Judge in RIM Case Is Likely To Ignore the Outside Issues
By MARK HEINZL and STUART WEINBERG
Staff Reporters of THE WALL STREET JOURNAL
December 8, 2005; Page B8
Email to U.S. BlackBerry customers: Judgment day is looming.
The fate of the popular email device is in the hands of an impatient and stern decision maker who doesn't tip his hand before making key rulings. His court operates in the hurry-up tradition of Virginia's Eastern District.
U.S. District Judge James R. Spencer, 56, is a precedent breaker. A former civil rights worker and Legal Aid Society attorney, he was appointed by President Ronald Reagan in 1986 as Virginia's first African-American federal judge. He is also an ordained Baptist minister.
His demonstrated irritation with RIM's attempts to thwart a patent infringement suit filed by NTP Inc., a Virginia patent holder, has some observers fearing a service-halt when he next takes up the case in the coming weeks. Of course, RIM could yet agree to a settlement with NTP. The two had a preliminary agreement fall apart earlier this year.
A RIM executive said yesterday that the companies have held talks in recent days. "RIM and NTP had been communicating with each other through the court-appointed mediator," said Mark Guibert, RIM's vice president of corporate marketing, who declined to provide details. "RIM expects to continue communications," he said.
This week, technology consulting firm Gartner Inc. recommended customers hold off BlackBerry investments. A promised technology "workaround" that RIM says will bypass NTP's patents is "problematical" and RIM's "history in the courts does not inspire confidence," Mr. Gartner said.
Judge Spencer is a "no-nonsense judge" who likely won't put much weight on the "collateral issues" that RIM is presenting, agrees Robert Redmond, a Richmond lawyer who has argued before the judge. Those issues include recent preliminary rejections of NTP's wireless email patents by the U.S. Patent and Trademark Office, and a move by the Supreme Court to review patent case law.
Mr. Redmond recalls a case in 2001 when Judge Spencer found Mead Johnson had made false claims in literature sent to doctors promoting its infant formula over one made by PBM Products. When Mead failed to stop handing out pamphlets, Judge Spencer "issued an order on an expedited basis" to force Mead to stop, says Mr. Redmond.
Judge Spencer has expressed annoyance with RIM's efforts to postpone a ruling on halting sales of the service. "I have spent enough of my time and life involved with NTP and RIM," he said last month, promising to ''move swiftly" on the case. He has also let the companies know that he won't be swayed by factors outside the law.
RIM and NTP are expected to present their arguments in the coming weeks about whether the infringement calls for an order to shut down BlackBerry sales and email service in the U.S.
The stakes are high. RIM has more than four million BlackBerry subscribers, mostly in the U.S. Investors have bid up RIM's market capitalization to about $11.7 billion, on the expectation that many millions more subscribers will sign up in the coming years.
NTP says case law calls for a BlackBerry ban, and it wants RIM to pay NTP likely in the hundreds of millions of dollars to settle the case to avoid a BlackBerry shutdown. RIM says a ban isn't appropriate, given the preliminary patent office decision and the public consequences of shutting down its service.
Even with a ban, RIM says it will keep BlackBerries running with newly developed "workaround" technology that bypasses NTP's patents. "We expect our customers will be taking advantage of that" if necessary, says a spokesman for Cingular Wireless, one of the biggest BlackBerry service providers in the U.S. He declined to say if Cingular has tested RIM's workaround technology.
RIM officials decline to discuss details of the workaround or the company's legal strategy. NTP says it will challenge in court any workaround RIM proposes to use.
Judge Spencer also has said he's not going to hold up court proceedings for further patent-office rulings. What's more, NTP recently sought to add more than 32,000 claims to its patents, but backed off most.
If the judge calls for a service halt, RIM could immediately appeal any ban to the appeals court, which may be more inclined to postpone the ban. But the appeals court would have to side with RIM instantly, since observers say RIM can't afford even a brief BlackBerry shutdown.
Some lawyers say RIM's strategy amounts to a dangerous gamble. RIM is playing "Russian roulette" with its customers, says patent lawyer Robert Greene Sterne. |
