The long running patent infringement dispute between Research in Motion (RIM), the makers of BlackBerry and NTP Inc has settled for $612.5 million US dollars.
Â NTP argued that RIM infringed its patents to run its popular BlackBerry personal communication devices. The infringement action has now been dismissed and the companies have announced a signed agreement under which RIM has paid NTP $612.5 million, including a license on the disputed patents. It also covers claims that NTP may have had against RIMÂs partners or third party sellers and providers of RIM products and services.
According to reports, RIM was persuaded to settle because of the detrimental effect the disputeÂ was having on sales of the handset. In 2002 a jury awarded NTP around $100 million in damages forÂ the actual patent violation, over $500 million less than the figure eventually awarded. A USÂ Patent and Trademark Office (USPTO) re-examination of the patents involved in the dispute willÂ continue despite the settlement. However, the final result of any examination, which can takeÂ years to complete will have no direct effect on the settlement.
The case has brought to light a fundamental problem with the patent system in the US. OnceÂ patents are issued, the impact of litigation costs on a company often leads to the defendantÂ settling the claim even though their patent is infringed. The debate surrounding patent reformÂ has been ongoing. It is common practice in the US to file for patents on the functions ofÂ software. Critics arguing for patent reform often point to the fact that over 90 per cent of theÂ disputed patents end up being invalidated because of prior art. This indicates a genuine lack ofÂ research into patents.
Legislators are wary of the fact that calls for reform leave pharmaceutical industry unprotected.Â This could lead to the separate treatment of pharmaceutical and software patents. Brad Smith ofÂ Microsoft Corp. commented: ÂOne lasting impact of the case is that it has turned patent litigationÂ from simply a legal issue into a broader business, commercial and even an economic issue.Â
In general, legislation currently requires a judge to immediately issue a permanent injunctionÂ once infringement of a valid patent has been determined. This issue will come before the SupremeÂ Court of March 29th in a case that Mercexchange filed against eBay. The dispute surrounds theÂ patented “buy it now” technology that allows a seller to set a price at which it would be willingÂ to immediately sell the item. If the Court rules in eBay’s favour, this would alleviate some ofÂ the problems in the patent system, granting the company time to have the disputed patentÂ re-examined and possibly invalidated.