Blockbuster patent battle comes to a head today

In the patent case of the century, the day of the reckoning is today — Friday, February 24. The U.S. Patent and Trademark Office (USPTO) has issued a final rejection of one of five patents at the core of the court case and is expected to invalidate all of them. Text

Depending on what a U.S. court decides, it could be a black Friday for either BlackBerry vendor, Waterloo, Ont.-based Research in Motion Ltd. (RIM), or NTP Inc., in Arlington, Va. – the two contenders in what has morphed into a blockbuster legal battle.

About two years ago RIM lost a patent infringement lawsuit in a U.S. court brought by NTP Inc. The court awarded NTP damages amounting to US$53.7 million and issued an injunction that would shut down the operation of the BlackBerry network in the U.S.

RIM got a stay of execution for the injunction, which NTP is seeking to have reimposed today.

NTP wants royalties from RIM for the BlackBerry service. “We have said that we are more than willing to license RIM on a reasonable royalty-paid-up basis,” said Jim Wallace, a lawyer with Wiley Rein & Fielding LLP in Washington and lead trial counsel for NTP. “RIM has the keys to its own jail.”

RIM, however, disputes NTP’s patent claims and wants the earlier injunction to be set aside.

Today’s court proceedings could have huge ramifications.

A decision in favour of NTP could shut down RIM’s BlackBerry network and service to four million wireless e-mail subscribers. (Industry insiders, however, argue an actual shutdown is highly unlikely. They predict that if the case clearly tilts in favour of NTP, RIM will either settle at the last minute or introduce technology to work around NTP’s patents).

On the other hand, a win for RIM would avert the impending shutdown of its BlackBerry service and buy the company time to negotiate a settlement with NTP.

As it stands, it does seem that RIM has some strong arguments in its favour:

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