Concerned RIM Users Make Contingency Plans

Research in Motion customers, increasingly frustrated by the lack of resolution of the patent dispute involving BlackBerry service, consider wireless e-mail alternatives.

The Supreme Courts official refusal Monday to intervene in an ongoing patent battle over the future of the BlackBerry wireless e-mail service has left millions of customers faced with the definite possibility of losing BlackBerry service in the United States.

And for millions of Research in Motion customers, a frustrating waiting game continues. Loyal BlackBerry customers have become increasingly concerned about the future of their wireless e-mail service since patent-holding company NTP sued RIM for alleged patent infringement in 2001.

Many say they remain hopeful that they wont have to make contingency plans, but are looking into such plans just the same.

"Weve definitely heard from customers who werent customers before," said Clyde Foster, chief operating officer of Intellisync, which makes server and client-side software that competes with RIMs. On Monday Intellisync announced a new mobile suite for IBM Lotus Notes and Domino 7.

"There are customers reaching out to us, to pilot our product, and to get comfortable with our product; I would classify it as contingency planning," Foster said. "The ones that weve gotten the most inbound questions from are financial services and government."

Some RIM customers are even making their own appeals to the legal system.

"I provided an extensive declaration to the District Court as to the harm which would occur to our health care enterprises if BlackBerry service was eliminated," said John Halamka, CIO of Harvard Medical School and Caregroup Healthcare System, a Boston-area hospital group; Halamka takes his own BlackBerry mountain climbing.

"The threat of shutdown is concerning, but I believe BlackBerry needs to be maintained in the interest of public safety. Im confident that RIM will prevail in the long term. 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," Halamka said.

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 failed settlements and appeals, including RIMs appeal to the Supreme Court.

"RIM has consistently acknowledged that Supreme Court review is granted in only a small percentage of cases, and we were not banking on Supreme Court review," said Mark Guibert, vice president of marketing at RIM.

/zimages/4/28571.gifClick here to read about the U.S. Patent Offices rejection of patents in the BlackBerry case.

But because the Supreme Court has refused to hear the case, the District Court is still free to issue an injunction.

And the waiting game goes on. Both RIM and NTP have filings due at the District Court by Feb. 1, after which the Court will set a date for further proceedings. At some point, the Court also will decide whether to go forward with an injunction that could shut down BlackBerry service —at least service as it currently exists.

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 does go forward with the injunction.

In an earnings call late last month, RIM Chairman and Co-CEO Jim Balsillie, in Waterloo, Ontario, said the company will reveal details of a workaround "very soon," that it could ship latent in future products and that the workaround is "different at the absolute fundamental aspect," meaning it will not violate any of NTPs patents. But RIM remains vague on the details.

And for legal reasons, both RIM and NTP continue to stay tight-lipped on any imminent plans for a financial settlement.

In the meantime, the U.S. Patent and Trademark Office has been evaluating the validity of NTPs patents; the office initially rejected NTPs claims in March, and it has been re-evaluating them for months. The Patent Office has indicated that it intends to reject all of NTPs claims eventually, in which the case will be null and void.

/zimages/4/28571.gifBlackBerry adds on Google IM and Google Maps functions. Read more here.

RIM officials continue to maintain that the Patent Office will eventually shut down the case. Industry experts say the process could take several months, though.

"Despite the Patent Offices dedicated re-exam group, I would expect that [a ruling by the Board of Patent Appeals and Interferences]—the final agency decision—will not occur in this case until around October," said Stephen Maebius, an attorney at Foley & Lardner, in Washington, who worked at the USPTO in the early 1990s.

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