The raging dispute between RIM and NTP over BlackBerry has been prominent in the news for weeks.
Some of the reports use the recent federal court hearing in Richmond, VA as a pretext for railing against the alleged failings of the patent system. The Wall Street Journal did this yesterday in an op-ed ($) piece. Matt Buchanan cogently rebuts some of the “let’s blame the lawyers” tone of that editorial; as do the Patent Baristas.
I think what’s really going on is that NTP has a good case, and RIM knows it. RIM could have settled the case for cents on the dollar years ago (reportedly +/- $20 million). RIM tried to settle for $450 million last year, which fell apart. NTP’s price had allegedly increased to $1 billion late last year.
In trial vernacular, when RIM can’t argue the facts (jury verdict), and can’t argue the law (attempted nine-figure settlement), they bang on the podium.
Two other signs that this case isn’t just about legal principles come from a W$J article last week (sorry, no link available). The first takes a bead on the mind of RIM co-CEO Jim Balsillie:
Inside RIM’s headquarters in Waterloo, Ontario, Mr. Balsillie’s battle strategy is being driven by indignation at the U.S. patent system and a determination to defend a principle. Mr. Balsillie, like many high-technology executives, says U.S. patent laws let parasitic little firms hold up innovative companies for ransom. “Is it appropriate to play Russian roulette with the system every day in the courts, where one claim can shut down the whole industry?” he asks.
The other is from an industry observer (Ken Dulaney) doing what they do best, observing:
The belief among RIM staff that the company has been wronged “borders on religion,” Mr. Dulaney says. “They’re going to lead the crusade.”
In my GC experience, when a company starts framing commercial disputes with terms like “principle” or “crusade,” inside counsel brace for one wild ride and outside counsel buy waterfront properties.
At last Friday’s hearing, U.S. District Judge James R. Spencer expressed frustration that the case hadn’t settled. In the meantime, Treo is gaining on BlackBerry. Have you noticed that Verizon’s ads for the Treo 700w are everywhere, including on primetime shows like “Lost?” (Thus implying that one would help you get “Found?”).
RIM is probably banking on the high cost of switching as a built-in protection against competitors like Treo. Press reports this morning indicate that the cost per user to switch could exceed $800.
But if Judge Spencer really wants a settlement, he has a rather large club at his disposal: enter an order granting NTP’s motion for an injunction against the infringing use by RIM of BlackBerry, and make it effective in 31 days.
Then it’s go time. RIM implements the workaround, or pays NTP the going rate for settlement.
What’s more likely is that RIM appeals the order and the case drags on. I am amazed, however, that RIM continues to ensure that their media branding revolves around words like “shutdown” and “workaround.” All part of a crusade, I guess.