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February 09, 2006

RIM Unveils Plan To Keep BlackBerrys Alive (Reuters)

Personal Tech Pipeline

OTTAWA (Reuters) - Research In Motion <RIM.TO> <RIMM.O> on Thursday unveiled a plan that it says will let its addictive BlackBerry e-mail device work even if it loses a patent dispute, and said the workaround will prevent a shutdown of service in the United States.

In an announcement made as the clock ticked to a February 24 court hearing on patent holding company NTP Inc.'s request for an injunction to halt U.S. BlackBerry service, RIM also said it was still willing to negotiate a deal.

The Canadian technology company, whose black, blue or silver device is dubbed "CrackBerry" by many users, said it is has taken a "pragmatic and reasonable" stance in mediation.

But it called NTP's offer to license disputed technology "untenable" and offering only "illusory protection."

The high-stakes legal battle is heating up in advance of the February 24 hearing by U.S. District Judge James Spencer in Richmond, Va.

That could be the final step before Spencer decides whether to impose an injunction granting NTP's request -- potentially affecting more than 3 million subscribers.

The U.S. Justice Department has already argued against a shut-down, saying that NTP had not submitted enough evidence to show that government users could be exempted "without substantial hardship."

RIM's lawyers have said there was "exceptional public interest" in maintaining an uninterrupted service for government and national security officials.

NTP sued RIM for patent infringement in 2002 and won an injunction in 2003 to shut down the U.S. service.

That injunction was stayed pending appeals, and the court has issued a series of rulings since then, moving RIM shares like a yo-yo, depending on whether the rulings looked good or bad for the firm.

The stock climbed 3.4 percent before the bell on Thursday, adding $2.35 to $71.

RIM, which is based in Waterloo, Ontario, said it has developed and tested software workaround designs for all BlackBerry handsets operating in the United States.

"RIM's workaround provides a contingency for our customers and partners and a counterbalance to NTP's threats," said RIM co-chief executive Jim Balsillie.

"This will hopefully lead to more reasonable negotiations, since NTP risks losing all future royalties if the workaround is implemented."

RIM said it has filed applications for a patent for its workaround, part of a software update called BlackBerry Multi-Mode Edition.

The company said it will soon begin shipping handsets with the software update in a dormant mode. It will make the update available at at a later, but as yet unspecified, date.

RIM said the changes would require software updates, but the new system will deliver the same functions and performance.

It said a legal opinion from a patent law and workaround expert said its designs do not infringe on any of the NTP patent claims remaining in the lawsuit.

($1=$1.15 Canadian)

By: Susan Taylor

Copyright 2006 Reuters. Click for Restrictions

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