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Last Updated: Wednesday, 30 November 2005, 19:37 GMT
Court blow for Blackberry maker
RIM may be forced to halt sales of the Blackberry in the US
The maker of the Blackberry mobile device has been hit by a court ruling which could affect its US operations.

A federal judge has ruled that a $450m settlement between patent holding US firm NTP Software and Blackberry maker Research in Motion (RIM) was not valid.

The settlement was reached with Canadian-based RIM earlier this year, but NTP claims it was never finalised.

Sparking the dispute was NTP's claim that the technology behind Blackberry devices infringed on its own patents.

US District Judge James Spencer could now reissue an injunction that could shut down the Blackberry service in the US.

An injunction could be potentially disastrous for RIM, which derives 70% of its revenue from Blackberry sales in the US.

However, Judge Spencer has postponed any immediate action against RIM, leaving lawyers for both firms to sort out a hearing date.

Settlement invalid

The legal battle stretches back to 2002, when NTP successfully sued RIM for patent infringement, including its radio technology.

NTP won an injunction the following year to halt US sales of the Blackberry and shut down its service, although that ruling was delayed pending an appeal.

RIM and NTP hammered out the $450m settlement in March but the deal later fell apart.

Now the US court has ruled that the settlement was not "valid and enforceable" anyway.

While trading in shares in RIM was halted on the US Nasdaq exchange on Wednesday, shares in rival smartphone maker Palm jumped 5% after the court's decision.

"Regardless of the outcome of this case, today's ruling is going to mean a market share loss for Blackberry and a gain for Palm," said Tim Ghriskey, chief investment officer of Solaris Asset Management.

However, RIM has said it will implement a software "workaround" if the US court chooses to issue an injunction.

"RIM has also been preparing software workaround designs which it intends to implement if necessary to maintain the operation of Blackberry services in the US," the company said in a statement.

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