BlackBerry Patent Fight Back In Court
By Carlo Longino, Mon Jun 07 19:15:00 GMT 2004

RIM's final appeal over patents covering its popular wireless e-mail devices begins today.


RIM was dealt a serious blow last August when a US federal court ordered it to pay NTP, a patent holding company, about $54 million and issued an injunction (which was stayed) preventing RIM from making, selling or servicing BlackBerries in the US. Should RIM lose this appeal, or be unable to reach an agreement with NTP first, it would have to pay out more than $100 million once legal fees and interest are added, but the more damaging effect would be that it would destroy the core of RIM's business -- although at the end of its fiscal 2003 (the most recent geographic data available), BlackBerries were available in 30 countries, 83.3 percent of RIM's revenues came from the US.

While this is RIM's "final" appeal, it's still possible the fight could drag on for a while yet, and there are some other twists. The possibility of a $100 million payout no doubt excites NTP, the holding company for the patents of a Chicago inventor, an injunction would cut off US sales of BlackBerries and preclude a potentially more lucrative licensing deal. NTP doesn't have an interest in keeping RIM products off the market, since it's not a competitor -- it doesn't actually make anything at all.

NTP's suit has kept devices with BlackBerry software out of the US market, as vendors are afraid they'll become NTP's next targets. It's hard to decipher exactly what the patents in question cover -- only RIM devices themselves, their software, or what -- but clearly they're threatening. While it's understandable that RIM's got some animosity towards NTP, its strategy looks to be taking a pretty typical pattern, rather than ironing out a licensing deal. Look for the company to keep fighting in the courts until either it wins, or finally loses, by which time -- if it hasn't engineered a way around the patents -- it will be ready to ink a licensing deal that will preclude the lawsuit and judgements, leaving the lawyers as the only clear winners.

The Patent Office is reexamining five of NTP's eight corresponding patents, and its decision could render any judgment irrelevant. But this appears to be another story that's really about the sad state of the US patent system. If NTP's claims get upheld, all it will do is stifle innovation and lead to more lawsuits, when NTP arguably doesn't even have a business that's being harmed.