15 June 2005

RIM Lawsuit (Part 2)

Part 1 was background to my other email on the NTP vs. RIM lawsuit that's going on now. RIM stands for Research in Motion, a company based in Waterloo, Ontario, Canada; NTP is a patent holding company (i.e., a legal entity created to own and defend patents) based in Virgina.

One thing I wanted to mention, because it seemed to be on your mind, was the lawsuit between RIM (developer of BlackBerry) and NTP (the patent infringement plaintiff). This suit pertained to the transmission of data between individual BlackBerry units and transmission relay units. The lawsuit applied to all RIM devices, and did not affect the keyboard design. Thomas Campana was both the inventor of this technology and the founder of NTP, about which almost nothing is known (all I know is traced back to publicized court documents and the Gartner Dataquest's Todd Kort). Campana appears to have done his work in the early-mid 1980's while at AT&T.

According to Kort, who did the research on the NPT vs. RIM case, Campana's behavior was awfully fishy. He came up out of nowhere in 2000 with this lawsuit, but he had the documentation and stomped RIM legally. I think most technology experts think his case was flimsy, but it pertains to the geographical location of patent infringement.

Campana has sinced died, but NTP naturally continues the fight.

Anyhow, RIM settled and its stock price soared. Unfortunately,
Forbes/New York Times: "As Patent Deal Unravels, Anxiety Rises at BlackBerry Maker"

For three and a half years, patent claims by NTP, which is based in Arlington, Virginia, have been a cloud over Research in Motion, based in Waterloo, Ontario. But the announcement last week that a $450 million agreement reached in March was unraveling came at a particularly delicate time.

In a court filing that followed, the privately held NTP indicated that if the settlement cannot be revived, it plans to invoke an injunction banning sales of BlackBerries and their e-mail service throughout the United States.

That injunction, which was put on hold during an appeal by RIM, has grown more powerful with time. After years of having the wireless e-mail market more or less to itself, RIM now faces competition from hardware makers like Palm Computing and software vendors including Seven Networks, Good Technology and Visto.

For now, a shutdown of Research in Motion in the United States, where the company gets about three-quarters of its revenue, is far from certain. But the renewed legal uncertainty is almost toxic for some members of the investment community
I am not competent to say if this is a serious possibility or not. But RIM is one of the biggest names in PDAs.


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