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Research In Motion (RIM) on Thursday provided an update in the patent litigation between RIM and NTP Inc. RIM has developed and tested software workaround designs for all BlackBerry handsets operating on converged voice/data networks in the United States. Although there is no injunction order in place, and RIM believes it has strong legal and factual arguments opposing an injunction, RIM has developed these software workaround designs as a contingency to allow BlackBerry service to continue should the court implement an injunction in the current litigation involving the NTP patents.
“RIM remains pragmatic and reasonable in its willingness to enter into a settlement that would generously compensate NTP while protecting RIM’s business and partners,” said Jim Balsillie, chairman and co-CEO at Research In Motion. “NTP’s public offer of a so-called ‘reasonable’ license, however, is simply untenable. It comprises illusory protection for RIM and its partners and requires a lump-sum payment for the theoretical life of the patents even though the U.S. Patent Office is expected to nullify them.”
Balsillie added: “RIM’s workaround provides a contingency for our customers and partners and a counterbalance to NTP’s threats. This will hopefully lead to more reasonable negotiations since NTP risks losing all future royalties if the workaround is implemented.”
RIM’s workaround strategy: Workarounds are a legitimate strategy that have been respected by the courts as a means to avoid infringement. In the years leading up to its public launch in 1999, BlackBerry was invented wholly independently of NTP’s patents and comprises a wide spectrum of designs and inventions that are outside the scope of NTP’s patents. There are only nine claims relating to three NTP patents remaining in dispute in this litigation and those claims are only directed to specific implementations of certain aspects of the BlackBerry products and services. As a result, RIM has been able to modify its underlying BlackBerry message delivery system to “work around” the NTP patent claims. Although the development of this modification required substantial R&D effort from RIM and would require software updates in the event of an injunction, RIM has ensured that the industry leading functionality, performance and user experience remains intact.
Multi-Mode Edition software: RIM has incorporated the workaround designs into a software update called BlackBerry Multi-Mode Edition that has been developed and tested as a contingency. RIM has also filed new patent applications with the Patent Office to cover its workaround designs. BlackBerry Multi-Mode Edition is so named because the software is capable of operating in different modes that can be remotely activated by RIM through its Network Operations Center (NOC). In the absence of an injunction, the software and the underlying message delivery system can continue to run in “Standard Mode” (identical to the manner in which the current BlackBerry software and system operate) and the workaround will remain dormant. In the event of an injunction, RIM is able to remotely activate “US Mode” via its NOC and the workaround designs would automatically engage for each handset containing the Multi-Mode Edition software update.
Software availability: RIM has commenced the network certification process required for all software updates and will soon begin to ship the new software latent on new handsets in addition to making the software update generally available at the web site listed below for corporate IT departments and others to download and implement in accordance with their IT procedures. RIM, NTP and the US Department of Justice have all raised issues that would warrant a transition period following a potential injunction order. NTP has proposed a 30-day transition period, but RIM has argued that the transition period should be longer if the court were to grant and implement an injunction.
Web site: RIM will make the software update available at a later date on a special web site: www.blackberry.com/workaround. Additional information on the BlackBerry Multi-Mode Edition software update is already posted on this site and periodic updates will be posted prior to the effective date of any potential injunction order. The software workaround designs remain a contingency plan because the court has not yet ruled on RIM’s argument that the aggregate effort to deploy this software update for millions of users is not warranted under the circumstances. There is no need for any customer action at this point in time.