Gartner Inc. warned Research In Motion customers to avoid deploying or investing in BlackBerrys until the smoke
clears in a back-and-forth patent infringement suit against the Canadian company.
The stern warning comes a week after a U.S. Federal Court judge denied RIM's motion for a stay of proceedings in the four-year-old patent infringement lawsuit filed by NTP Inc. RIM requested the delay pending a re-examination of NTP's patents by the U.S. Patent and Trademark Office. The court also ruled on Nov. 30 that a $450 million settlement agreement the two companies reached in March is invalid.
Additionally, NTP has asked the judge to issue an injunction that would shut down BlackBerry sales and service in the U.S. until the case is resolved. The judge has said he will weigh that possibility.
For the last week, however, RIM has remained relatively closed-mouthed, issuing a brief statement saying it will appeal the judge's decisions and continue to fight. The Waterloo, Ontario-based company has also indicated that it has created and tested a software workaround that it would implement if service was ever halted. The workaround, RIM said, will bypass the disputed patents. However, the company will not discuss it further unless customers agree to keep the information confidential.
"RIM claims its workaround is legally sound, but its history in the courts does not inspire confidence," according to Gartner. "Moreover, end-user validation and implementation would take time, resulting in temporary loss of service."
Non-disclosure of the workaround is also a bone of contention for Stamford, Conn.-based Gartner, which is advising BlackBerry users to "demand that RIM's workaround plans be made available -- in detail and in public -- and carefully review their legal and operational impact." Gartner also cautioned customers not to sign any agreements that could get them involved in the legal dispute.
The potential for a BlackBerry lockout has sent corporations that rely on the mobile messaging and other services into a frenzy. Experts said some are investigating alternatives, while keeping tabs on the latest legal developments.
SearchMobileComputing.com contacted several companies that use BlackBerrys for day-to-day business. None would comment and several didn't return phone calls or e-mails.
Daniel Taylor, managing director of the Mobile Enterprise Alliance, said RIM is keeping its customers in the dark about the workaround, and the ones that are up-to-speed are legally bound to withhold information.
"RIM is briefing their top enterprise accounts under NDA, so there's a reason why everyone is tight-lipped," he said. "There is nothing that they can legally tell you or me for that matter."
On his Mobile Enterprise blog, Taylor examined the potential workaround further and wrote "it is unclear how long it would take RIM to deploy this workaround in major corporate customers. These things generally take time and most companies don't want to install new, untested software into 'live' production environments without testing. RIM is reportedly trialing the workaround software internally."
Taylor's blog continued, "It is also unclear whether the workaround violates NTP's other patents. My guess is that RIM will violate another set of patents and will use the added litigation time -- two to three years -- to continue to try this case in the court of public opinion."
Because of the uncertainty, Gartner is urging BlackBerry users to consider alternative solutions for mission-critical applications. Alternatives, however, could create unnecessary transition costs if the case is settled. But not seeking an alternative could result in outages of unknown length, Gartner said.
Some BlackBerry competitors, taking the strike-while-the-iron is-hot approach, are already trying to capitalize BlackBerry users' anxiety, peddling their alternatives.
This week, Notify Technology Corp. rolled out NotifyLink Enterprise Edition. The company said the product synchronizes e-mail, calendar, contacts and task information and is "a viable solution for those organizations looking for an enterprise alternative or backup plan using their installed base of BlackBerry devices from Research In Motion." Other BlackBerry competitors, like Visto and Intellisync, also released new mobile e-mail products this week, though they aren't billing them as BlackBerry replacements.
But Gartner cautions that some services similar to BlackBerry could also face patent infringement claims from Arlington, Va.-based NTP. Taylor agreed, noting that RIM's partners, including wireless operators, independent software vendors (ISVs) and professional service companies, could feel the hardest impact if RIM loses in court.
"There are other companies making money off BlackBerry, and because RIM doesn't own their intellectual property, NTP has a claim against these other businesses," Taylor said.
RIM's various partners make money from parceling out BlackBerry and could, in turn, owe money to NTP depending on the case's outcome.
"Long story short, RIM may directly owe NTP $450 million or thereabouts, but NTP has claims against every company in RIM's ecosystem, and the value of this claim is likely in excess of $1 billion," Taylor said, later adding, "If RIM's partners find themselves in a patent infringement lawsuit because RIM doesn't own their own [intellectual property], then RIM's entire partner business will fall apart."
Taylor said companies he's been in touch with are formulating contingency plans and the "partners are freaking out" because they could face lawsuits from NTP and then from customers who have their service shut off.
"Let's look at it this way, maybe an enterprise can make do without BlackBerry," he said. "Maybe BlackBerry is nice to have but not mission-critical for many IT organizations. But what about a small ISV or reseller that is building a business around BlackBerry? What will that company do when NTP knocks on their door asking for a license fee? Suppose that ISV has already paid RIM $20,000 to participate in the company's partner program. What happens when they have to pay NTP an ongoing percentage of all sales, or an up-front payment that may be 30% or 40% of annual corporate revenues?"
Still, Gartner predicts that RIM and NTP will reach a settlement within three weeks and that any negative impact the agreement would have on RIM would be minimal. If the process continues to be battled out in court, Gartner said it could take years before it is resolved.