A US appeals court has denied RIM's petition for a rehearing of its long-running patent dispute with NTP.

The decision once again raising the possibility of an injunction on sales of RIM's popular Blackberry devices in the US. However, the court also reversed one of the more controversial aspects of its December 2004 decision that upheld NTP's claims of infringement.

Barring additional appeals, the case now appears headed back to a lower court in Virginia, where NTP will seek an injunction against sales of the BlackBerry devices in the US, said the company's lawyer. NTP was previously granted an injunction by the same court, but that injunction was stayed pending RIM's appeal of a 2002 jury verdict that found the BlackBerry devices violated NTP's patents.

A spokeswoman for RIM said the company was still reviewing the decision, and had no immediate comment.

NTP and RIM have fought one of the more confusing, dramatic and high-profile patent cases in the technology industry over the past few years. At issue are shipments of the BlackBerry devices, which are surging as corporations issue the devices to workers so they can access their corporate e-mail on the go. NTP believes that the BlackBerry device and software used to send e-mails to the devices infringe upon patents granted to Thomas Campana in the early 1990s. NTP was formed to capitalise on patents issued to Campana, who died in June 2004.

In 2002, a jury agreed with NTP, but RIM sought an appeal of that decision on the grounds that the courts incorrectly interpreted the scope of NTP's patents. In December 2004, the US Court of Appeals upheld the decision, finding that RIM's BlackBerry devices, software, and methods of implementing the system infringed on NTP's patents. It did find an issue with one of the claims in NTP's patents, and asked the lower court to review that claim.

In January, RIM asked the appeals court to reconsider certain issues related to the December 2004 decision, but the court denied that request Tuesday. In a partial victory for RIM, it has removed its finding of infringement related to what NTP called "method claims". The method claims refer to the way in which RIM runs its wireless e-mail system, and sparked controversy when they were first announced because RIM is based in Ontario, outside the reach of US patent law.

However, the appeals court upheld its finding of infringement on NTP's "system and apparatus claims", which refer to the BlackBerry devices and software, Wallace said. Since those are sold within the US, the patent law applies, he said.

If RIM is prevented from selling the BlackBerry devices in the US, other companies will likely step up to fill the void after signing licensing agreements with NTP, Wallace said. Or, RIM will be forced to hammer out a licensing agreement with NTP or risk losing out on its largest market.

In between Tuesday's decision and RIM's January request for the rehearing, the two companies agreed to settle their dispute with a licensing agreement that was announced in March.

The settlement completely fell apart three months later though when RIM asked the lower court to enforce the terms of the settlement, in which RIM would pay NTP $450 million for a perpetual licence to NTP's patents.

To top it all off, the US Patent Office has waded into the dispute by issuing so-called "office actions" that invalidated all of the claims within seven of NTP's eight patents, the most recent office action coming in June. NTP is appealing that decision, which could take years.