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BlackBerry case: No shutoff, for now
February 24, 2006
Research In Motion and NTP have agreed to settle the patent dispute over the BlackBerry device for $612.5 million, the companies announced in a press release on Friday. Under the agreement, RIM will receive a license to NTP's patents going forward, they said.
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Reporter roundtable--RIM settles with NTP: Join News.com reporters and editors as they discuss the implications of the long-running case.
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The agreement involves a one-time payment to NTP, RIM co-CEO Jim Balsillie said during a Friday afternoon conference call. Even if the U.S. Patent and Trademark Office eventually overturns NTP's patents, NTP will not have to repay the $612.5 million. "There is no provision for the PTO re-exam. This is a full and final settlement," he said.
"It's very important we got the scope we wanted. The scope relates to all of NTP's patents and relates to all of RIM's products," Balsillie added. "We really did this to give certainty, and calmness and comfort to our ecosystem."
RIM and NTP briefly agreed to settle the case for $450 million in March of 2005, but that deal later fell through. RIM thought the companies had come to a final agreement, but NTP believed the matter had never been finalized, and the litigation continued.
Dennis Kavelman, RIM's chief financial officer, said RIM was feeling the effects of enterprise customers waiting for resolution in the case before expanding their current BlackBerry usage or upgrading to new hardware and software.
Balsillie expressed his frustration with Judge James Spencer's inclination to move forward with the case and not wait for the USPTO to complete its re-exam. "It was surprising and disappointing that the court wasn't going to put much weight on the final office actions."
"It's a lot of money for patents that will not survive, for sure, but that doesn't do us any good if there's a court that doesn't wait."
Listen up
During a Friday conference call, Research In Motion co-CEO Jim
Balsillie discusses the details of today's settlement with NTP.
Listen now:
Download mp3 (1.2MB)
The agreement comes one week after the companies argued over whether Judge Spencer should impose an injunction on the sale and support of BlackBerry devices in the U.S. During that hearing, Spencer expressed his frustration that the companies hadn't settled their dispute, and promised to rule promptly on the injunction.
Patent lawyers agreed that strong words from Judge Spencer last week hinted at an injunction in RIM's future and played a major role in the speedy resolution.
The judge "did say that although he is not issuing an injunction today, RIM shouldn't take any comfort in thinking he'd never issue an injunction, so he kept that option open and was strongly encouraging the parties to settle," said George Chen, a patent attorney with the firm Bryan Cave in Phoenix, Ariz.
The judge's ready acceptance of the parties' settlement and dismissal of their case on Friday "is indicative of the fact that he was sitting on an injunction, ready to go," said Paul Andre, an intellectual property partner at Perkins Coie in Silicon Valley. In situations where an injunction appears imminent and the patent holder is willing to grant licenses, it's fairly standard for parties to settle, he said.
Click here for a PDF of the judge's dismissal order. Click here for a PDF of the judge's order releasing the funds from escrow. Trading in RIM stock was halted prior to the announcement. When the shares started trading again in the after-hours market they immediately jumped $10.43, or 14.5 percent, to $82.35.
Months of uncertainty regarding the BlackBerry took a financial toll on RIM, the company said in Friday's press release. RIM said after trading Friday that sales for its fourth fiscal quarter, which ends Saturday, would be in the range of $550 million to $560 million--lower than the $590 million to $620 million guidance the company had provided in December. But sales were still well above RIM's $404.8 million total for the same quarter a year ago.
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If RIM wasn't wrong, the parties would have settled for $0 or maybe paid a bit to NTP just to go away.
RIM is now stating - We are paying NTP over $600 million because we stole from them and no matter how hard our laweyers tried, and how much political influence we tried to exert, NTP kept winning in court.
Good for the inventor. May he Rest-In-Peace. Thank you NTP for putting up huge amounts of money and taking the risk.
But if you read all of NTP's patents and also learn the history of Campana's work, you will see that this is a typical example of patent lawyers generalizing a niche invention to vaguely cover technologies neither the inventor nor the patent lawyers envisioned. Make the wording general enough, and suddenly you can wag your finger to accuse a toaster maker of infringing the patent of a heater.
I applaud RIM for standing by their principles for so long and am saddened that they caved in. I am curious, if NTP's patents do not stand up after final review by USPTO, will NTP return RIM's payment?
That left RIM with two unsavory choices: 1) wait on the PTO re-exam to invalidate NTP's patents and risk the injunction (which would be a death knell for their business, no matter what their planned software workaround was; or 2) pay NTP so the matter goes away, but at least they got to kick NTP in the corporate groin by having initiated the PTO review that will invalidate all the "IP" that came into play in this case.
American inventor of predictive text Howard Gutowitz, who owns a small company named Eatoni Ergonomics, tried to license his inventions to RIM. RIM responded with a lawsuit. This is a common tactic of deep pocketed companies, which often is a ploy to bankrupt financially weaker inventors. Our organization, PIAUSA.org has helped this inventor make contact with those who are in a position to stay the course until justice is achieved. http://www.eatoni.com/wiki/index.php/Litigation
It is our opinion that RIM's litigation with Howard Gutowitz may well become as contentious and self destructive as their battle with NTP. How will investors and end users react when they discover that RIM is facing a very similar situation to the NTP case? What businesses will deploy RIM services when they have legitimately licensed alternatives such as Visto and Good Technology and the Palm Treo? Why isn't our government switching to reputable service providers who respect American innovator's intellectual property? And perhaps the most important question is why some of our representatives are backing patent pirates!
Many years ago I observed that some CEO's act like teenage boys, big egos - little thought before engaging those egos - short term gain orientation and marginally developed sense of ethics. RIM's conduct most certainly reinforces this observation.
