The Research In Motion and NTP patent dispute provided a few more twists and turns this week as the Supreme Court refused to hear an appeal and a federal court judge set Feb. 24 as a key hearing date.
On Jan. 23, the Supreme Court refused to hear an appeal in an ongoing battle that has loomed over BlackBerry customers for years.
Then on Jan. 25 a federal judge set a Feb. 24 hearing date in the Eastern District Court of Virginia to consider a possible injunction that could shut down BlackBerry wireless e-mail service in the United States.
Whats next? More court hearings. More big headlines. And more big questions facing enterprises as managers ponder what it will mean for business if the BlackBerry goes bust.
With that in mind, heres an FAQ to help you map out a plan.
Whats the back story?
Holding company NTP sued Canadian BlackBerry maker Research in Motion for alleged patent infringement on nine wireless e-mail patents in 2001.
U.S. District Judge James Spencer ruled in favor of NTP in 2003, instructing RIM to halt its sales of BlackBerry devices and services in the United States until NTPs patents run out in 2012.
Spencer stayed the ruling, however, pending appeal. Since then, the case has gone through several appeals and failed settlement attempts.
In the meantime, the U.S. Patent and Trademark Office has been re-evaluating several of the disputed patents for months. The USPTO has indicated that it intends to reject all of NTPs claims eventually, in which the case would be null and void.
Industry experts said the process could take several months, though, as NTP has voiced plans to appeal every decision it can.
Since Judge Spencer ruled against RIM, NTP has secured patent licensing deals with several of RIMs competitors in the remote access software industry, including Nokia in June 2004, Good Technology in March 2005 and Visto in Dec. 2005.
“RIM refuses to take a license and pay NTP,” said Kevin Anderson, an attorney with Wiley Rein & Fielding of Washington, one of the law firms that represent NTP.
“If someone camps on your front lawn and refuses to pay you, you have no choice but to seek assistance in removing the squatter.”
How ugly can this get?
Very ugly. Of the 4.3 million BlackBerry customers worldwide, 75 percent are in North America. For those customers, the worst thing in the near term would be for Judge Spencer to shut down BlackBerry sales and services in the United States, which could happen after the Feb. 24 hearing.
For those who use their BlackBerrys as cell phones, the phone service would remain in place, but the e-mail service would be shelved.
“While removing BlackBerry support from my life does seem very appealing, the truth is this service has become an integral part of our day-to-day business operations,” said Nick Gass, IT manager at Color Kinetics, a digital lighting company in Boston.
“Our sales team relies on their BlackBerry devices as their primary means of contact, and our executive team uses them to an almost manic degree. BlackBerries have become practically indispensable.”
Does RIM Really
Have a Workaround?”>
Should an injunction occur, it is likely that customers would get a little time before a shutdown. In a recent court filing arguing for the injunction, NTP recommended that BlackBerry customers be given a 30-day grace period.
Is there a real workaround?
RIM maintains that the company has tested and readied a legal technical workaround solution that would let the company continue offering its mobile e-mail service even if the judge orders an injunction before the patent office rules.
In an earnings call late last month, RIM Chairman and Co-CEO Jim Balsillie said the company will reveal details of a workaround “very soon” that it could ship latent in future products. Balsillie said a workaround will not violate any of NTPs patents.
Nevertheless, details of this workaround have remained a stubborn mystery.
RIM officials say that they have yet to release the details of the workaround—”for legal reasons,” and so as not to tip a hand to NTP more than necessary. The bottom line is that customers have been left in the dark.
“Nobody knows,” said Alex Kogan, director of network and data center services at Boston Properties, a real estate company in Boston with a deployment of 170 BlackBerrys. “NTP is saying theres no solution that will work without defying the patent. Its kind of a waiting game.”
Will the workaround be pain free?
Probably not. RIMs own court filings indicate that implementing a workaround wont be easy.
“Implementing a workaround requires reloading software on servers and BlackBerry handheld devices,” reads a January 17 court briefing from RIMs legal team.
“This which would likely involve some significant effort on behalf of users and their supporting organizations, which will need to take time to implement the upgrades, and will likely experience typical problems experienced with undertaking upgrades.”
RIM goes on to note that customers could defect to other services rather than install any workaround, which may still be challenged by NTP.
“Injunctions cover all products not colorably different from the enjoined product,” Anderson said. “So, if the workaround is merely to take an existing BlackBerry and call it a RedBerry, then that product would be in contempt.”
Do I need a contingency plan?
A backup plan certainly wouldnt hurt and its a good idea to be aware of alternatives.
Clyde Foster, chief operating officer of Intellisync, which makes server and client-side software that competes with RIMs, said he has seen an increase in interest in piloting his software largely from potential customers in financial services and government.
John Halamka, CIO of Harvard Medical School and Caregroup Healthcare System, a Boston-area hospital group that supports some 800 BlackBerry devices, has explored alternatives even though he thinks RIM will prevail.
“As risk mitigation, Ive tested alternatives such as the [Palm] Treo 700, and they just do not work as well as BlackBerry for high volume e-mail users—600 e-mails a day for me,” said Halamka.
Also, remember that RIMs rivals may not be above scare tactics. “There have been a lot of companies out there trying to profit from this,” Boston Properties Kogan said. “A couple of them have contacted us.”
Indeed, on December 9 the Boston Properties IT team received an e-mail with the subject header “BlackBerry Shutdown at Boston Properties, Inc.”
The sender: the chief software architect at Mobiliam, a mobile computing software company that competes with RIM. Boston Properties CEO was ccd on the message.
Kogan, however, said hell implement a workaround if needed and long-term will consider defecting from BlackBerry, depending on how the installation goes.
One IT manager told eWEEK that while he plans to keep supporting around 700 BlackBerrys on his companys network, he also is rolling out a separate server from Good Technology and buying around ten Treo 700 devices for the top executives.
In case of a BlackBerry shutdown, these executives will be taken care of immediately, and an alternate server will be in place for future Treo deployments.
Will RIM and NTP make up?
Gartner estimates theres a 35 percent chance the two companies will settle and a 20 percent chance RIM will enact a workaround.
Nevertheless, RIM and NTP almost made peace in the past. In March 2005, the companies announced a settlement deal worth $450 million, but the deal fell apart a couple of months later when the companies failed to agree to terms.
Recently, NTP has proposed various licensing plans in court briefings, but RIM officials remain publicly confident that the Patent Office will reject the NTP patents. Still, many customers are banking on the companies making nice.
“Were confident that there will be a settlement,” Kogan said. “RIM wont shut down for that many customers. It would kill their business … It will either be ruled in RIMs favor or there will be a settlement. But if theres an outage, well deal with it accordingly.”