NTP v. Research-in-Motion
Judge Spencer of the Eastern District of Virginia has determined that the $450 million agreement between RIM and NTP that was announced Spring 2005 is not enforceable:
“The court finds the parties do not have a valid and enforceable settlement.”
RIM had asked the court to enforce the settlement that would allow it to end the patent lawsuit and escape from the threat of injunction.
Settlement Agreement? In December 2004, the Federal Circuit released its opinion that pushed against the territorial bounds of patent law. In that opinion, the Court of Appeals for the Federal Circuit (CAFC) found that U.S. patent law covers instances where infringing elements are located abroad — so long as the “control and beneficial use” of the infringing system is within U.S. territory. Soon thereafter, RIM filed a motion for rehearing en banc that is still pending.
The CAFC’s decision, strongly in favor of NTP, paved the way for a March 2005 “settlement” that reportedly included $450 million for NTP. The original settlement announcement was based on a 1/2 page term-sheet reportedly signed by the parties. As would be expected, 50 square inches of paper turned out to create a whole new level of disagreement between the parties who have been working through court mediation to flesh out the agreement.
Settlement Breakdown: In early June 2005, the settlement issue came to a head and the parties staked out their positions on paper before the CAFC. However, that court declined to hear the issue until it being first decided by the district court.
STAY DENIED: In addition, the district court denied RIM’s motion to stay. (decision posted below). In his opinion, Judge Spencer held that:
The Court recognizes the rights of a patent holder whose patents have been infringed. Indeed, the essence of patent protection is that a party legally deemed to have infringed one or more patents shall be liable to the patent holder for damages. Valid patents would be rendered meaningless if an infringing party were allowed to circumvent the patents’ enforcement by incessantly delaying and prolonging court proceedings which have already resulted in a finding of infringement.
The Court intends to comply with the Federal Circuit’s mandate and move this litigation forward so as to bring closure to this case on remand. Derailing these proceedings when a resolution is in sight would be ill-advised at best.
For these reasons, RIM’s Motion for Stay of Proceedings Pending Reexamination of NTP, Inc.’s Patents-in-Suit is hereby DENIED.
The Court’s opinion the filings from the Department of Justice, however, it appears to be clear that the Court’s next step will be to determine the bounds of any injunction.