an NTP founder. NTP is seeking damages and a royalty agreement from RIM, which has fought a delaying action since persuading the U.S. Patent and Trademark Office to reexamine the patents.

At the same time, RIM posted a brief statement on its Web site that it has received a copy on Friday of yet another final ruling from the Patent Office, called a Final Office Action, that rejects all the claims associated with the third, and according to RIM, final NTP patent. Earlier last week, the Patent Office had issued another final action on another NTP patent. NTP can appeal these actions to a Patent Office appeals board, and if unable to overturn them there, take the appeal to federal courts.

Following the hearing, RIM Co-Chief Executive Jim Balsillie was defiant in an interview with CNBC, according to Canadian newspaper The Globe and Mail.

“Fundamentally for Research In Motion, settlement has never been an option,” Balsillie was quoted. “Until they [NTP] change their tactics, it remains not an option. So we have to plan our life understanding that we go ahead with the workaround [software], that we incur the cost of the workaround. It’s far less than any settlement cost.”

RIM recently announced a few sketchy details of new software, dubbed the workaround, that the company says will allow U.S. customers to continue using the service, without using the technology covered by the NTP patents.

Yesterday, on the eve of the hearing, NTP issued a press release charging that RIM was guilty of “numerous mischaracterizations” about the validity of the NTP patents. NTP argues that the courts have repeatedly upheld the validity of the patents, either by verdict and ruling or by declining to review or overturn lower court findings. NTP also asserts that the current review by the Patent Office is part of a lengthy “re-examination process” that includes both internal appeals and federal court appeals.

But more inflammatory is NTP’s assertion in the release that RIM used “lobbyists and political connections to exert political influence to have the [US]PTO reexamine NTP’s patents.”

NTP charged that RIM has used “money, power and political influence” to “inappropriately influence the U.S. Patent Office process. The NTP statement says that government documents, which it obtained under a Freedom of Information Act request, “indicate an attempt to subvert the U.S. intellectual property system.”

The company says the documents, which have not been made available publicly, reveal that there were previously undisclosed communications between RIM’s lobbyists and the Patent Office. One of the lobbyists, NTP says, is former PTO official David Stewart. The statement also says the Canadian embassy “sought to find a means” for the Canadian government to “exert pressure” on the Patent Office. RIM is headquartered in Canada.

NTP also says that documents reveal that, after losing its appeal in the U.S. Circuit Court of Appeals, RIM had undisclosed meeting with Patent Office officials even though the office’s regulations “expressly forbid such meetings.” The statement asserts that requesting a patent reexamination after losing a jury verdict is “plainly prohibited” by U.S. law, namely the U.S. Patent Act, section 317 in Title 35 of the United States Code.

A Network World request to NTP’s PR agency for copies of these documents was ignored.