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New BlackBerry Design Aims to Avoid Infringing Patents

November 17, 2005|From Bloomberg News

Facing a patent lawsuit that may halt U.S. sales of BlackBerry e-mail pagers, Research in Motion Ltd. said it had finished a new design that would keep the systems running if the company lost the case.

The so-called workaround, an alternative technology designed not to infringe patents held by NTP Inc., is done and being tested, co-Chief Executive James Balsillie said Wednesday at a UBS conference in New York.

"It's a software upgrade that we are very, very comfortable with," Balsillie said. "We did focus groups."

The design may help Research in Motion keep operating in the U.S., which accounts for almost 70% of sales. A deal between the company and closely held NTP fell apart in June, and U.S. District Judge James Spencer in Richmond, Va., is considering whether that agreement is still enforceable. If not, he would hold hearings on whether to shut down service.

Research in Motion shares fell $2.82 to $64.68. They have dropped 22% this year.

NTP lawyer James Wallace of Wiley Rein & Fielding in Washington says his firm will examine any alteration to see whether it does avoid NTP's patented technology.

"It may be so obvious a workaround, we say, 'Congratulations, Jim. We agree.' I don't think that's going to happen," Wallace said.

If NTP believes that the changes still infringe the patents, it could go to the judge and ask that Research in Motion be held in contempt, Wallace said. A contempt citation by NTP could lead to a hearing with testimony on the changes.

"It could be practically another trial," said patent lawyer John Hutchins of Kenyon & Kenyon in Washington, who specializes in litigation. "The judge could rule that the new model number is in effect the same as the other ones in the injunction."

Patent lawyer John Dragseth of Fish & Richardson in Minneapolis, who has been following the case, said it was unclear whether any software changes would be enough to avoid the NTP patents.

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