Legal Issues

by Derek Kerton




What Now For Rim - NTP?

After last Friday's delay by Judge Spencer, this Reuters piece looks at what is likely to happen next in the RIM - NTP fiasco. The Reuters article more or less suggests that Spencer will eventually have to rule in favor of NTP and enact the injunction. We agree. While we have, thus far, correctly predicted Spencer would delay his decision, he cannot continue to do so until the USPTO patent appeal process is complete, which could take 4 years. Spencer doesn't want to shut down RIM, but he cannot rule in their favor based on the law at his disposal. So where does that leave us? Here are the parties' strategies: 1) Spencer: get angry and signal to the two companies that he wants a settlement. He may delay one more time, but without a settlement will probably invoke the injunction with a delayed start date. 2) NTP: Easy strategy here, keep fighting for an injunction, and bargain for a better negotiating position. Try to get a large settlement. 3) RIM: This is the wildcard because right now, RIM should be sending signals that it is in a good position - whether it is or not. They should look confident of winning the Patent dispute, confident about the trial, confident about their workaround. But also, RIM should try to look a little crazy...so crazy they would stubbornly let an injunction happen before "settling with extortionists". By sending these kind of extreme signals, RIM will have a stronger position in negotiating a settlement. 4) RIM & NTP: together, I think it likely they will work out a settlement in the next month. It's just the best outcome for both parties, and the judge too.With lower certainty, I would guess the settlement will be the payment of penalties plus a one-time payment of $200-400M. That's just a guess, so don't go trading on it. By the way, check out my discussion of this issue on Bloomberg TV at: http://www.bloomberg.com/apps/news?pid=10000087&sid=a161nN.BTMk0&refer=top_w Look at the Media box on the top right for video clips.

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