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I'm sure many of us are following the NTP case closely (I know I am). ... General Blackberry forum

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    mobilemetal's Avatar
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    Nov 2005

    RIM in the News Again.


    I'm sure many of us are following the NTP case closely (I know I am). It looks as though even if RIM wins, they still lose in some respects. You can get the full article here. And I certainly am getting tired of all of this; but I don't think I could handle the alternatives.

    By Brad Stone

    ... The 5 million finger-tapping e-mailers who use the RIM BlackBerry are known for being famously addicted to their devices. Last week many were undoubtedly considering the prospect of court-ordered withdrawal. RIM's feud with Virginia patent firm NTP Holdings has devolved into a seemingly un-ending series of legal motions and incongrous courtroom rulings, many of them going against RIM. Last week alone, on two parallel tracks in the dispute, both RIM and NTP won victories. But in its determination not to lose the battle against NTP, RIM may be handicapping itself in the larger battle. Its stock price is down 25 percent this year, largely due to the uncertainty of its legal situation, analysts say. While an actual shutdown of BlackBerry service in the United States is unlikely (RIM will either settle or attempt to circumvent NTP's patents with changes to its service), rivals are clearly salivating over the troubles of the industry leader. "This is providing a huge opportunity for companies like Microsoft and Palm to move aggressively on RIM's customers," says wireless-industry analyst Rob Enderle.

    The RIM case actually isn't all that unique. Most high-tech companies are beset by patent ankle-biters, such as NTP, that don't make any products but own intellectual property they claim is being trampled. Some tech giants fight back against what they see as implicit blackmail—eBay's dispute with a defunct Web site called MercExchange, for example, is currently up for review by the Supreme Court. But most big tech firms pay the little guys a licensing fee to disappear rather than risk expensive litigation and unreliable jury verdicts, which is one reason Congress is considering reforming the patent system.

    RIM has shown a strong reluctance to what it feels would be overpaying to resolve the dispute with NTP, even as its legal bills mount. (RIM declined to comment for this article.) The Waterloo, Ontario, company is famously hard-driving and passionate about its history of innovation. "These guys are a proud company," says Gartner Group wireless analyst Ken Dulaney. "Once they believe in something, they don't take it lightly." RIM originally ignored NTP's letters of warning that it infringed on eight patents surrounding the wireless transmission of e-mail, in the name of engineer Thomas Campana, who died last year. NTP sued, and in 2002 a jury awarded NTP $23 million, or a 5.7 percent royalty on RIM's sales. RIM appealed, and as the case dragged on, its revenue—and the royalty honey pot—skyrocketed. Last year RIM and NTP reached a $450 million settlement and announced it publicly.

    But the deal fell through for undisclosed reasons and the parties returned to war. RIM now wants the courts to wait for the U.S. Trademark and Patent Office to review NTP's patents. Last week the Patent Office did reject one critical NTP claim, but it may be too late. In his ruling last week, Virginia Judge James R. Spencer said he couldn't wait for the belabored Patent Office process and would consider shutting down the BlackBerry service in the United States.

    But even if RIM ultimately prevails in court, analysts think it should be concentrating not on NTP but on the action in its rearview mirror. Alternative mobile e-mail services from Microsoft and Nokia aren't nearly as robust as what RIM offers, and upcoming mobile e-mail devices from Motorola, HP and Palm may not be as slick as the BlackBerry. But if the BlackBerry becomes synonymous not just with e-mail addiction but confusing, endless litigation, they won't have to be.

  2. #2
    Tech Idiot's Avatar
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    Nov 2005

    Re: RIM in the News Again.

    Interesting article. I've read many of them recently. What I found interesting, being that I am not an attorney, is that -- from what I gathered from the various articles -- the court wouldn't force the plaintiff to take the $450m or so judgement. I don't know why the deal fell through.

    Common sense tells you that a $450m offer means that the defendent was "nervous" or "concerned". You go out and raise that kind of liquidity, it's obvious you want this to go away and are willing to pay some serious dollars to make it happen. You hope this isn't the first.


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