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Goldman: BlackBerry shutdown not likely
Investment bank outlines possible outcomes in RIM, NTP legal battle.
By Grace Wong, CNNMoney.com staff writer


NEW YORK (CNNMoney.com) - Investment bank Goldman Sachs said in a report that the chances are slim for a systemwide shutdown of the BlackBerry e-mail service.

Goldman analysts evaluated four possible outcomes from the ongoing dispute between BlackBerry maker Research in Motion (RIM) and patent-holding company NTP after the Supreme Court turned down RIM's request to review a major patent infringement ruling against it.

RIM now faces a possible injunction that could disrupt service for its more than 4 million U.S. customers.

But Goldman analysts don't think BlackBerry users will face a blackout. "Because the workaround plan is an option, we think the likelihood that the BlackBerry service is shut down in the U.S. remains extremely low," the report said.

RIM has been preparing a software workaround in case of a shutdown. While the company hasn't publicized details of this plan, it involves using different software to bridge the patent.

RIM could also argue that since BlackBerry service is a key component of many corporate disaster plans, it would be against the public interest to order a blackout of its system, Goldman said in the report.

What could happen?

Goldman analysts also outlined possible outcomes that would not involve an injunction.

  • RIM and NTP could reach a new settlement. Last year, RIM and NTP reached a tentative $450 million settlement, but the deal fell apart. NTP, a holding company that doesn't make its own products, would benefit more from a settlement than from a BlackBerry shutdown.
  • The U.S. Patent Office, which has yet to issue its final rulings on the patents at the center of the dispute, could deny the validity of the patents. NTP is due to respond to the Patent Office's request for information on its patents by the end of February. This could potentially discredit NTP's claims against RIM.
  • RIM could successfully implement its workaround technology plan which avoids infringement of NTP's patents.

The next scheduled major milestone occurs on Feb. 1, when NTP is scheduled to file a request for an injunction, although the judge who will rule on that request has not set a timetable on when to expect that decision.

The patent battle goes back to 2001, when NTP filed a suit against RIM claiming that the BlackBerry infringed on its patents. A jury found in favor of NTP and awarded the company damages.

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A BlackBerry blackout could be costly. Click here for more. Top of page

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