In 2000 NTP sent notice of its wireless email patents to a number of companies and offered to license the patents to them. NTP brought a patent-infringement lawsuit against one of the companies, Research In Motion, in the United States District Court for the Eastern District of Virginia. This court is well known for its strict adherence to timetables and deadlines, sometimes referred to as the "rocket docket", and is particularly efficient at trying patent cases.
The jury eventually found that the NTP patents were valid, that RIM had infringed them, that the infringement had been "willful," and that the infringement had cost NTP $33 million in damages (the greater of a reasonable royalty or lost profits). The judge, James R. Spencer, increased the damages to $53 million as a punitive measure because the infringement had been willful. He also instructed RIM to pay NTP's legal fees of $4.5 million and issued an injunction ordering RIM to cease and desist infringing the patents. This would have shut down the BlackBerry systems in the US. RIM appealed all of the findings of the court. The injunction and other remedies were stayed pending the outcome of the appeals.
In March 2005 during the appeals process, RIM and NTP tried to negotiate a settlement of their dispute; the settlement was to be for $450 million. Negotiations broke down due to other issues. On June 10, 2005, the matter returned to the courts. In early November 2005 the US Department of Justice filed a brief requesting that RIM's service be allowed to continue because of the large number of BlackBerry users in the US Federal Government.
In January 2006 the US Supreme Court refused to hear RIM's appeal of the holding of liability for patent infringement, and the matter was returned to a lower court. The prior granted injunction preventing all RIM sales in the US and use of the BlackBerry device might have been enforced by the presiding district court judge had the two parties been unable to reach a settlement.
On February 9, 2006, the US Department of Defense (DOD) filed a brief stating that an injunction shutting down the BlackBerry service while excluding government users was unworkable. The DOD also stated that the BlackBerry was crucial for national security given the large number of government users.
On February 9, 2006, RIM announced that it had developed software workarounds that would not infringe the NTP patents, and would implement those if the injunction was enforced.
On March 3, 2006, after a stern warning from Judge Spencer, RIM and NTP announced that they had settled their dispute. Under the terms of the settlement, RIM has agreed to pay NTP $612.5 million (USD) in a “full and final settlement of all claims.” In a statement, RIM said that “all terms of the agreement have been finalized and the litigation against RIM has been dismissed by a court order this afternoon. The agreement eliminates the need for any further court proceedings or decisions relating to damages or injunctive relief.” The settlement amount is believed low by some analysts, because of the absence of any future royalties on the technology in question.
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