In Suit, BlackBerry Maker Pleads Canadian

Hmmmmm, novel strategy. We might keep this in mind..... if we had any patent disputes

In Suit, BlackBerry Maker Pleads Canadian:

Having lost a recent patent case in Virginia, Research in Motion, maker of the popular BlackBerry device, has turned to an unusual appeal strategy: We're not based in the United States, so you can't touch us.

More surprisingly, the Canadian government and the Internet service provider EarthLink are now formally supporting that argument.

R.I.M., which has its headquarters in Waterloo, Ontario, has become Canada's technology success story, with a soaring stock price and two million subscribers, most of them in the United States. But hovering over the company is a patent infringement suit brought in 2002 by NTP, a patent-holding company based in Annandale, Va.

Last year, a federal court in Virginia found that R.I.M. had violated about a dozen NTP patents and ordered the company to pay $53.7 million in damages. The court also issued an injunction, later put on hold, blocking BlackBerry sales in the United States. In December, an appeals court struck down the injunction and the verdict. But the appeals court decision also upheld most of the patent infringement counts against R.I.M., sending the dispute back to the lower court.

This month, R.I.M. made an unusual request - it wanted the appeals court to take another look at the company's argument that the limits of the border of the United States mean that NTP's patents simply do not apply to the BlackBerry system.

Unlike copyrights, patents are very territorial: a United States patent cannot be enforced outside the country's borders. R.I.M. is arguing that because its relay server, through which all BlackBerry e-mails pass, sits in R.I.M.'s Canadian hometown, the software is beyond the reach of American patents, despite the fact that over a million BlackBerrys are used in the United States.

“One of the fundamental things about patent laws is that there are territorial limitations to them,” said Henry C. Bunsow, a lawyer representing R.I.M. Since the BlackBerry hand-held units are effectively useless without the relay server in Canada, Mr. Bunsow contends that its entire system does not infringe on NTP's patents.

So far, the courts have shared the view of Donald E. Stout, a co-founder of NTP and the company's legal counsel.

“We don't care if one part of the system is run in Canada,” Mr. Stout said. “The beneficial use of the system is in the United States.”

Mr. Bunsow argued that the nature of the NTP patents makes them impossible to uphold. The NTP patents stem largely from work that Thomas J. Campana Jr. did for Telefind, a now defunct pager company that was able to send a crude form of e-mail to subscribers during the last 1980's and early 1990's. Mr. Campana, who died last year, held about 50 patents and long used Mr. Stout as his intellectual property lawyer.

In the case of the wireless e-mail patents, Mr. Bunsow said they cover the system as a whole rather than individual components.

“They could have parsed the applications,” Mr. Bunsow said. “But it's an entire system patent so that they could capture all the revenues in the system.” As a result, Mr. Bunsow said, if any key part of that system is outside of the United States, the NTP patent does not apply.

At R.I.M.'s request, the Canadian government filed a brief with the appeals court last week supporting the company's call for a hearing on the cross-border issues. Several Canadian officials said that this appeared to be the first time that the government had become involved in a private company's patent dispute.

But André Lemay, a spokesman for Canada's Department of Foreign Affairs and International Trade, rejected suggestions that his government was acting as a favor to a prominent homegrown business. Mr. Lemay said the government was only concerned that the Virginia court might be extending United States law into Canada.

“We're not defending, endorsing or criticizing R.I.M.'s position in this case,” Mr. Lemay said. “We're simply acting to protect the interests of Canadian businesses.”

In a separate filing to the appeals court, EarthLink, one of several companies selling BlackBerry service in the United States, raised similar concerns that the ruling might take American law beyond where it was allowed to go. The company declined to comment on why it filed the brief. Mr. Stout, however, said that EarthLink was one of several BlackBerry vendors that NTP had asked to take out licenses for its patents.

The appeals court is not the only place where the two companies are battling. After a complaint from the Canadian company, the United States Patent and Trademark office is currently reviewing NTP's patents.

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This page contains a single entry by Seth A. published on January 24, 2005 12:47 AM.

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