Feb. 24 (Bloomberg) -- Research In Motion Ltd. will probably be ordered to halt most of its U.S. BlackBerry e-mail service after a judge hears arguments today on a proposed shutdown.

``The balance is in favor of'' a court-mandated shutdown, said Brian Ferguson, a patent lawyer at McDermott Will & Emery in Washington. ``It's just a typical, garden-variety patent case. We get injunctions all the time that prevent certain technologies from being used.''

That threat could push Waterloo, Ontario-based Research In Motion to settle the case and avoid halting the BlackBerry service, used by more than 3.2 million Americans from Wall Street bankers to government officials. Research In Motion may also persuade the judge to suspend his order to allow for an appeal.

U.S. District Judge James R. Spencer is likely to rule in favor of NTP Inc., a company that claims Research In Motion infringed its patents. NTP will argue that BlackBerry service be suspended across the U.S. until the case is resolved. Spencer can make his ruling today in Richmond, Virginia, or delay an opinion.

Legal precedent is on the side of Arlington, Virginia-based NTP, some patent lawyers say. NTP relies on a 1908 Supreme Court decision that said preventing others from using a patented invention is an essential right of a patent owner.

The U.S. Court of Appeals for the Federal Circuit, which specializes in patent cases, said last year that injunctions to stop infringement are the ``general rule.''

Rare Denial

Research In Motion shares have risen as much as 12 percent this year, a sign that investors are anticipating the case may be resolved through a settlement before any shutdown. The stock rose 97 cents to $70.50 at 9:46 a.m. today in Nasdaq Stock Market composite trading.

The two sides traded barbs yesterday. Research In Motion Co- Chief Executive Officer James Balsillie said NTP never offered a reasonable settlement. NTP earlier released a press release that said Research In Motion was issuing misleading statements about the validity of the patents.

A denial of an injunction ``is very rare in all of recorded U.S. history,'' said Gene Lee, at patent lawyer with the Fish & Neave IP Group of New York-based Ropes & Gray.

Research In Motion argues the public interest would be hurt by a halt in service. The BlackBerry is part of the ``critical infrastructure'' of the U.S., the company argued in court papers filed before the hearing.

By law, any injunction would exclude government employee users, and NTP has told the judge that emergency personnel, such as Red Cross workers, should be exempt.

U.S. Government Concerns

The U.S. Justice Department, whose lawyers will also speak at the hearing, have expressed concern that the company won't be able to shut down non-government users without harming government functions, including communications with contractors.

Research In Motion this month said it began testing software to allow its service to keep running if the company loses the suit. Users will be able to download the program over the Web, letting them switch to a system that doesn't use the same patents.

About 70 percent of the company's revenue comes from sales of the hardware, with airtime sold by wireless carriers. The growth in BlackBerry users has been crimped by the suit, and switching to the workaround also may impact the device's adoption, American Technology Research analyst Rob Sanderson said yesterday.

Research In Motion may benefit from legal arguments that stretch back to a case more than 70 years ago.

Sewer System Case

In 1934, a court refused to shut down the Milwaukee sewer system because of the impact on public health in a patent case often cited by patent lawyers as setting the standard for denying an injunction. In 1945, a court said it wouldn't bar a process for putting Vitamin D into margarine to prevent rickets.

Spencer may delay implementing the ruling. In doing so, he could cite several cases. One is a case involving the online auction house EBay Inc., in which the Supreme Court is reviewing the ``general rule'' favoring injunctions after infringement findings, the lawyers say.

That case could change the rule, especially if the patent owner doesn't make competing products, which is the case with NTP.

``The big curveball in this case is EBay,'' said patent lawyer Robert Yoches of Finnegan Henderson Farabow Garrett & Dunner in Washington. ``If it weren't for the potential of that case, the rule is essentially that you always get an injunction if you want it.''

`No Effect'

Spencer has indicated he won't wait for final rulings on whether NTP's patents should have been granted in the first place.

In a parallel proceeding, the U.S. Patent and Trademark Office has been examining the patent's validity. Earlier this week, the agency rejected the second of two patents that are the basis of NTP's injunction request, saying the inventions weren't really new. Earlier this month, it made a similar ruling on the other patent. NTP can appeal those findings within the patent office and then to a court, which might take a year or more.

Earlier in the case, Spencer said he wouldn't be influenced by patent office actions.

``I did see that there has been a re-examination or something going on,'' he said in 2003. ``But of course that will have no effect whatsoever on us. This is still probably one of the few places left where money and power and political influence doesn't mean a damn thing. All of that stuff that's going on outside of what happened here is irrelevant to me and will have zero impact. Zero.'' 1

Rising Sales

NTP has offered a 30-day period to allow customers time to find another service, while the government is asking for at least 60 days to ensure no government workers are affected.

BlackBerry sales have continued to rise during the lawsuit, which NTP filed in 2001. Research In Motion reported 4.3 million users worldwide for the nine months ended in November, up from 321,000 users in the fiscal year ended March 2002. Sales rose fivefold, from $294.1 million to $1.5 billion, in that period.

Other companies, meanwhile, have entered the pocket-sized e-mail business. Palm Inc. sold 602,000 competing Treos last quarter, just behind 645,000 BlackBerrys.

On Feb. 14, Balsillie pledged that the service would continue ``no matter what happens'' in the patent case. If the company uses the new technology to ``work around'' NTP's patents, that might start a new legal fight, said attorney Kenneth Wilson of Perkins Coie in Menlo Park, California.

``It's a fascinating set of issues,'' Wilson said. ``I've hedged my bets. I've got a Treo.''

The case is NTP Inc. v. Research In Motion Ltd., 01cv767, U.S. District Court, Eastern District of Virginia (Richmond).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net.

Last Updated: February 24, 2006 09:46 EST