RIM has rough day in court

If I were Research in Motion, and was having a bad a month as they were, I think I would just stay in bed. RIM, the ones who make your precious BlackBerry, has suffered what could prove to be a major setback. The company has been embroiled in a patent infringement case with NTP that could ultimately shutdown their U.S. mobile e-mail service. The two companies reached a $450 million settlement in March, but the settlement collapsed in June.

The setback today came in the form of a judge’s decision in a Virginia court. RIM was looking to delay the case. They were also looking to force NTP to accept the $450 million settlement. Judge James Spencer rejected both requests.

“Valid patents would be rendered meaningless if an infringing party were allowed to circumvent the patents’ enforcement by incessantly delaying and prolonging court proceedings, which have already resulted in a finding of infringement,” Spencer said in his ruling from Richmond, VA.

RIM will now attempt to get the Supreme Court to hear the case. In the mean time, RIM faces some real challenges. First, the eventual cost of settling the case could be very high. The company has $1 billion set aside that could be used and a settlement could reach at least that much. Another problem is that the uncertainty hanging over the company and their future in the U.S. could drive customers and potential customers away from them and into the arms of their competitors. Ultimately, many analysts feel that fears are overblown and the companies will settle, but the long-term impact on the company is far from clear.


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