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=DJ UPDATE: NTP Filing:Up To RIM To Implement BlackBerry Ban
(Adds comment from RIM in paragraph 11.)
By Stuart Weinberg Of DOW JONES NEWSWIRES
TORONTO (Dow Jones)--The burden of complying with a potential BlackBerry ban in the U.S. rests with Research In Motion Ltd. (RIMM), and the company has the means to comply, NTP Inc. said in a court filing Monday.
Research In Motion, or RIM, also "misled" the government about information available to it to distinguish between government and non-government BlackBerry users, the filing said.
The filing was a response to a U.S. Department of Justice filing submitted Feb. 1 to the U.S. District Court for the Eastern District of Virginia. In that filing, the DOJ said that NTP, a Virginia patent concern, should file a specific plan that details how BlackBerry service to U.S. government users would continue should a ban be implemented. U.S. government users would be exempt if a ban is ordered.
RIM, maker of the BlackBerry email device, faces a possible ban on sales and service of the popular device in the U.S. due to a previous infringement finding against it in its long-running patent dispute with NTP. Judge James Spencer, the Virginia court judge presiding over the case, is scheduled to hear arguments on an injunction on Feb. 24. A decision is expected soon after.
Last week, RIM confirmed it has modified its email-delivery system to work around NTP's patents. Should a ban be ordered, the Waterloo, Ont. firm indicated it would shift users to the new system, called BlackBerry Multi-Mode Edition.
RIM has about 3 million BlackBerry subscribers in the U.S., with as many as one-third covered by a government exemption, according to the DOJ's Feb. 1 filing. The DOJ indicated in that filing that it's not convinced about the feasibility of a ban. It requested a "period of discovery" to assure that authorized BlackBerry users won't be impeded by a ban, as well as an evidentiary hearing to consider how the exemption can be implemented without causing a substantial burden to federal, state and local governments.
In its response, NTP said it "strongly opposes" the DOJ's requests for an evidentiary hearing and period of discovery. Issues related to the implementation of an exemption are both legally and factually "the exclusive province of RIM, the carriers who contract with RIM to provide its infringing service and RIM's affected customers," the filing said.
Filing Says RIM Misled Government
NTP also questioned whether an exemption is still necessary to address the government's concerns, given RIM's workaround announcement last week. "If RIM is to be taken at its word regarding the alleged non-infringing status (of its workaround), there is no threat of service interruption and no reason to impose the delay and burden of extraordinary exception implementation proceedings on NTP and the court," the filing said.
As for the feasibility of a ban, NTP said it believes RIM can comply and that it "misled the government about the information available to RIM to identify exempted" users. For instance, in a Nov. 8, 2005 declaration to the government, RIM used "carefully crafted language" that didn't indicate that RIM maintains a database through which it can readily identify RIM's servers and the customers that use those servers. "RIM took advantage of the government's unfamiliarity with the BlackBerry system and inability to independently assess the accuracy and completeness of RIM's statements," the filing said. "RIM's efforts to mislead the government cannot constitute the basis for another lengthy discovery period."
Even if RIM couldn't distinguish between government and non-government users, the compilation by the government of a white list of authorized users is feasible, the filing said. "The government paid thousands of dollars for each BES (BlackBerry Enterprise Server) and pays an ongoing $40/month from the public's hard-earned tax dollars," the filing said. "It would shock the General Accounting Office to learn that such money is being expended without any mechanism for identifying the expenditures."
DOJ officials had no immediate comment but said they would file a response on Thursday. In an email, RIM Vice-President of Coporate Marketing Mark Guibert said, "RIM intends to file a response to set the record straight since NTP has presented diversionary, misleading, incomplete and inaccurate information."
NTP reiterated its request for an immediate injunction on new BlackBerry sales, noting that RIM is selling more than 7,000 devices each day. RIM and its carrier partners can readily comply with such an order, the filing said.
Should the judge comply with this request, RIM would likely seek an immediate stay of the injunction from the Court of Appeals for the Federal Circuit. It would also presumably put the workaround into effect immediately. NTP is expected to challenge the workaround by filing a motion for contempt of court. If the motion is granted, the leverage would fall heavily in its favor. If it's not, leverage would swing to RIM, assuming the workaround works as advertised.
As the legal dispute unfolds and both sides maneuver for position, the U.S. Patent and Trademark's review of the five disputed NTP patents continues. So far, the PTO has rejected all claims in all five patents in preliminary and secondary reviews. Final rejections are expected shortly, though NTP can appeal, a process that may extend beyond the conclusion of the legal proceedings. RIM is hoping Judge Spencer takes the PTO's review into consideration when deciding on a ban. NTP is betting the judge will ignore the review and order a ban.
What neither side seems inclined to do at this point is settle the case.
Company Web Site: http://www.rim.com -Stuart Weinberg, Dow Jones Newswires; 416-306-2026; [e-mail]
(END) Dow Jones Newswires
02-14-06 1516ET
Copyright (c) 2006 Dow Jones & Company, Inc.