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RIM, NTP escalate war

Judge's admonishment falls on deaf ears

From Tuesday's Globe and Mail

Research In Motion Ltd. and NTP Inc. publicly traded barbs yesterday, giving no indication that they were ready to heed the dire warning of a U.S. federal judge who has told the two to settle their patent fight before he enforces a solution.

NTP struck first. Its new public relations firm fired off a release in the morning entitled "NTP sets the record straight," and alleged that RIM was trying to mislead public opinion. RIM countered several hours later, saying NTP was trying to fool the public and the court by concealing the truth.

The sharp exchange killed some of the market's optimism that a negotiated settlement to the five-year-old fight was imminent. Shares of Waterloo, Ont.-based RIM dipped nearly 3 per cent to $71.91 on the Toronto Stock Exchange.

On Friday, RIM's stock price had jumped more than 6 per cent after U.S. District Court Judge James Spencer postponed a decision to shut down more than three million BlackBerrys across the United States, giving RIM and NTP one last window of opportunity to solve their problems themselves.

The judge scolded the companies for turning what should have been an important business decision into a drawn-out legal fight. He warned the parties that a court imposed solution "will be imperfect," and said "in plain words the case should have been settled."

Yesterday, NTP made it clear it was not close to signing a agreement. "RIM's public assertions that NTP has not proposed a license that protects its carriers is both disingenuous and intentionally misleading," the company said in its release.

"It's time to set the record straight: NTP has offered and continues to offer RIM a licence that fully protects everyone -- RIM's customers, carriers, and partners. Our position on this issue is unambiguous and steadfast. It is mystifying to us how anyone could state otherwise."

RIM co-chief executive officer James Balsillie has said the contested patents will "go in the garbage" at the end of a review under way by U.S. patent authorities. Nevertheless, he said last week that he is still willing to write a cheque to settle the suit, as long as licensing terms don't hamstring RIM's future operations.

"Don't be fooled by NTP's aggressive stance," Mark Guibert, vice-president of corporate marketing for RIM, said in a news release yesterday.

"They are simply trying to convince the court and the public that they're being reasonable. . . . As NTP well knows, the scope of a licence depends on the definitions, and NTP has merely quoted part of a provision with none of the underlying definitions. As with much of NTP's statements, it is only part of the story and is inherently misleading."

As the two sides continued to bicker, Judge Spencer was preparing to set damages in the case and then make a decision on NTP's request for a suspension of BlackBerry service and a ban on sales in the U.S. Lawyers on both sides say a ruling could come within two weeks.

In 2002, a jury in Judge Spencer's court found RIM guilty of infringing on five patents belonging to NTP, a Virginia firm set up to protect the patents of the late inventor Thomas Campana Jr.

RIM later lost on appeal, and failed to persuade the U.S. Supreme Court to review the case. However, separately, the U.S. Patent Office has since overturned many of the patents in dispute, although those decisions can be appealed.

© The Globe and Mail

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