Updated from 2:24 p.m. EDTThe hits just keep coming for Research In Motion ( RIMM). On Wednesday, the U.S. Supreme Court denied the company's request to delay proceedings in a long-running patent dispute with NTP while RIM put together -- and the high court considered -- an appeal in the case. The decision is only the latest legal setback for RIM, which faces the possibility of being barred from offering its popular BlackBerry service in the U.S. as an outcome of the case. The decision clears the way for a district court to resume consideration of the case. The court, which already found RIM guilty of infringing NTP's patents, will consider whether to re-impose an injunction against the company's BlackBerry service. "This is an important development," said Jim Wallace, an attorney with Wiley Rein Fielding, which represents NTP. But, in a statement, RIM disputed that notion, suggesting that the Supreme Court was simply following normal procedures. The high court may still decide to take up the case, a factor that the district court will have to weigh into its proceedings, RIM said. "While further review by the Supreme Court is generally uncommon, RIM continues to believe this case raises significant national and international issues warranting further appellate review," the company said in the statement. Representatives of RIM did not immediately return calls seeking further comment. The denial of the stay was issued without an explanation from Chief Justice John Roberts. But investors seemed relatively untroubled by the development. In recent trading, RIM shares were off just 7 cents, or less than 1%, to $57.33. Earlier in the session, when news broke that there was a court decision, RIM's stock was off as much as 6.5%. Regardless of the ruling, RIM can still file an appeal with the Supreme Court. However, today's decision, issued by Chief Justice Roberts, is a strong indication that the high court would ultimately decline to hear the appeal or overrule lower court decisions in the case, Wallace said.
The case will now proceed on two tracks, one at the Supreme Court level, should RIM decide to pursue an appeal there, and one at the district court level. The lower court will have the duty of sorting out a disputed settlement between the companies and, should it consider the settlement void, penalties against RIM. In an earlier phase of the case, the district court imposed an injunction against RIM that would have barred it from offering its BlackBerry service, but the court immediately stayed enforcement of that injunction, and the appeals court overturned it. The district court will set the schedule for new proceedings in the case "within the next few weeks," according to RIM and Wallace. The decision Wednesday is the third setback this month for RIM in the case. Foreshadowing Wednesday's ruling by the high court, a federal appeals court last week
rejected RIM's request to delay proceedings in the case until the Supreme Court decided whether to hear RIM's appeal. Earlier in the month, the appeals court denied RIM's request to have the case re-heard by an en-banc panel of 12 judges. Last December, the appeals court largely upheld the district court's finding that RIM had infringed on NTP's patents. NTP, a private patent holding company, owns a series of patents covering wireless email systems. In August, the appeals court narrowed its ruling, throwing out several findings of infringement. Still, the court upheld the finding that RIM infringed on seven NTP patent claims. The companies appeared to have settled the case in March, with RIM agreeing to pay NTP $450 million. But in June, RIM acknowledged that the settlement agreement had fallen apart. RIM claims that the settlement was binding and should be enforced by the courts, but NTP disputes that claim.
In the meantime, the U.S. Patent & Trademark Office has rejected all of NTP's patents on an initial review of its claims. RIM has made much of the patent office's actions, noting that they are based on evidence that wasn't used in the court case. But the relevance of the rejections to the legal dispute is uncertain. NTP has the chance to appeal the rejections and stands a good chance of having at least some of the claims reinstated. And regardless of the outcome there, that patent office's re-examination proceedings are not binding on the courts. The courts can decide independently whether the patent office's actions have any bearing on whether NTP has legitimate patents and whether RIM infringed them. Since the December ruling by the appeals court, RIM's stock price has often mirrored its legal fortunes. The company's shares are off 30% for the year and 45% since peaking with the initially positive reaction to the December ruling.