====
The Professional Inventors Alliance USA was created more than a decade ago to protect American invention and encourage innovation. American inventors saw a need to track congressional legislation and federal policy that impacts independent inventors, small and medium-sized businesses and colleges and universities. The Alliance is the premiere organization in the nation, providing independent inventors a united voice in order to improve public policy.
The Alliance provides legislative counsel, congressional updates and strategy development to its members through a number of vehicles. Additionally, through its speaker?s bureau, Alliance members have an opportunity to provide expert opinion to many of the nation?s top-tier business, technology and mainstream media organizations. Over the years its members have testified before Congress, offered counsel to key Senate and House committee members, and successfully pushed legislation to protect America?s independent inventors.
Since its inception, the organization has grown into one of the most vocal advocates for America?s patent system
Ronald J Riley, President
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So if I took a hammer and smashed all the function keys (F1, F2, F3,...) so that these keys become unresponsive, would I violate Eatoni's patent?
As well, all I see in US Patent 06885317 are "shells and shadows" of some predictive-text technology. So if I understand what you are saying, if someone came up with the "guts" to actually implement it, they would have to license the patent from Eatoni?
Let me guess, if I sat down and draw up a description of what the next generation space vehicle is would be like, then apply for a patent. Assuming the idiots at the patent office approves of it, would I be able to require NASA to pay me royalties if the new space shuttle replacement that they are designing has even the slightest bit of resemblance to the stuff described in my patent? If so, the patent system really needs to be reformed.
irretrievably broken hasn't been paying attention, or, at least,
has never had personal experience with it.
The RIM case is an obvious example. As a software developer, I
was involved in creating landmark IP contracts in the early
1980's, so one would expect I would side with NTP on this issue.
This assumption would be incorrect.
I believe that Judge Spencer stands in the position of the
"muscle" in a Mafia-style extortion scheme. He has served no
socially beneficial purpose and his idiotic pig-headed stance in
the face of full knowledge that the patents he so assiduously
defended were (excuse me) patently false, that one is forced to
assume that his decision was based not on law but criminal
conflict of interest. His stance, strong-arming RIM to pay
protection money for patents that are, and alway have been,
INVALID, is reprehensible at best, criminal at worst.
I don't use a Blackberry and have no personal dog in this fight,
but I believe that this case is a canary in the coal mine. The
system is broken and if it doesn't get fixed we're all hosed.
The "inventor" representatives applauding this travesty are
short-sighted and venal. If they can't recognize the difference
between legitimate intellectual property and hosebag
extortionate litigation fodder, they don't warrant an opinion.
someone else's invention, copywriting somebody else's story,
etc., should be criminalized. Jail and restitution must be equal
remedies. Stealing ideas from people wrecks their lives and
diminishes their families unjustly to degradation, poverty and
want.
If it can be proven that a company purposely used someone else's invention - knowingly - the CEO/owner should go to prison.
If there was no intent, then no criminal act occurred.
The guy that invented intermitant window wipers for cars had to sue many of the car companies. Some honest car companies looked at the other cases and settled. Other slimeball car companies just kept fighting because paying money later is better for their bonuses and stock options then paying now.
If those CEO's were facing jail time, the lawyers would have had fewer billable hours and the inventor would have had a lot less stress.
Lots of people called that inventor all kinds of bad names, but in the end, he invented it and all the car companies paid him.
There are two ways these can work - one maliciously, and one more innocently:
1.) INNOCENT:
Company A creates (or obtains the rights to) Invention Z.
Company A patents Invention Z.
Company B uses, or makes too similar an implementation of, Invention Z.
Company B hadn't done their homework, and is likely liable to Company A, for their use of Invention Z.
2.) MALICIOUS:
Company A creates (or obtains the rights to) Invention Z - *with the intent to let it sit in the background for the forseeable future.* In other words, they do pretty much nothing with it.
Company B incorporates Invention Z (or something very similar) into Product X.
Product X becomes a hugely popular success - and perhaps a de facto, or even official (e.g, ANSI, ISO), standard.
Company A lowers the boom, and demands a big wad o f money from Company B.
Company B may or may not settle - if not...
Company A sues Company B.
Company A gets a huge judgement, eventual settlement, or even an injunction - crippling something that has become a standard for a large userbase.
Is it just me, or is there something just plain wrong with the second scenario?
It'd be a pain to prove it... but some of these seem like that - esp. where they involve widespread standards. NTP's patent is a good example - it seems as if no one in this country had even *heard* of them before this. It's not enough to prove culpability in the second scenario... but it's damn suspicious IMHO.
Other good examples are Unisys with LZW (GIF, and even more sadly, V.42biz. Yes, I know that modems are a thing of the past for a lot of people... but the fact that such a thing made it into a world standard is screwed up), and one company a while back which claimed rights over something used in the JPEG standard (again, never heard of them).
The latter of those is just plain BS - and I'm almost sure it fits into my second hypothetical scenario above. I mean... that was almost 20 years ago. They had plenty of time to bring that up before when they did.
Blackberry's days are numbered already. It'll go the way of Apple and it's Macs. Maybe you can play music on your Blackberry's in the future.
- BlackBerry
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by ipfresh
March 5, 2006 4:11 PM PST
- Research In Motion Ltd. (RIM) announced late today that it has agreed to pay $612.5 million to NTP Inc. to settle the long-running legal fight between the two companies.
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See all 24 Comments >>The patent dispute had threatened to end RIM's popular BlackBerry e-mail service to millions of users in the U.S. and has been the subject of a contentious, four-year patent battle between the two companies. http://www.media-press-release.com/desk/200603/24855.htm
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