RIM Shares Fall on Blackberry Patent Ruling

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Research in Motion (RIM), the company behind the popular Blackberry wireless e-mail device, saw its stock price fall 5 percent Wednesday after a judge tossed out a settlement in a long-running patent dispute. A small Virginia-based company is suing RIM over the technology behind the Blackberry, and the federal judge in Virginia may soon rule on whether to shut down the Blackberry service altogether.

ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, host:

And I'm Melissa Block.

The company behind the ubiquitous BlackBerry wireless e-mail devices took a hit today on Wall Street. Stock in the company Research In Motion tumbled after a ruling by a federal judge in Virginia. The judge ruled against R-I-M, or RIM (pronounced rim), in a long-running patent dispute with a tiny company called NTP. The decision revives the possibility that BlackBerry service could be shut down in the US. NPR's Jim Zarroli is following the story.

And, Jim, tell us first about the dispute that led to today's ruling.

JIM ZARROLI reporting:

Well, this is just simply a very bitter patent dispute. Research In Motion is the company that makes BlackBerrys; been very successful with them. A few years ago, the company was sued by a little Virginia-based company called NTP; it was started by a Chicago engineer who died last year. NTP claimed that Research In Motion infringed on its patents for wireless devices and in 2001, it sued the company in federal court.

BLOCK: And what is NTP trying to get from Research In Motion?

ZARROLI: Well, it asked for an injunction that would basically prevent Research In Motion from operating its BlackBerry service in the US market. Now NTP has always said that it's willing to negotiate with Research In Motion, but Research In Motion didn't want to negotiate with it. So there was a court trial in 2002, and a jury basically ruled in NTP's favor; it said Research In Motion had infringed on its patents.

BLOCK: And today, another ruling, this time from a federal judge in Virginia. What did he say?

ZARROLI: Well, earlier this year, after the jury ruled against Research In Motion, the two companies reached a preliminary settlement. It would have meant hundreds of millions of dollars for NTP, but they couldn't work out the final details and NTP came back to court, saying it wanted to back out of the deal. Neither side has said why things fell apart, but they did. So today, the judge, Judge Spencer, basically said there was no settlement, whi--so that leaves everything back at square one.

BLOCK: And then how do they figure this out? What does the judge or the court do from here?

ZARROLI: Well, the judge has already granted an injunction against the BlackBerry company, which would have meant it couldn't operate in the US market, but it was stayed. Now Research In Motion is saying the judge should continue to stay the injunction because the US Patent Office is reviewing NTP's claims. And if they can just get the judge to delay any action until the claims are heard, you know, they may be able to kind of run ahead of this, this suit. But the judge made clear that he thinks this thing has dragged on too long as it is.

BLOCK: Now we said there's a possibility that Research In Motion will actually have to shut down its BlackBerry service. How real a possibility is that?

ZARROLI: It is possible. I think what's more likely is that the two sides are going to return to the bargaining table. Research In Motion really has its back against the wall at this point. They have to offer something better. For one thing, there are big competitors out there like Motorola and Nokia which are trying to get a part of the wireless e-mail market. They would dearly love to get a piece of BlackBerry's business. So Research In Motion really has to negotiate at this point.

BLOCK: And, Jim, in the interest of full disclosure, I don't have a BlackBerry. Do you use one?

ZARROLI: Oh, yeah. I do, yeah. I have one that is also a telephone, and it's kind of--it's very convenient. You know, Melissa, you can actually use them in the New York City subways right now, at least when you're going through some of the stations.

BLOCK: If you have nothing better to do. Thanks a lot, NPR's Jim Zarroli in New York.

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