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Research In Motion Gets Patent Reprieve

The stock gets a spark from an appellate ruling on its dispute with NTP.

Research In Motion's


stock got a boost Tuesday after an appeals court revised an earlier patent ruling in the company's favor.

The U.S. Court of Appeals for the Federal Circuit threw out a district court ruling that RIM had infringed on six business method patent claims held by privately held NTP. The decision means that instead of facing 11 affirmed claims of infringement -- as was the case after the court's

earlier ruling -- RIM is now facing just seven.

That difference in affirmed infringements could prove important in settlement negotiations or in determining a final judgment award. In June, settlement negotiations between the two companies

broke down. They had previously

announced in March an initial agreement under which RIM would pay NTP $450 million to settle the case.

In recent trading, RIM's stock was up $2.99, or 4.3%, to $73.29.

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A RIM representative didn't immediately return a call seeking comment on the court's ruling.

But Jim Wallace, an attorney with Wiley, Rein & Fielding, which represents NTP, painted the decision as a "big victory" for the patent holding company.

RIM had asked that the entire appeal be reheard en banc; i.e., by the entire appeals court, rather than by a three-judge panel. But Tuesday's decision is a good indicator that the appeals court won't go that route, Wallace said. Nor did the court agree to another request from RIM -- that it stay the appeals process until the lower court could hear arguments on whether a final settlement was in fact agreed upon, as RIM asserts, Wallace noted.

While the court threw out some of the most controversial claims, Wallace dismissed its importance, saying NTP only needs one finding of infringement to push for an injunction that could bar RIM from offering its BlackBerry products or services in the U.S. With the case appearing to be heading back to the lower court, NTP plans to press for that injunction, he said.

"We get the right to shut them down," Wallace said.

Indeed, the district court that initially ruled against RIM granted an injunction against the company, but put it on hold, pending the appeal. The appeals court has now overturned that injunction, awaiting the outcome at the district court.

Wallace declined to say if the companies have resumed their settlement talks.

The long-running patent case has been a persistent thorn in RIM's side. Although the wireless email service and device provider has been expanding rapidly in Europe and Asia, the lion's share of its revenue comes from the U.S., meaning that any injunction against it as a result of the NTP matter could prove a major blow.

The court's decision to throw out the business method claims had to do with the fact that part of the BlackBerry service operates via a relay based in Canada. U.S. patents cover only methods that are employed within the U.S., the court ruled.