BlackBerries Stay Connected; Judge Will Issue Injunction Decision ‘Soon’

The federal judge weighing whether to grant an injunction that could lead to the shutdown or alteration of Research In Motion’s BlackBerry mobile e-mail service ended a hearing Friday without making a ruling.

District Judge James Spencer said he would issue a decision on an injunction “as soon as reasonably possible,” which means BlackBerry users in the U.S. will not face any imminent disruptions in service.

Settlement Still Possible

Spencer also expressed frustration that the case had not yet been settled and urged the two sides to continue to work in that direction.

RIM shares surged higher on the news, trading up as much as 10 percent at one point immediately after the hearing ended. The stock settled back but by mid-afternoon was still trading up more than 8 percent to US$75.49.

The hearing unfolded with NTP laying out its case and asking for at least $126 million in damages from RIM, whose BlackBerry service is used by some 5 million people worldwide, including almost 3 million in the U.S. The damages would come on top of any royalty or license payments, which could take the total cost to RIM as high as $1 billion.

Earlier in the week, Spencer rejected a request by the U.S. Justice Department to hold separate hearings on the impact of a service suspension on government agencies and contractors, who are expected to be exempt from any shutdown requirement in any case.

RIM noted during its presentation before Spencer that the U.S. Patent and Trademark Office continues to deny further review of the patents that NTP holds, which are at the center of the dispute. It was not clear whether the judge would or could take those recent actions — another patent was rejected on Friday — into account, since the patents did hold up during the trial that spurred the injunction hearing.

No Winners?

“The simple truth — the reality of the jury verdict has not changed,” Spencer said from the bench.

Observers will be watching closely for any signs that the hearing or the judge’s admonition will help clear the way for a settlement.

That outcome is still the one viewed as most likely, but the fact that the case is now more than three years old may suggest the two sides have dug into intractable positions.

The judge may consider RIM’s new workaround as a weakening of the argument against an injunction, David A. Roodman, a partner and co-chair of the Intellectual Property Group at the international law firm Bryan Cave LLP, told the E-Commerce Times.

Spencer has “wide latitude” in how he handles the case, Roodman noted, and could “sit on the ruling for as long as he wants” if he thinks the hearing will spur settlement talks.

“Both parties faced risks going into the hearing, and those risks remain now that it’s in the judge’s hands,” Roodman added.

Damage to an Industry?

The stakes in the hearing were extremely high, with an injunction able to alter the “North American mobile landscape,” Info-Tech Research Group analyst Carmi Levy said.

A drawn-out court battle could “drag down mobile e-commerce adoption rates and serve as a disincentive for innovative vendors to enter the space,” Levy said. “The United States and Canada are already losing their competitive edge on the global stage, and an injunction won’t help matters.”

RIM has likely diverted millions of dollars and untold focus and energy into the case that could have been funneled toward innovation, Levy said. A RIM victory could help “take the brakes off” wireless adoption by giving companies confidence in the BlackBerry platform.

Though the workaround may mitigate against the need to take it slow when considering a shutdown, the BlackBerry does play a critical role in the economy today, said Rich Koch, vice president of marketing at Apresta, which makes enterprise software that works on the BlackBerry and other handheld devices.

“Legal decisions have human ramifications,” Koch told the E-Commerce Times. “Obviously the judge is taking the time to carefully weigh the decision and evaluate how this will not only impact the companies, but affect customers as well. The Blackberries represent a very real and vital life line between our large corporate customers and their field operations — utility repair personnel, insurance adjusters, and salespeople — working folks who are constantly conducting business with the head office.”

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