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Hope, Fear Surround BlackBerry Blackout Scare

BlackBerry customers and industry observers remained hopeful, concerned and in the dark Thursday, following a court ruling that could lead to the shutdown of BlackBerry service in the United States.

Research In Motion Ltd. maintains that the company has tested and readied a legal technical workaround just in case the judge goes through with an injunction before the Patent Office makes its ruling.

But the lack of details about the workaround worries some industry observers.

"A lot of clients are very upset and a lot of clients are scared about this," said Phil Redman, an analyst at Gartner Inc. in Stamford, Conn.

"We're excited to hear what the workaround is, but we're afraid it's still going to fall under the injunction."

Some customers remain confident that their service will stay intact because BlackBerry usage is so prevalent.

"Since Congress and other users depend on RIM for workflows that impact national security, I'm convinced that RIM and BlackBerry will survive," said John Halamka, CIO of Harvard Medical School and Caregroup Health Systems in Boston, which supports a total of 800 BlackBerry devices. "If I must, I'd very reluctantly consider a smart phone such as the Samsung."

"I've gotta believe the economics are going to force some resolution," said Jim Whalen, CTO of Boston Properties in Boston, which supports some 130 BlackBerry devices. "I'm concerned, and we've kept abreast of what's going on, but there's just too much at stake here for this not to be resolved in some way. …We don't have a backup plan. If it comes, we'll have to work with Verizon [Wireless] to figure something out."

The major carriers in the United States offer RIM devices and services, but most offer competing solutions, too.

"We do offer other e-mail devices," said Brenda Rainey, a spokesperson for Verizon Wireless in Bedminster, N.J.

In addition to BlackBerry services, Verizon also offers a push e-mail service called VZAccess.

It is based on software from Intellisync Corp., a company recently acquired by Nokia Inc.

Nokia has patent licensing agreements with NTP Inc., the company that sued RIM for patent infringement in 2001.

A worst-case scenario for RIM customers means a potential shutdown of BlackBerry service in the United States.

And while RIM officials insist that they have a workaround solution at the ready, the company has yet to divulge what that workaround is.

U.S. District Judge James Spencer granted an injunction in favor of NTP in 2003, which included a ruling that RIM halt its sales of BlackBerry devices in the United States until NTP's patents run out.

He stayed the ruling, though, pending appeal. Since then, the case has gone through several appeals, and RIM is trying to take the case to the Supreme Court.

In the meantime, the U.S. Patent and Trademark Office has been evaluating the validity of NTP's patents.

While the PTO initially rejected NTP's claims in March, it is now in the process of re-evaluating them.

In fact, the U.S. Patent and Trademark Office late Wednesday issued a rejection of one of the five patents at the center of the dispute. But the action was a "non-final" action that could be appealed.

Spencer officially denied RIM's request to stay an injunction pending the Patent Office's decision. But he has yet to carry through with the injunction. And the waiting game continues.

RIM officials remain confident, pointing out that the Patent Office announced plans last summer to speed up its review processes.

"The PTO's going to shut this down in a couple of months," said Jim Balsillie, chairman and co-CEO of RIM in Waterloo, Canada. "Though NTP can take an appeal to the courts from there, for all intents and purposes, their patents are finished at that point."

Spencer is not so sure.

"The Court is not persuaded that the PTO will issue final actions in RIM's favor 'within the next few months,' as RIM asserts," he wrote in his ruling. "Even in the unlikely event that all final office actions were taken in the next few months, NTP, if not satisfied, could appeal the PTO's findings. Reality and past experience dictate that several years might very well pass from the time when a final office action is issued by the PTO to when the claims are finally and officially 'confirmed' after appeals."

A spokesperson for the patent office declined to give a time frame for a decision, saying only that it is "still pending."

NTP has no intention of offering services itself, although RIM competitors including Good Technology Inc. and Nokia Inc. recently have licensed NTP patents.

NTP's legal team insists it's just looking for a decent financial settlement.

"We hope that this [recent ruling] brings them back to the negotiating table," said Kevin Anderson, an attorney with Wiley Rein & Fielding of Washington, one of the law firms that represent NTP. "We've always been willing to give them a deal that addresses their business needs. RIM has the keys to their own jail. And if someone's upset about losing their BlackBerry service, they should contact RIM, not us."

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