The Marketplace Report: Black Day for BlackBerry

The U.S. Supreme Court has refused an appeal in a long-running patent dispute by the makers of the BlackBerry, the popular wireless communications device. A lower court now must decide if Research in Motion — the company that makes the BlackBerry — is guilty of patent infringement. Such a ruling could halt operation of the popular device in the United States. Madeleine Brand talks with Janet Babin of Marketplace.


Back now with DAY TO DAY.

It is so indispensable to it's users, it's known as the CrackBerry. I'm talking about the BlackBerry, that little wireless device that lets you check e-mail on the road. Well, now there's a chance BlackBerry addicts could be forced to do without their fix. The maker of BlackBerry, Research In Motion, suffered a legal setback today. The Supreme Court refused to hear its appeal in a copyright case, sending the matter back to a lower court, which may ban the use of BlackBerries here in the U.S. Janet Babin is here with us from MARKETPLACE to explain.

And Janet, what does it mean legally that the Supreme Court refused to hear the case today?

Ms. JANET BABIN (Host, NPR's MARKETPLACE): Well, it means that the lower court judge is basically still are making the decisions. And that judge, U.S. District Judge James Spencer, could decide, and here's the scary part, he could issue an injunction that would essentially shut down BlackBerry use in sales and service in the U.S., typically that's what happens. If patents are found to infringe, the court issues an injunction.

BRAND: And what's the issue here? Tell us the story.

Ms. BABIN: Okay. Well, the company Research In Motion, or RIM, is based in Canada, and they use a relay system that's patented by NTP, a U.S. company, so all those BlackBerry e-mails that we send to each other first go to this relay center that's in Canada. Now, Boilerplate Patent Law says if you secure a patent in a given country, it's only valid in that country. So, U.S. patents only valid in the U.S., and since the relay system is in Canada, RIM has said, hey, no violation here. But a Federal Appeals Court ruled that RIM's e-mail systems infringe.

So, the legal question many are grappling with in this case is, are patents national in character, or do they have international implications? Or even this larger question of whether U.S. law applies outside of the U.S. borders. I talked with Arti Rai about the case. She's a law professor at Duke University. She says RIM BlackBerry's unusual, because it's gone on since 2001.

PROFESSOR ARTI RAI (Professor of Law, Duke University): I find it really astounding that that case hasn't settled yet, because it would be in everyone's rational best interest to settle, and I suspect it will, but it just hasn't. I guess the settlement was something that was worked out, and then unraveled.

Ms. BABIN: And while that unravelling was taking place, it's estimated the damages and fees have now topped 200 million, and are still growing.

BRAND: So, there's no settlement yet, they haven't come to an agreement, so is there a chance that the judge could just issue this injunction?

Ms. BABIN: Well, the attorney for RIM has said that he believes it would be illegal under federal law for the judge to cut off BlackBerry service to government users, or people who use the BlackBerry in an emergency. But as for the rest of us, it is still possible. Although we heard from Arti Rai, many people still hoping for a settlement. We should know sometime after February 1st.

Coming up on MARKETPLACE, we're breaking down the Ford restructuring plan, and the scariest news is that 30,000 job cuts still might not be enough to save the company.

BRAND: Janet Babin of Public Radio's daily business show, Marketplace. And Marketplace is produced by American Public Media.

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