Friday, March 03, 2006

Why A Deal Was Reached

Analysts say the main reason for the agreement appears to be the judge’s impatience and unwillingness to wait for the US Patent Office to rule on the NTP patents. This combined with the beginnings of a slowdown in BlackBerry sales, as customers feared it would be disruptive or impossible to work around an injunction force RIM to make the agreement. NTP in turned agreed because $612.5 million is a lot of money.

Since the US Patent Office’s re-examination of the patents is unaffected by the deal, RIM may be paying for patents that will soon turn out to be invalid. As a result RIM co-CEO Jim Balsille feels that he “took one for the team” by agreeing to license patents that he feels “will not survive” but with RIM stock rising by 18.5% in after hours trading following the announcement he must be feeling better to some extent.

NTP Wins: RIM Strikes Deal for $612.5 million

RIM and NTP have announced that RIM will license NTP’s patents for a one-time payment of $612.5 million, regardless of what happens to the patents. Among the terms was the ability for RIM to ensure its third party partners could use the patents. This was something that NTP claimed previously suggested terms would but RIM stated they did not. The press release states:

The license covers all the current NTP patents involved in the litigation as well as any future NTP patents. All of RIM's past and future products, services and technologies will be covered as well as all RIM customers and providers of RIM products and services, including wireless carriers, distributors, suppliers and ISV partners. RIM will have the right to grant sublicenses under the NTP patents to anyone for products or services that interface, interact or combine with RIM's products, services or infrastructure. The agreement permits RIM and its partners to sell its products, services and infrastructure completely free and clear of any claim by NTP, including any claims that NTP may have against wireless carriers, ISV partners or against third party products that use RIM's BlackBerry Connect / BlackBerry Built-In technology.

RIM’s executives continue to belief that the patents will be struck down by the U.S. Patent and Trademark Office but the agreement with NTP does not call for a refund if this happens. However there maybe other companies not yet sued by NTP that can benefit if the patents are struck down.

Wednesday, March 01, 2006

Customer Reaction and Plans

The Washington Post looks at customer reaction to a possible BlackBerry email service injunction in the U.S. and preventive steps that companies are taking or plan to take.

RIM’s competitors are not overlooking this opportunity. The article states:

RIM's problems have been good for competitors' business, including Good and Visto Corp., both of which have received hundreds of inquiries from companies looking for alternatives, and both of which have licensing agreements with NTP.

However most customers are continuing to use BlackBerry devices due to the time and cost of switching devices.

Tuesday, February 28, 2006

Questioning the Workaround

An AP article in the Toronto Star by Tyler Hamilton notes the discrepancies between two sets of statements by RIM. On one hand the company claims it’s customers face potential disaster if an injunction against its email service is issued, but on the other hand it says it has a well-tested workaround ready to go in the advent of such an injunction.

Given these two sets of statements the Judge hearing the case is questioning why doesn’t RIM put the workaround in place now. If that is truly his feeling then this indicates both that his is inclined to issue an injunction but at the same time will not issue an immediate injunction against the workaround, something that NTP will no doubt request.

Fight Over Third Party Licensing

The Globe and Mail reports that RIM and NTP each issued press released on Monday, focusing on the licensing terms that NTP is offering RIM for a settlement. In a press release NTP claims that any settlement would cover RIM’s customers, wireless carriers and partners. RIM says the actual terms indicate the opposite and this is what’s holding up a settlement.

Friday, February 24, 2006

More reaction

RIM co-CEO Jim Balsillie is quite happy and confidence in a TV interview following the ruling, The Globe and Mail reports:

Never, ever, ever have they (NTP) put up true ‘patent peace' as a form of settlement,” he said.
As well, he referred to the second of two NTP patent claims being finally rejected by the U.S. Patent Office earlier Friday: “These patents are just gone.”

Judge: No Immediate Injunction


RICHMOND, Va. - A judge Friday stopped short of ordering an immediate shutdown of millions of BlackBerry portable e-mail devices made by Research In Motion Ltd.
But U.S. District Judge James Spencer said there was no escaping that RIM had been found to be infringing on NTP Inc.’s patents and he would issue a decision on an injunction “as soon as reasonably possible.”

NTP Says RIM Politically Powerful Bully

NTP is accusing RIM of using money, power and political influence to influence the actions of the U.S. Patent and Trademark Office. One charge is that than Liberal Minister of Industry, David Emerson wrote to U.S. Commerce Secretary Carlos M. Gutierrez asking for the patent office to publicize its timetable for the patent reviews, which it soon did.

RIM denies the charges of political influence.

Thursday, February 23, 2006

Experts Divided On a Shutdown

On ZDNet’s IP Telephony, VoIP, Broadband blog, Russell Shaw asks eight experts if there will be an injunction issued against RIM. Most think there will not, but in a follow-up postings Shaw quotes from Troy Wolverton of who thinks there will be an injunction issued while Todd Kort, a senior analyst at Gartner argues against a shutdown.

Key points for a shutdown:

  • The sides will not settle out of court.
  • An injunction is standard practice and the Judge is impatient with RIM’s arguments.
  • RIM’s response to an injunction will be its workaround.
  • If used, the success of the workaround in keeping BlackBerry email service working will determine RIM’s future actions.

Wednesday, February 22, 2006

First Final Patent Rejection

On Wednesday the U.S. Patent and Trademark Office issued a final rejection of NTP Inc.’s, patent with rejections of the remaining four patents expected. There is no indication if U.S. District Judge James R. Spencer will take this rejection into account during any upcoming rulings.

This blog's URL, is named after the patent in question - Patent #5,436,960.

Globe and Mail's Lawsuit Hub

The Globe and Mail nows has a RIM-NTP Lawsuit related page, including a summary of the possible impact of Friday's possible ruling.

Tuesday, February 21, 2006

Department of Justice Hearing Rejected

Reuters reports that U.S. District Judge James Spencer turned down a request by the U.S. Justice Department to hold a separate hearing on its concerns about the potential BlackBerry email service shutdown.