In a case that could pose significant complications for school leaders and other users of the popular BlackBerry wireless eMail device, the U.S. Supreme Court yesterday refused to hear an appeal from the device’s maker in a long-running patent dispute.
The high court’s refusal to hear Canada-based Research In Motion Ltd.’s (RIM’s) appeal means that a trial judge in Richmond, Va., could impose an injunction against the company and block BlackBerry use among owners of the device the United States, including administrators, teachers, and students in many schools and districts.
The justices had been asked to decide on whether U.S. patent law is technologically out of date in the age of the internet and the global marketplace. The court’s refusal to hear the BlackBerry lawsuit was disappointing to those who sought clarification on an increasingly thorny aspect of law–namely, patent claims, in which excessive litigation threatens innovation and ultimately hurts consumers (see story: ‘Submarine patents’ menace innovation).
The court’s decision not to rule also could have considerable implications for the more than 3.3 million people who subscribe to BlackBerry’s services in the United States.
Though RIM does not break down its sales figures by industry, BlackBerry devices have been cropping up in schools with increasingly frequency in recent years.
In 2002, the Miami Dade County Public Schools in Florida, reportedly the nation’s fourth largest K-12 school system, purchased 150 of the devices for administrators to communicate with one another in the event of an emergency.
Joel Klein, chancellor of the New York City Public Schools, has used his BlackBerry device to write personal responses to potential fundraisers and donors across the district, according to published reports. And schools such as the University of Maryland, College Park, and American University in Washington, D.C., also have experimented with the technology, using the handheld devices to bolster communication among students, teachers, and mentors in undergraduate business programs, for example.
But experts following the case say these and other initiatives could be in jeopardy, given the most recent developments.
At issue is how U.S. law applies to technology that is used in a foreign country and allegedly infringes on the intellectual property rights of a patent-holder in the United States.
The justices were asked to decide whether RIM can be held liable for patent infringement when its main relay station for eMail and data transmission is located in Waterloo, Ontario, outside U.S. borders.
RIM was challenging a ruling by a federal appeals court that found the company had infringed on the patents held by NTP Inc., a tiny northern Virginia patent-holding firm, because RIM’s customers use the BlackBerry inside U.S. borders. The panel said it did not matter where the relay station is located.
Attorney Kevin Anderson, who represents NTP, said the firm is pleased with the court’s action. “We think the Supreme Court’s rejection of RIM’s position makes it clear that RIM should stop defying the U.S. legal system,” he said.
RIM sought to play down the significance of the court’s rejection. “RIM has consistently acknowledged that Supreme Court review is granted in only a small percentage of cases, and we were not banking on Supreme Court review,” said Mark Guibert, RIM’s vice president for corporate marketing. “RIM’s legal arguments for the District Court remain strong, and our software workaround designs remain a solid contingency.”
Since its introduction in 1999, the BlackBerry has revolutionized electronic communication, allowing educators and others to stay in constant eMail contact with their offices, students, and staff members while away from their desktop computers. It has proved especially handy for executive educators, because it has allowed busy school district administrators to keep in contact with each other while moving from building to building.
The BlackBerry almost instantaneously transmits data through radio-frequency technology that Thomas Campana Jr., an engineer, says he developed in 1990, long before the internet became an integral part of American life.
The dispute has resonated not only with BlackBerry-using educators who worry that the lifeline to their offices could be severed. The U.S. and Canadian governments also are concerned, as is Intel Corp., the world’s largest semiconductor manufacturer.
U.S. officials worry about the loss of BlackBerry use for law enforcement and health workers in a crisis, while the Canadian government is concerned that research and development in other industries will be stifled if RIM loses on all fronts.
In a filing with the Supreme Court, Intel’s lawyers said the company is torn. As an investor of billions of dollars into research and development, the company is among the nation’s leaders in obtaining patents and wants to protect itself against infringement. At the same time, Intel also is frequently accused of infringement and wants clearer rules that protect it from small patent-holding companies that have little infrastructure and produce no products.
Attorney Herbert L. Fenster, who represents RIM, said the company is fighting the injunction. But he said an injunction would not end BlackBerry use among at least 1 million of its 3 million users in the United States.
Fenster said he believes federal law prohibits U.S. District Judge James R. Spencer from cutting off BlackBerry service to federal, state and local government users and others who rely on the devices to communicate during a public emergency. Whether this exception would apply to public-school employees was unclear at press time.
Spencer has set a Feb. 1 deadline for filings on the injunction issue.
The legal fight began in 2001, when NTP sued RIM for infringement. The next year, a jury in Richmond decided that RIM had infringed on patents held by NTP, awarding the company 5.7 percent of U.S. BlackBerry sales. Spencer later increased that rate to 8.55 percent. At last count, the tally of damages and fees had exceeded $200 million, and it continues to grow.
In a court filing last week, NTP said it was willing to resolve the matter if RIM were to pay it the original 5.7 percent royalty fee, Anderson said.
Last year, attempts to resolve the case fell apart when Spencer disapproved a settlement in which RIM would have paid $450 million to NTP.
The case is RIM v. NTP, 05-763.
Research In Motion Ltd.
BlackBerry product web site
‘Submarine patents’ menace innovation