NTP Patent Suit Threatens BlackBerry Service

News Analysis: The favorite mobile e-mail device of professionals everywhere may die on the vine due to an ongoing legal battle.

When the U.S. Supreme Court denied BlackBerry maker Research In Motion Ltd.s attempt to stay NTP Inc.s patent infringement judgment against the company, it also set the scene for BlackBerry service to be potentially turned off for over a million users.

In August 2003 a Federal judge ruled for NTP in its patent infringement case against RIM, manufacturer of the popular mobile device. The court issued an injunction enjoining RIM from selling, using or importing its BlackBerry handhelds and server software in the United States, but stayed that injunction during any appeal period.

The Supreme Courts denial of RIMs application moves the case back to the District Court for reconfirmation of the initial injunction. However, RIM lawyers pointed out that the Supreme Courts refusal to stay the case did not mean a refusal to hear the case.

Still, if the court upholds the injunction, and theres no reason to think that it would not, over a million BlackBerry users could find themselves without service.

/zimages/4/28571.gifClick here to read about how the Supreme Court has been handling the RIM patent case.

Since many professional firms, such as investment banks, law firms and accountants, have made the BlackBerry a key part of workflow, this stoppage poses a large potential problem for these businesses.

RIM itself is maintaining a brave face, issuing the statement, "While RIM maintains that an injunction is inappropriate given the facts of the case and substantial doubts raised subsequent to trial as to the validity of the patents in question, it ultimately will be up to the courts to decide these matters and there can never be an assurance of a favorable outcome in any litigation."

Be that as it may, many BlackBerry users are becoming understandably concerned.

According to Steve Agnoli, CIO of the international law firm K & LNG (Kirkpatrick & Lockhart Nicholson Graham), "We see this as a real issue that could have a significant impact on business and communications within our firm and the business community overall."

A top regional law firm CIO said, "Many of our lawyers live and die by their BlackBerries. Theres even a nickname for them: CrackBerries, because youre always using them. If the service was cut, [the lawyers would] be a lot less productive."

Or as Agnoli said, "The BlackBerry platform is used extensively by lawyers and staff throughout all offices of the firm. It is well integrated with our messaging system and has become a key extension of that platform … An interruption to BlackBerry service would require us to look for an implement alternatives to maintain functionality and connectivity."

Will the service be cut? Thats the $64,000 question.

"There is a very realistic possibility, in the absence of some other action on RIM or NTPs part, that the injunction will be enacted," Agnoli said.

The managing partner of a West coast law firm agreed. "At the very least, NTP needs to show RIM that if push comes to shove theyre willing to go to court to get the service cut if RIM doesnt cave in."

/zimages/4/28571.gifRIMs BlackBerry gathered both allies and rivals at CTIA. Read more here.

"As with all things legal, The Magic 8-ball is uncertain," said Richi Jennings, a practice leader for leading e-mail research house Ferris Research.

Still, Jennings said, in the "worst case, [users] stop being able to get e-mail that way. They may say they live and die but nobodys going to get killed … Alternatives are SMS [Short Message Service] text messaging and/or mobile net access. For example, users of devices such as the Palm Treo can send and receive e-mail wirelessly with several different programs. SMS can be an adequate substitute for push e-mail."

However, Jennings doesnt predict that RIM will surrender to NTP to prevent this worst-case scenario. "As RIM points out, All of the NTP patent claims have now been rejected by the Patent Office in its initial rulings in re-examination proceedings."

Others think, however, that RIM will come to an agreement with NTP before BlackBerries across the United States go black.

John Tredennick, CEO of CaseShare Systems Inc. and former litigation partner at the law firm Holland & Hart LLP, said, "I believe RIM will blink and enter into a settlement that will allow it to continue its services. Litigation is about brinkmanship and eventually somebody blinks."

And the impact on professional firms? "None, if I am right. Otherwise, lawyers and other professionals [who] have become addicted to mobile e-mail … will quickly switch to the next best alternative. Treo will certainly benefit from this development, as will others," Tredennick said.

Some businesses arent waiting to see how it plays out. These companies are already looking for alternatives.

"In the short term, we are looking at enhancing current in-house systems that provide wireless e-mail access. We have also moved up plans to review and evaluate alternative platforms, including Windows Mobile 5.0," Agnoli said.

Besides Exchange Server 2003 and Windows Mobile 5.0, "here are other solutions that work with Palm Treo, Kyocera and Samsung devices. These work not only with Exchange but also with servers such as Scalix," Jennings said.

In K & LNGs case, Agnoli said, "We are close to having short-term solutions ready to go should they be needed."

Other companies may not be so fortunate. As CaseShares Tredennick said, "I think most firms are ignoring the situation for now. They will wake up grumpy if the injunction actually issues."

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