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January 18, 2006

RIM says BlackBerry service is critical to US economy

Research in Motion Ltd said if the US legal system shuts down local service of its wireless BlackBerry device it would hurt businesses and threaten the country's security.

By CBR Staff Writer

In court papers filed yesterday, RIM said that because its US BlackBerry service was critical to the country a US court should not silence the service, which is being proposed NTP Inc. The case follows an appeals court last year upholding a ruling that RIM’s devices allegedly infringed patents owned by NTP Inc.

NTP, a patent house based in Arlington, Virginia, again asked the US District Court handling the case for a permanent injunction, in its own court papers also filed yesterday. NTP suggested BlackBerry users be given 30 days to switch to another service and noted that there were many alternate devices currently on the US market.

RIM must simply turn those accounts off in the same fashion as when a customer fails to pay its bill, NTP said.

RIM rivals include Good Technology, Motorola, Nokia, Palm and Seven Networks.

However, the filing from Waterloo, Ontario-based RIM said there was exceptional public interest in keeping its service running and warned that errors would result government and emergency workers were exempt from an injunction (as NTP had previously suggested).

It would be extraordinarily impractical, if not impossible, to devise and administer an injunction that would protect government and private sector BlackBerry users who would be, or should be, excluded from an injunction, RIM said.

A shutdown would affect about 2 million US customers, including Wall Street and other companies, as well as emergency and disaster planning workers, RIM said. The federal government may be the single largest BlackBerry user, said the company.

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RIM also revealed new details about its back-up software workaround, which RIM has said does not involve technology being disputed by NTP and could be used in the event of an injunction.

In the court papers, RIM said the workaround might require a level of effort by its users that some may leave. The software would have to be loaded onto servers, as well as BlackBerries, which could mean problems and delays, RIM said.

Also, BlackBerry users outside the US might have to install the workaround when they travel to the US.

However, late last month, RIM chief executive Jim Balsillie had implied on an earnings conference call that an initial workaround would not affect users’ experience. Balsillie had said, We are very close to making detailed information, which will provide the specifics of the workaround solution.

At the time, he said RIM had various gradations of workarounds that it could employ if NTP tried to also take action against the initial workaround. Some of these alternative workarounds may affect users’ experience, he previously said.

Hearings for the trial have not yet been scheduled, but an injunction against BlackBerry service in the US may happen in the first quarter — or NTP and RIM may reach a settlement. Balsillie said in December that the two companies were negotiating a potential settlement through a mediator. But some analysts have pegged a settlement figure as high as $1bn.

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