Patent holding company NTP Inc has rejected an offer by BlackBerry maker Research In Motion Ltd to settle their legal battle and the two sides are not currently negotiating, NTP co-founder Don Stout said on Friday.
Stout said RIM made an "unacceptable" written offer on Thursday to settle their patent infringement lawsuit, a lawsuit that could shut down the popular BlackBerry e-mail service in the United States.
"They have responded yesterday in a manner which is unacceptable so we're not negotiating. We're not sitting down trying to work out details. In other words, they didn't come close," Stout told Reuters in a phone interview.
"They might make another counteroffer. I don't know. That may be coming. But the current offer is unacceptable and not one we're going to negotiate." RIM did not immediately respond to e-mails requesting a response to Stout's comments.
Stout, who is also a patent lawyer, said he wanted to curb false speculation that the two sides were in talks and close to a deal. RIM's stock at one point gained more than 7 percent on Friday on growing investor hopes for a settlement.
RIM shares closed up $3.38, or 5.6 percent, at $64.13 on Nasdaq on volume of more than 22 million. In Toronto, the stock rose C$3.57 to C$73.97.
NTP successfully sued RIM for patent infringement in 2002. It won an injunction the following year to halt US sales of the BlackBerry device and service. The injunction was stayed pending the appeal process, which has largely been exhausted.
Hopes for a settlement rose this week after RIM disclosed on Wednesday it had been in communication with NTP through a court-appointed mediator.
But Stout said RIM had simply suggested the case be stayed in return for RIM paying NTP a certain amount of money. He said NTP rejected the idea and the stay was not granted. "There was a communication made by RIM to the magistrate and there's no formal mediation going on," Stout said.
Stout repeated on Friday that NTP had proposed that the case be settled with a lump sum payment equal to a royalty rate of 5.7 percent over the life of the patents, which expire in 2012.
He did not give a specific dollar amount and said NTP would need RIM's sales projections to calculate this figure. RIM and NTP announced a $450 million settlement in March but the deal fell apart in June.
RIM was pushed closer to a possible US shutdown after US District Court Judge James Spencer ruled on November 30 there was no "valid and enforceable" settlement agreement. He also denied RIM's request to stay proceedings pending the completion of a review of NTP's patents by the US patent office.
RIM is facing growing concerns from customers. In a report dated December 5, US technology consulting firm Gartner Inc advised clients to put "mission-critical" BlackBerry deployments on hold until RIM's position in its legal battle is clarified. It also said clients should consider alternative offerings.
Executives with RIM's wireless e-mail rivals Good Technology, Seven and Visto all told Reuters on Friday that customer inquiries had picked up amid concern about the risk of an injunction.
"Our reps are calling and saying that they can't schedule all the meetings, they can't do everything they need to do because there's been such interest," Good Technology Chief Executive Danny Shader told Reuters.