U.S. judge backs RIM in patent dispute with Mformation

A U.S. judge earlier this week overturned a $147.2 million jury award against Research in Motion Ltd

The ruling, outlined in court documents, gives RIM a much needed reprieve as it battles to conserve cash and turn around its fast-fading fortunes. More nimble competitors have outmaneuvered RIM in recent months, luring away many long-time BlackBerry users.

Crucially for RIM, U.S. District Chief Judge James Ware also granted RIM's motion seeking a new trial if a higher court overturns his ruling. This means that the jury award cannot be reinstated should Mformation successfully appeal the new ruling.

RIM, whose share price has fallen over 70 percent this year as its devices have ceded ground to a new crop of smartphones like Apple Inc's

"We appreciate the judge's careful consideration of this case. RIM did not infringe on Mformation's patent and we are pleased with this victory," said RIM's Chief Legal Officer Steve Zipperstein in a statement yesterday.

A win for RIM at last

RIM's shares rose 4.1 percent to $7.93 in morning trading on the Nasdaq. Its Toronto-listed shares rose to C$7.87. Mformation sued RIM in 2008 and the jury trial began in June. Last month, the jury ruled that RIM had infringed the Mformation patent and awarded the New Jersey-based company $147.2 million in damages.

Waterloo, Ontario-based RIM argued that the jury did not have sufficient evidence to reach this verdict and sought to have it overturned by the judge, who was overseeing the trial. "The court finds that there was no 'legally sufficient evidentiary basis' on which a reasonable jury could have found for Mformation on the issue of infringement," said Judge Ware in his ruling.

Spokespersons for Mformation, which helps companies manage their smartphone inventory, were not immediately reachable for comment on the new ruling. It is also not clear whether the company will file an appeal.

RIM is no stranger to patent litigation - it was almost crippled by a five-year patent fight with NTP that began in 2001 and at one point threatened to shut down RIM's U.S. operations. RIM eventually paid out more than $600 million to NTP Inc, a patent holding company, to settle that case.

RIM said the dispute with Mformation highlights the need for lawmakers to reform patent laws. "The purpose of the patent system is to encourage innovation, but the system is still too often exploited in pursuit of other goals," said Zipperstein.