Tuesday, June 14, 2005

BLACKBERRY/NTP PATENT DEAL BEGINS TO UNRAVEL: After two-and-a-half years battling over the patents covering aspects of BlackBerry handhelds, Toronto-based Research in Motion Ltd., which makes BlackBerries, agreed to a $450 settlement in March with NTP Inc.

Now, it appears the two companies can't agree that the settlement would cover all future payment obligations to NTP for Research in Motion. Last week, Research in Motion said NTP refused to honor its obligations and complete final documents for the settlement.

In response, NTP is now taking the position that the settlement is off. In a brief filed with the U.S. Court of Appeals for the Federal Circuit, NTP claimed that during talks to finalize the settlement, "It very quickly became evident that the parties had interpreted the vague term sheet in entirely different manners regarding virtually every significant provision."

The term sheet is confidential, but NTP said royalty payments were one sticking point.

If the two companies can't agree that Research in Motion's payment covers royalties, then wireless carriers could be on the hook for future payments to NTP.

In the meantime, the U.S. Patent Office continues to question the validity of two of NTP's five patents in the dispute. If the court grants RIM's request to stay pending the reexamination RIM can possibly skate free from the deal (maybe this was the plan all along?). If that is the case, this would be one of the most significant examples of reexamination saving the day for a defendant (let's not forget Eolas!).

Furthermore, Research in Motion said on a call with investors last week that it could modify the design of its products to work around NTP's patent. However, this could likely spark another series of lawsuits from NTP . . .

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