Supreme Court Won’t Hear BlackBerry Appeal
The U.S. Supreme Court rejected Research In Motion’s (RIM) appeal Mon., essentially upholding 2 lower-court rulings that could result in a shutdown of RIM’s popular BlackBerry service. The court didn’t agree with RIM’s argument that the lower courts improperly extended U.S. patent law protection to a company that serves its approximately 3 million subscribers from Canada.
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RIM claimed in its appeal that the section of the U.S. Patent Act invoked by Arlington, Va.-based patent holding company NTP Inc., bans use of patents only “within the United States.” Because RIM’s network control center, through which all BlackBerry e-mails pass, is in Canada, it argued the lower courts’ decision would basically “repeal the express territorial limitation.” NTP countered that the patent claim applied only to the BlackBerry system’s use in the U.S., and that RIM has been looking for a “jurisdictional loophole.”
RIM awaits the ruling of a Richmond, Va. district judge on whether to reinstate an injunction against use of BlackBerrys. Judge James Spencer, who late last year refused to certify a $450 million settlement between the parties, may oversee a hearing as early as Feb. to resolve the question.
The Court’s rejection means RIM competitors will be jockeying for position in a sector where RIM’s BlackBerry has been losing market share. Microsoft, Good Technology, Palm and Seven Networks offer devices similar to the BlackBerry. Nokia and Motorola are slated to release similar products this year. A spokeswoman for developer Visto said its push e-mail technology can be found in over 70 devices, including Motorola’s Razr and Palm’s Treo 650.
Those companies may be a threat, but these patents aren’t, said Progress & Freedom Foundation fellow Solveig Singleton. RIM awaits reconsideration by the U.S. Patent & Trademark Office (USTPO), which has preliminarily said the patents involved don’t contain new inventions and should be canceled. “This is a good illustration of what can happen if you don’t have enough control of patent quality,” Singleton said: Though courts have ruled RIM violated patents, the patents probably are invalid. Saying the dispute “could have been avoided by getting prior-art searches right the first time,” she said she expects both sides to be willing to settle. She said RIM would like to settle to make the dispute “go away,” while NTP will see the settlement number drop to “way lower than it would have been a few months ago.”
If NTP loses its patent at USPTO, “they won’t settle,” Stephen Nipper, a patent lawyer and creator of “The Invent Blog,” told Communications Daily. “They'll fight” if that happens, he said, and the battle between NTP and RIM could “theoretically go on for years.” Nipper wouldn’t predict how USPTO will rule, but said its initial statements, based on the patent principles of “novelty” and “obviousness,” look good for RIM. This case gets at a key problem with patenting software, he said: “How software works is especially secret,” with few patent officers who really know how to decipher it, and -- especially with a patent awarded before the Google era -- there was little way to know what prior art was in the virtual world.
The Court’s rejection isn’t surprising because it took up “the eBay case,” said Jason Schultz, staff attorney for the Electronic Frontier Foundation. MercExchange v. eBay is so similar NTP v. RIM the Court’s ruling in one will inevitably bear on the other, he said: Both cases have pending decisions at both the judicial and regulatory level -- eBay and RIM have USTPO decisions to revoke patents -- and both cases involve injunctions against the use of a popular product. In the RIM case, the public interest in staying an injunction -- if the USTPO hasn’t yet ruled on the validity of the patents -- is uniquely high because Congress and Wall Street are so fond of BlackBerrys, Schultz said.
The case also raises “patent abuse” by noninnovating patent holders, Schultz said. EFF last year launched a campaign against “very broad” patents that “threaten people’s ability to speak on the Internet” -- like NTP’s, he said. He agreed the root of disputes like this lies in the patent-approval process. “The people who apply for the patent have no obligation to do any research, period,” he said, and therefore there’s no guarantee a patent isn’t failing to cite prior art.
RIM has said it has developed alternative technology and will maintain the BlackBerry service whether or not it wins the USPTO challenges. “RIM has consistently acknowledged that Supreme Court review is granted in only a small percentage of cases,” said Mark Guibert, RIM vp- corporate mktg., in a statement. “The Patent Office continues its reexaminations with special dispatch, RIM’s legal arguments for the District Court remain strong and our software workaround designs remain a solid contingency.”