Research In Motion Ltd., facing a patent lawsuit that may halt U.S. sales of its BlackBerry e-mail pagers, said it has finished a new design that would keep the systems running if the company loses the case.
The so-called workaround, an alternative technology designed not to infringe on patents held by NTP Inc., is done and being tested, co-chief executive James Balsillie said Wednesday at a conference in New York.
“It’s a software upgrade that we are very, very comfortable with,” Balsillie said. “We did focus groups.”
The design may help Research In Motion keep operating in the U.S., which accounts for almost 70 percent of its sales. A deal between the company and closely held NTP fell apart in June, and U.S. District Judge James Spencer in Richmond, Va., is considering whether that agreement is still enforceable. If not, he will hold hearings on whether to shut down service.
Research In Motion shares fell $2.82, or 4.2 percent, to $64.68 in Nasdaq Stock Market composite trading. They’ve dropped 22 percent this year.
NTP lawyer James Wallace of Wiley Rein & Fielding in Washington said Wednesday his firm will examine any alterations to determine whether it avoids NTP’s patented technology.
“It may be so obvious a workaround, we say, ‘Congratulations, Jim. We agree.’ I don’t think that’s going to happen,” Wallace said.
If NTP believes the changes still infringe on the patents, it could go to the judge and ask that Research In Motion be held in contempt, Wallace said. A contempt citation could lead to a hearing with testimony on the changes.
“It could be practically another trial,” said patent lawyer John Hutchins of Kenyon & Kenyon in Washington, who specializes in litigation. “The judge could rule that the new model number is in effect the same as the other ones in the injunction.”
The legal battle began in November 2001, when NTP sued Research In Motion alleging patent infringement. A year later, a Richmond jury determined that Research In Motion had infringed NTP’s patents. The Federal Circuit in Washington upheld part of that finding and sent some aspects of the case back to Spencer.
The judge issued an order blocking U.S. BlackBerry sales and service after the jury verdict. The Federal Circuit threw out the order and damage award so they could be altered to reflect the appeals court ruling. Spencer will rule on any change to the damage award at the same time he considers the injunction request.
