Judge delays decision on BlackBerry cutoff

updated 5:57 p.m. ET Feb. 24, 2006

RICHMOND, Va. - BlackBerry owners will have to wait longer to learn the fate of their wireless e-mail devices: A federal judge ended a hearing Friday without making a ruling on an injunction request.

Shares of BlackBerry’s maker, Research In Motion Ltd. of Waterloo, Ontario, got a lift in afternoon trading following the court news as well as the second favorable decision this week from the U.S. patent office.

NTP Inc., a small patent-holding firm that successfully sued RIM for patent infringement, asked U.S. District Judge James R. Spencer to impose an injunction on the service with a 30-day grace period for the parties to work out the details.

The Arlington company also recommended that the judge immediately enjoin sales of new BlackBerry devices and award it an initial $126 million in damages. RIM has deposited at least $250 million in escrow, and NTP says that pot of money should be reserved just in case newer BlackBerry models infringe on its patents.

“This is a self-inflicted situation,” said NTP attorney James H. Wallace Jr., who compared RIM to a squatter who continued to live rent-free. “It’s just time to pay up.”

Henry C. Bunsow, a RIM attorney, said an injunction won’t be in the public’s best interests. And the process of excluding government and emergency employees from any ban would prove difficult and problematic, he said.

“It will take a lot of time,” Bunsow said. “It will take a lot of effort.”

Bunsow also pointed to a number of critical users who would not be exempted, including government contractors, energy companies and financial institutions.

Although analysts say an actual BlackBerry blackout is unlikely, the uncertainties in this case have rattled everyone from hospital administrators to the Justice Department. There are more than 3 million BlackBerry users in the United States, many of whom rely on the devices for daily communications.

Not surprisingly, Spencer’s courtroom was packed with attorneys, reporters and others interested in the case. More than 50 people had lined up outside the courthouse before doors opened.

CNBC VIDEO RIM response Research In Motion CEO Jim Balsillie reacts to Friday's hearing. CNBC

After the hearing, RIM co-CEO James Balsillie provided assurances that BlackBerry owners would not see their screens go dark. The company has said it has developed software that would work around NTP’s patents, though analysts have raised concerns because few details have been released.

Balsillie also suggested a last-minute settlement was possible.

“I’m not rejecting anything,” he said outside the courthouse.

But Spencer might not wait. Though he provided no timetable, the judge indicated he would rule as soon as possible, noting that a jury already has heard the case and determined that RIM had violated NTP’s patents.

“The case should have been settled, but it hasn’t, so I have to deal with it,” Spencer said at the end of the hearing.

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