Appealing the Decision

Now the only remaining procedures were the appeal and perhaps settlement. Although there was a chance the PTO might invalidate all the claims (it's happened before), RIM enjoined anyway, because the best it could hope for was a new trial—which might not be granted. And, remember, the judge had held the injunction against RIM in abeyance pending the appeal.

RIM filed its appeal on 29 August 2003, and on 14 December 2004 the Federal Circuit issued its first decision. Two months earlier, Campana had died of cancer, so he would never enjoy the damage award should the Federal Circuit side with NTP—which, indeed, the three judge panel largely did.

RIM moved for a rehearing but also pursued mediated settlement negotiations in front of a magistrate judge under Judge Spencer. In March of 2005, the company boldly announced a settlement whereby RIM would pay NTP $450 million. RIM's stock purportedly jumped $14 a share. NTP, however, declared there was no settlement. In response, RIM asked the Federal Circuit to stay the appeal and to have Judge Spencer decide this latest dispute. In a briefing on that issue, NTP asserted that RIM, once again, was simply attempting to avoid the consequences of infringement. The Federal Circuit refused RIM's request. Ultimately, in November of 2005, Spencer ruled there had been no settlement.

Interestingly, though, the Federal Circuit did agree to a rehearing of its earlier decision and issued a second decision in August of 2005. In that decision lies a fairly complex effect resulting from the confluence of U.S. patents and international law. The problem is that although BlackBerry devices are sold in the United States, RIM and its relay station for sending e-mail wirelessly are both located in Canada. In general, U.S. patents like NTP's do not extend to most activities conducted outside the United States. Moreover, the patents only covered complete systems and methods for wireless e-mail; not the BlackBerry device itself, which is only a component of the system.

NTP had made the problem even more complex by phrasing some of its patent claims as "system" type, covering the various components of a wireless e-mail structure (such as gateway switches and radio frequency transmission networks), while others were of the "method" type. Rather than listing components, method claims list steps associated with running a system, reciting action verbs like "transmitting."

The Federal Circuit held that RIM put the patented system into use in the United States (even though the relay is in Canada), but not the method, since the relay utilization doesn't occur in the States. In the United States, patent infringement takes place when the product in question is imported into, or sold in the country. But what if the invention is a method? How do you import or sell it? Difficult question. When a method is applied outside U.S. borders to make a product that is shipped into the country, there can be patent infringement—but data and information don't really constitute products under U.S. patent laws.

The result was that RIM didn't infringe NTP's six method-type claims but did infringe seven system-type claims. And because of Spencer's incorrect interpretation of system-type claims, the Federal Circuit remanded the case back to him to determine if RIM infringed three other NTP claims of that type.

No bonus points if you guess what RIM did next: it appealed this decision to the United States Supreme Court. That court rarely decides patent cases, though, and even RIM admitted, "review by the Supreme Court is generally uncommon". Once the case came back before Judge Spencer, RIM again moved to stay it. The company asked Spencer to place the litigation on hold since, by this point, the Patent Office had initially rejected some of NTP's claims. RIM asked the Supreme Court for a stay pending that body's decision on whether it would hear the appeal of the Federal Circuit's stand. The Justice Department was on RIM's side here: it asked Spencer to hold off on a final ruling because an injunction against the BlackBerry service could adversely impact public safety. These motions for stays were again denied. And on 23 January 2006, the Supreme Court turned down RIM's appeal.

Many possibilities remain, though: RIM and NTP could settle. Judge Spencer could grant a new trial given the Federal Circuit's remand concerning three of the system-type patent claims, but that's unlikely. The Patent Office could strike down all of NTP's claims and its decision could be upheld after the inevitable appeals. Or if NTP sues someone else, say one of RIM's competitors, that trial could invalidate the patent claims.