$147.2M Verdict Against RIM Tossed Due to Mformation's Patent Error

RIM logoPlunging in market share, running out of cash, laying off a third of its employees, and facing grumbling over its ever-slipping next-generation operating system release, there's been precious little good news to report for Waterloo, Ontario smartphone- and tablet-maker Research in Motion.

I. RIM: Victorious

But the company caught a big break this week when federal Judge James Ware of the U.S. District Court for the Northern District of California (San Jose/San Francisco) ruled that RIM did not infringe on Mformation Technologies Inc.'s intellectual property...

U.S. Patent No. 6,970,917


"A... computer program product that provides the capability to manage, control, and reconfigure wireless devices remotely over a wireless network"

That takes RIM off the hook for $147.2M USD in damages -- a royalty of $8 on each of the 18.4 million units RIM sold in 2008, which the jury awarded Mformation during the trial. It also removes the danger of potentially far greater damages for the 2009-present period, which were not covered in the case.

II. How Mformation Sunk Its Own Ship

The interesting thing that is not being widely covered by various reports on the case is why and how RIM won. Incidentally, that happens to be the most intriguing part of the story.

Apparently, RIM won its motion to have the jury verdict vacated on a technicality of sorts -- on the grounds that you can't patent an impossible invention.

While the Mformation patent appeared very solid on the surface and appeared to be indeed uncannily similar to how RIM's network operates, flaws were exposed when RIM's technical experts carefully scoured its language.

RIM, according to a post by the General Patent Corp., discovered that a "fundamental defect" rendered the patent's claims invalid as they were "internally inconsistent and nonsensical because they require the step of delivering commands to be performed both without and with a ‘request’ from the wireless device."

Judge Ware in his ruling agreed with RIM's accusation, stating, "Because the impossible cannot be enabled … when a claim requires a means for accomplishing an unattainable result, the claimed invention must be considered inoperative as claimed and the claim must be held invalid…"

In other words, part of the patent may have been correct, but due to how Mformation worded its claimed invention, a single nonsensical claim of the patent not only invalidated that claim, but also the other seemingly valid claims.

Even if it won, Mformation would be in for a reduced share of damages. RIM had successfully asserted that the damages were invalid "because a key step of those claims is performed by a server located outside the United States."

Because the implementation in question was outside the U.S., it was also outside U.S. Patent Law jurisdiction and not valid for damages.

Mformation even conceded this. It flipped the wording commenting that its claims "are not infringed to the extent that any step of any of [the] method claims occurs only outside the United States." By saying that, it essentially conceded that RIM was right -- some of the potentially infringing servers were outside the U.S., but that it also believed some of the servers were in the U.S., too.

This was not what was presented to the jury, who were told that the infringement occurred inside the U.S.

In other words, thanks to a fine detail RIM would have only had to pay "some" of the damages had the patent been upheld. And thanks to a subtle error in worded it now enjoys an even better outcome pending appeal -- no damages.

That's sweet relief for battered giant, as it's now allowed to conserve its most precious and dwindling of resources -- cash.

Source: DailyTech

Tags: legal action, RIM

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