Stuck In The Blackberry Jam
The power of controlling patents and the ripple effect it has in controlling technology is evident with the Blackberry. Since 2001, a legal battle has been waged for dominance in this particular wireless market between a Canadian based company called Research In Motion and a patent holding company in McLean VA named NPT. The history of each company is a story in itself but the essence of NTP has been described as a filing cabinet by the owner.
One overall dynamic relationship is seen in reactions caused by court judgments. These decisions have a direct impact in investor actions, technology development and ultimately the function of devices already purchased by the public.
RIM's stock has dropped 21% this year on fears the company would be shut out of its largest market, where it generates about 70% of sales.
Investors may also have been reacting to a decision by Mr. Justice James R. Spencer of the U.S. District Court for the Eastern District of Virginia on Wednesday to consider whether a US$450-million settlement with NTP, announced in March, should be enforced as requested by RIM.
The deal fell apart three months later after both parties disagreed on the terms of the settlement.
NTP was awarded US$53.7-million, 8.55% of future U.S. BlackBerry sales and the sales injunction in May, 2003. The injunction was stayed pending RIM's appeal. NTP says the damages now exceed US$210-million.
BlackBerry patent: Ban could imperil public services, government says
Supreme Court Decision
With a simple stroke of his pen, the nation's new Chief Justice set the high-stakes world of mobile e-mail atwitter. Shares of Research In Motion (RIMM), maker of the popular BlackBerry e-mail device, slumped to their lowest level in a year: $51.90. The cause: U.S. Chief Justice John Roberts on Oct. 26 rejected RIM's request to stay a lower court's patent-infringement ruling while the high court decides whether to hear RIM's appeal. But ever since, the stock has been roaring back. On Oct. 28, shares closed at $62.58.
RIM wants the lower court to enforce the agreement, but its bargaining leverage has been eroded by defeats in court (see BW Online, 10/24/05, "Dwindling Legal Options for RIM?"). NTP could wrangle as much as $1 billion in settlement fees from RIM and an 8% to 9% royalty, according to Citigroup Global Markets analyst Daryl Armstrong. With about $1.3 billion of cash on its books, that's a sum RIM can handle.
"NTP may not find another opportunity as lucrative as this," Armstrong says. They might figure, "Why press for pennies when you can get a bill [$1 billion]?"
Backed into a Corner?
From the website Corante, a few examples are explained about the subtle differences that can have a huge
impact on speculation of specific future proprietary technologies.
More recently the telephone companies--more specifically the cell phone providers--made an expensive and huge bet on 3G--the third generation cell phone spectrum capable of digital broadband transmission. They believed in the prediction of the future of wireless and bet billions to obtain the bandwidth. But they didn't account for other wireless technologies like 80211.x--Wi-Fi. Now there's Wi-MAX. Other pieces of spectrum, such as 700 MHz that will become available when broadcasters return UHF spectrum to the FCC in three or four years, may be used. So while wireless is in our future, it would be difficult if not foolhardy to predict who might be the winners and losers a decade hence.
It’s easy to understand the difficulty but what recent history shows is that those fortunes at stake can be manipulated more by legal decisions than the best interests of the consumer.
Microsoft at odds with Intel?
Microsoft and Intel are taking opposing sides in a long-running patent dispute involving the BlackBerry handheld, a case that threatens US sales of the wireless email device.
Friend-of-the-court briefs filed last week by both companies and reviewed by ZDNet UK sister site CNET News.com reveal that Microsoft wants the courts to re-evaluate a 2002 district court decision that found BlackBerry maker Research In Motion infringed patents owned by NTP.
"We are telling clients that we don't think the courts will impose an injunction at this time," Kort said. "The US Patent Office is taking care of that. They have been throwing out NTP patents right and left."
NTP filed its latest legal papers on Wednesday in response to RIM's 16 August filing asking for a retrial and rehearing of the 2002 decision. RIM has two weeks to file its final response.
Judges with the US Court of Appeals for the Federal Circuit in Washington recently withdrew the initial 59-page opinion and issued a new 74-page opinion clarifying the definition of NTP's "method" patents.
The article quoted above from Sept 5 in it’s entirety at Microsoft and Intel fall out over BlackBerry case – ZDNet UK News shows
the stakes of a legal battle like this one.
From a Kos diary on the Roberts nomination I pulled this trivia
Finances
Roberts' financial statement published during his confirmation hearing indicated a net worth of $3,782,275. The only liability listed is the mortgage on his home, $270,272. Assets are cash, securities, and real estate.
and that link can be followed for more information on his history. With a history of litigation involving Microsoft it’s not a stretch to consider his nomination around the same time as having an impact on corporation’s decisions.
This is another iceberg that has the majority of impact and influence safely out of sight, for now.
We can only imagine the influence a Harriet Miers would have had on that bench.
I figured this was a good place to start. Feel free to add comments and opinions on
any of issues that are intertwined here from patents to Blackberries.
