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On December 14, 2004, the United States Court of Appeals for the Federal Circuit affirmed most of the judgment of a Virginia court, which found that Research-in-Motion's (RIM's) system of delivering e-mail to the popular Blackberry® wireless handheld devices infringed claims of five different patents owned by NTP, Inc.

After construing a remarkable 31 claim terms, United States District Judge James Spencer granted partial summary judgment of infringement of two claims. A jury thereafter found infringement of fourteen more claims. The trial court awarded $53 million in damages, which included a reasonable royalty, attorneys' fees, and enhanced damages for willful infringement. Perhaps more importantly, the trial court entered a permanent injunction against practicing the invention incorporating the Blackberry® devices. That injunction was stayed pending appeal.

On appeal, RIM challenged the trial court's construction of 6 of the 31 disputed claim terms. The Federal Circuit only modified the construction of "originating processor"--a term that only appears in some claims of three of the five patents found to be infringed. The appeals court then remanded the case, giving the trial court an opportunity to determine what, if any, prejudice resulted from the erroneous construction of the one claim term. Since that term does not appear in claims found to infringe in three of the five asserted patents, it is unlikely that the entire infringement verdict will be set aside. It is more likely that the trial court will take a renewed look at the amount of damages. The finding of willful infringement could also be affected. If any of the jury verdict survives, the injunction should survive.

While the Federal Circuit's claim construction analysis was routine, there was a legal dispute regarding whether RIM escaped infringement because part of its system for relaying e-mails between wireless handheld devices and a user's computer is located in Canada. Specifically, RIM argued that United States patent laws require that all steps in a method claim take place in the United States to be an infringing activity. The appeals court disagreed, holding that "when two domestic users communicate via their BlackBerry devices, their use of the BlackBerry system occurs 'within the United States,' regardless of whether the messages exchanged between them may be transmitted outside of the United States at some point along their wireless journey."

Because of their popularity, users of Blackberry® devices have followed this case closely. For example, Blackberry® use by the federal government accounts for 7 percent of RIM's revenue. Following the September 11, 2001 attacks, Congress invested $6 million on 3000 devices for members of Congress and their staffs. When the trial court judge entered a permanent injunction against the use of Blackberry® devices, Chief Administrative Officer James Eagan III of the U.S. House of Representatives complained that taking away the Blackberry® handhelds from members of Congress "could jeopardize the public service, particularly in the event of an emergency."