Bye-Bye BlackBerry? Patent Problems with Patent Litigation
Bye-Bye BlackBerry? Patent Problems with Patent Litigation

JURIST Guest Columnist Carl Tobias of the University of Richmond School of Law says that regardless of the ruling in the wake of the much-anticipated BlackBerry injunction hearing, critical questions remain about the patent litigation process that may yet require Congressional intervention…

Tomorrow, the world will be watching a federal courtroom in Richmond, Virginia. There, Judge James R. Spencer may provide a final resolution of the fiercely-contested, lengthy dispute between NTP Inc. and Research in Motion (RIM) that involves ongoing use of BlackBerry, the wireless messaging device which millions employ. If NTP and RIM fail to reach accord and settle their disagreement before this hearing, NTP will request that Judge Spencer impose an injunction and halt BlackBerry usage across the United States.

NTP is a corporation with headquarters located in Northern Virginia that was founded in 1992. NTP sued RIM a half decade ago, asserting that the Canadian company’s renowned device infringes upon NTP’s patent rights.

A jury resolved this patent infringement allegation in a 2002 trial. Jurors found that RIM had infringed on NTP’s patent rights. Judge Spencer then required RIM to pay NTP $54 million in cash and a royalty of 8.5 percent on all BlackBerry sales in the United States. More relevant for BlackBerry owners today was that Judge Spencer imposed an injunction that would halt American service and sale of BlackBerries. However, in 2002, Judge Spencer suspended the injunction, until RIM had exhausted appeals of the adverse determination in his court.

RIM appealed to the U.S. Court of Appeals for the Federal Circuit, which approved many of the district court rulings in December 2004. The next year, the Supreme Court denied RIM’s petition for certiorari, thus returning the dispute to Judge Spencer’s courtroom where he will hear arguments on the injunction.

While RIM pursued these appeals, the litigants engaged in additional machinations. RIM asked the federal Patent and Trademark Office (PTO) to reassess the validity of NTP’s patent rights, and the PTO has preliminarily rejected certain NTP patents and even finally rejected one this week. Nevertheless, final PTO resolution may take years, and Judge Spencer suggested in late 2005 that he is not inclined to wait. RIM and NTP have also attempted to negotiate a settlement, and those efforts intensified last year after the Federal Circuit basically affirmed the district court. In March 2005, the two corporations announced that they had reached accord and that RIM would pay $450 million to resolve the dispute, but the agreement unraveled last summer.

This prolonged litigation has dogged RIM since 2001 and has fueled growing concerns among its four million BlackBerry subscribers, who fear that their service will abruptly end. The litigants will argue before Judge Spencer over whether the long-delayed injunction should now take effect. The United States has intervened and asked for a special exception, should the injunction be imposed. RIM has announced that it has developed a “workaround,” thus allowing its service to continue without reliance on NTP’s patented technology. However, some observers question whether that fix will actually work, and NTP has pledged to challenge this strategy in court. The Supreme Court will soon hear an unrelated appeal which considers when injunctions are proper relief for patent infringement, but that decision will be too late for RIM and its BlackBerry addicts.

The tension is mounting, as the Friday hearing approaches. RIM and NTP are continuing to battle, even as each is uncertain of the judicial resolution. After Judge Spencer hears the arguments, he may rule from the bench or take the matter under advisement. If the judge imposes an injunction, RIM will seek a stay pending appeal, thus starting the process again.

However Judge Spencer decides this seemingly interminable litigation, and despite his careful handling of the complex matter, the judge’s determination will not resolve numerous difficult legal issues. First, is whether juries are the best factfinders to resolve the complicated issues which patent litigation presents. Second is how to reconcile the competing needs of parties to infringement litigation with the needs of the ongoing patent approval process. Third is how to fashion appropriate remedies in patent litigation when injunctions would arguably harm thousands of innocent product owners. Fourth is whether the Federal Circuit is the ideal “final” decisionmaker, as the tribunal with subject matter jurisdiction over patent disputes, and because the Supreme Court hears so few patent appeals. Given the apparently intractable nature of these questions, Congress may be required to legislate.

Carl Tobias is the Williams Professor of Law at the University of Richmond


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