The tenuous agreement between embittered combatants Research In Motion Ltd. and NTP Inc. appears to have fallen apart-RIM last week asked a U.S. district court to enforce its $450 million settlement with the patent-holding company.
“NTP refuses to honor its obligations under the term sheet and finalize the definitive documents,” RIM said in a statement. “As a result, an impasse has been reached with respect to the settlement.”
RIM said it asked the U.S. Court of Appeals for the Federal Circuit to stay its pending appeal on the case and send the issue back to the U.S. District Court for the Eastern District of Virginia. RIM said it will ask the district court to enforce the terms of the settlement, under which RIM would pay NTP $450 million to continue its BlackBerry business without worry from NTP’s patents.
RIM said if the case does go back to the district court, it expects NTP to ask for an injunction on BlackBerry sales in the United States. NTP opposed RIM’s motion in a court filing.
“While RIM maintains that an injunction is inappropriate given the facts of the case and recent doubts raised as to the validity of the patents in question, it will ultimately be up to the court to decide these matters, and there can be no assurance of a favorable outcome of any litigation,” RIM said in a statement.
Investors appeared disappointed with RIM’s continued legal troubles-the company’s stock dropped more than 3 percent following the news to about $74.78 per share.
RIM and NTP signed a tentative pact in March to end their three-year-long patent infringement battle, an agreement they promised to finalize. However, the companies appear to have differing interpretations of the initial agreement. In its response to RIM’s motion, NTP said the companies “interpreted the vague term sheet in entirely different manners regarding virtually every significant provision.” Specifically, NTP said the companies differ on the scope of the license grant and RIM’s ability to sublicense NTP’s patents.
Jim Balsillie, RIM’s co-chief executive officer, described the terms of the initial agreement as “clear and unambiguous” and “explicit and clear.” He said the agreement explicitly freed RIM from NTP’s patents and would allow it to continue with its business plan.
In a separate issue, Balsillie said the U.S. Patent and Trademark Office has rejected two of the five patents that form the basis for NTP’s case. However, Balsillie said that due to current patent law, the PTO’s patent re-examination will not affect RIM’s current court case. Thus, RIM intends to stick to its settlement.
“When we commit to agreements and sign them, we live up to them,” he said during a conference call with investors.
Finally, Balsillie added yet another layer of complication to the issue. He said RIM has developed a version of its BlackBerry offering that does not infringe on NTP’s patents.
“Should RIM not be successful in its enforcement proceedings, there is also the option for RIM to implement a modified BlackBerry solution that works around the NTP claim construction,” he said without offering details.
