BlackBerry users take stock as NTP threat is lifted

The Waterloo, Ont.-based provider of the push-e-mail service and related hardware announced its agreement to make a one-time payment in exchange for a licence agreement late Friday, after markets had closed. The deal means NTP will get the money even if the U.S. Trademark and Patent Office overturns its intellectual property claims. RIM and NTP had settled for far less – US$450 million – a year ago, but the deal broke down and came to a head just over a week ago, when a U.S. judge ordered the two parties to reach an agreement or face the threat of an injunction on BlackBerry sales in the U.S.

RIM spent Monday trying to run its business as usual. A team of its employees has set up an exhibit at VoiceCon in Orlando, Fla., where it showcased its wireless LAN products including its BlackBerry 7270, featuring 802.11 capabilities. It also announced support for Cisco’s popular Call Manager product, allowing IP telephony features for BlackBerry users in mobile campus-style environments.

Several vendors who have developed software products and services around the BlackBerry, meanwhile, expressed relief and a hope that the settlement would answer the anxious questions they have been getting from customers. Ottawa-based Tiree Inc., for example, announced its facilities management application, Archibus/FM, would be extended to the BlackBerry just two days before RIM faced a critical hearing about the threatened injunction late last month.

“There was certainly some significant concerns with the two organizations who are in the process of rolling it out,” said Tiree president Andrew Millar, referring to Tiree clients J.P. Morgan and MDS International, who are in the midst of North America-wide deployments. “They did formally approach us with what was our risk mitigation strategy, and indeed a formal dialogue about it did occur.”

While RIM had said it developed a workaround that would allow BlackBerry service to continue even in the event of an injunction, Millar said Tiree was prepared to move users over to a Pocket PC environment, using Microsoft-based software. The fact that the BlackBerry application is a Java-based, meanwhile, provided some level of device independence. “We could have ported to another hardware platform,” he said.

Eric Apps, president of Toronto-based Angoss Software, said his firm deployed its FundGuard predictive lead generation solution on BlackBerrys earlier this year because it was the e-mail platform one of its clients selected. By the same token, RIM’s dominance means it makes sense to build its marketing and sales analytics products around that user base.

“We like to think of the Blackberry in some sense as the iPod of the knowledge worker community,” he said. “I think the resolution of the NTP litigation will obviously benefit RIM . . . the workloads they are all under, not having to worry about implementing workarounds, or otherwise deal with potential disruptions of users, is likely a huge relief.”

Carmy Levi, an analyst with London, Ont.-based Info-Tech Research, said RIM’s biggest threat after NTP is Microsoft, which has been shipping a platform that’s mature enough to compete feature-for-feature with the BlackBerry, and Nokia, which last year bought Intellisync in part to provide an alternative to RIM’s service. Overall, however, he said most users are sticking by the BlackBerry.

“There has been some suppression of demand – some have been gun-shy and have held back from existing deployments out of fear. I think as this case draws to a close, that will change,” he said. “There’s a lot of optimism in the platform, that this remains a robust, deployable solution. If you look at the stock price, the market has voted with its pocketbook.” 

Millar, on the other hand, suggested the NTP suit may have highlighted the fact that RIM is no longer the only game in town.

“If you talk to the major players in this space, the majority would say that Microsoft is the safest bet right now,” he said. “Their new application server has the free embedded push capability that the BlackBerry has always had. It’s only a matter of time before organizations start looking at that.” 

Legal experts said the case brought an unusual amount of attention to patent disputes, which could influence the way companies manage their intellectual property from now on.

“How much resources do you devote to the due diligence? It’s really up to the company or the investors how much they want to do, and the result of this may be to spur those new entrants into spending a little more money on this,” said Rory Radding, a senior patent attorney at New York-based Morrison & Foerster.

“There’s never a 100 per cent assurance – the world doesn’t work like that — but from a businessman’s standpoint, the more information you have, the better that decision can be.”

Don Cameron, a partner in charge of the intellectual property group at Toronto-based Ogilvy Renault, said the case provided a warning to Canadian firms that want to expand their client base beyond our borders.

“One of the eyebrow-raisers of this case was you had a U.S. patent on a system that was operating partly outside of the United States,” he said. “It showed you that just because you think you’re doing business in Canada doesn’t mean you might not be in the jurisdiction of the U.S. courts.”

Cameron said the U.S. Trademark and Patent Office took two and a half years to “do nothing,” which may have hurt RIM as it tried to fight back.

“They sat on their re-examination proceedings while the lawsuit was progressing instead of figuring out sooner that the NTP patents were not worth the paper they were printed on,” he said.

Radding said he expects the patent proceedings to continue, even if it comes to an internal patent office appeal, though he didn’t think NTP had much of a chance. “Early indications are that many, if not all the patents are unpatentable,” he said.

Cameron said the U.S. legal system is going to look more closely at the impact of “trolling” patent portfolios held by companies that, like NTP, do not offer products of their own. “In the old days, if you had a patent, you could expect to get an injunction to stop your competitor,” he said. “Now they have to look at what happens when you’ve gathered otherwise unused patents and use them as roadblocks to other people’s business.”

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