BlackBerry CEO John Chen over the past several months has made software licensing a key part of his efforts to drive revenue in the struggling mobile device maker, saying he wants to better monetize the company's more than 38,000 patents.
Now BlackBerry is suing Avaya, claiming the networking and communications technology provider has infringed on eight of its patents. According to a lawsuit filed in U.S. District Court in Texas late last month, Avaya is using BlackBerry technology in an array of its offerings in such product lines as unified communications (UC), network switches and routers, communications servers and client software, telepresence video conferencing systems, and software for mobile device communications.
In the 115-page lawsuit, BlackBerry officials said that "Avaya infringes multiple BlackBerry patents by using, without authorization, BlackBerry's proprietary technology in a number of Avaya's commercial products and services. … By this action, BlackBerry seeks to put an end to Avaya's unlawful conduct."
Specifically, BlackBerry officials are claiming Avaya is infringing on eight patents that were issued between 1998 and 2011. They cover a range of capabilities, with two concerning what the company refers to "significance maps" for coding video data. Others touch on features for displaying messages, determining the location of mobile devices, decoding and compression of speech, call routing, cryptographic public keys, and wireless phones and PBX networks.
BlackBerry officials reportedly contacted Avaya about the disputed patents in December 2015. Avaya officials have not commented on the lawsuit.
The filing comes as BlackBerry officials continue to look for ways to shore up the financial picture of a company that at one time was a top-tier mobile phone maker. However, it has since been surpassed by Apple with its iPhone and other smartphone makers—such as Samsung—that run Google's Android mobile operating system. In early 2006—before Apple released its first iPhone—half of all smartphones sold were BlackBerry devices. Three years later, BlackBerry held just 20 percent of the global market.
In recent years, BlackBerry officials have put a greater focus on the company's software capabilities. In the most recent financial quarter, BlackBerry generated $424 million, 39 percent of which came from software and services and 25 percent from service access fees. Thirty-six percent came from mobility solutions.
The company also lost $670 million during the three months, more than the $238 million it lost in the previous quarter.
During a conference call June 23 to discuss the financial results, Chen spoke about efforts to focus more on licensing its patents to smartphone and other device makers to help grow revenue. He talked about the move to create a software licensing program within the company's Mobility Solutions Business, an initiative that was officially launched Aug. 3.
"A lot of the good stuff that we do in devices like the BlackBerry Hub, some of our antenna technology, power management technology and the software, the list goes on. … I'm willing to license to other OEMs, phone manufacturers, device manufacturers, even equipment people," Chen said, according to a transcript on Seeking Alpha.
However, he pushed back at the idea that BlackBerry could shed its mobile device business while growing the software licensing efforts.
"I really, really believe that we could make money out of … our device business," Chen said, adding that the software and licensing efforts were created to augment the device unit. "So let's see how we could develop this. As I told everybody, I think within a couple of quarters we will be making profit in the whole Mobility Solution Group."
That determination to continue building devices was evidenced by the launch last week of the DTEK50, a highly secure touch-screen Android smartphone that doesn't include BlackBerry's well-known QWERTY keyboard. It's the company's second Android phone, and it will go on sale Aug. 8 for $299.