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February 28, 2006
Judge to NTP, RIM: Settle!
U.S. District Judge James Spencer seems to be working as hard as he can to avoid actually having to order Blackberry service shut down. According to Anne Broache and Tom Krazit at CNET, the Judge has taken under advisement the latest brinksmanship by the two parties.
I predicted back in October that NTP's win would not mean shutting down the service and that's held true so far. The service is hugely popular and so shutting it down, even temporarily, would bring a great hue and cry. Apparently banking on this, RIM are asserting that the NTP licensing terms were "far too prohibitive" and asking for a new trial to determine damage award amounts. Presumably they're trying to wear NTP down while subscriber cash continues to flow into their coffers.
The judge has already been public once about his strong desire to see the parties settle, and yet has been willing to go along with business-as-usual. As I understand it, he has a number of options he could invoke short of a full suspension of service, including requiring RIM to provide various financial securities against a future damage amount, above and beyond the 8.5% of quarterly revenue it is required to escrow now. He could also lift his stay of injunction against RIM selling new Blackberry devices.
Finally, the whole court proceeding could be mooted if the USPTO invalidates the patents at issue. So far, only two of the five contested patents have received "final" review, and NTP has at least two levels of appeal past that, should it come out the loser at the patent office. Since NTP will collect damages covering the period of patent validity (i.e. now and until a final-final invalidation) they also have little incentive to go home. From their point of view the longer RIM stalls, the more the meter keeps running. Invalid patents could, of course, not be licensed to other companies (see RIM/NTP Mud Splashes Microsoft) but with USD250 million already in the bank NTP are not going to be hurting no matter how this comes out.
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