For updated coverage of the RIM/NTP lawsuit and its effect on BlackBerry users, read our current stories:
- Crunch time for BlackBerry users
- BlackBerry workaround could leave users hanging
- Cost of abandoning BlackBerry can be terrifying
Research In Motion Ltd. has been busy lately, and not just with its product line. The company faces an ongoing patent violation fight, a handful of other legal tussles and growing market competition -- yet it still dominates the enterprise mobile messaging market.
RIM's top priority recently has been a suit filed by intellectual property holding company NTP Inc. of Arlington, Va. It claims that Waterloo, Ontario-based RIM's popular BlackBerry mobile messaging device and related software violate patents registered by NTP's founder in the early 1990s. RIM was ordered to stop selling its BlackBerry device in the U.S. and pay NTP approximately $54 million in damages, but the company was recently granted a temporary reprieve, pending an appeal.
Since that appeal process is likely to last for months or years, customers shouldn't urgently seek out RIM alternatives, said Todd Kort, a principal analyst with Stamford, Conn.-based Gartner Dataquest.
Patent patience According to Gartner Dataquest's Todd Kort and various documents associated with the Research In Motion Ltd. case, the patent in question relates to work that NTP Inc.'s founder, Thomas Campana, did in the late 1980s as a subcontractor for AT&T Corp. AT&T wanted to add wireless e-mail features to its new Safari laptop computer, which it had acquired as a part of its purchase of computer maker NCR.
Campana had developed and patented a method of sending e-mail messages to wireless pagers, and it was a natural fit for AT&T. However, at the last minute, Kort said, AT&T decided not to use Campana's technology, and he lost a considerable amount of money as a result.
"So Campana and his guys sat on the [patents] for years," said Kort, until his holding company, NTP, contacted RIM in January 2000 regarding the patents. However, RIM claims that NTP "did not readily demonstrate any support for potential patent infringement." NTP filed suit against RIM in 2001.
"It's a little bit distasteful," Kort said of NTP's patent crusade, which he said is likely to extend beyond RIM to other companies with similar technology.
"What's happening is NTP is going back in time, asking people who have theoretically been violating their patents to pay up."
"I would recommend people stay with RIM if they're happy with them, because Good [Technology Inc.] and its licensees are the only viable option on the horizon as far as a really good, solid alternative enterprise [mobile] e-mail solution," he said.
Kort added that RIM's strategy will likely be to drag out the appeal process as long as possible, because that would allow the company to continue selling its products while reworking them to avoid infringing upon NTP's patents.
The company isn't in any immediate financial danger either, he said, because it has more than $300 million in cash on hand. If RIM is forced to dole out a large cash settlement, it will have plenty left over to pay its own bills and sustain its business.
RIM is fighting several other legal battles as well. It filed suit against Xerox Corp. last month to prevent the document technology company from demanding patent royalties. It is already involved in litigation with rival Good Technology Inc. over alleged stolen trade secrets.
Though the NTP case threatens the company's core business, Kort called some of RIM's legal entanglements "frivolous," including one dispute with Handspring Inc. involving a keyboard patent.
Still, even if RIM's legal battles aren't directly harming the company's products, Kort said, they are digging into the company's profits. He estimated that its legal fees and other related costs during the past year alone could reach $100 million.
Another indirect consequence of the lawsuits is that RIM is unable to focus all its attention on staying one step ahead of its competitors. Kort said one competitor in particular, Good, has been gaining momentum.
Good offers a mobile messaging service similar to RIM's called GoodLink, which Kort said is used by approximately 1,200 enterprises. While that number pales in comparison to RIM's 12,000 customers, Good is seen as an appealing alternative to RIM because RIM requires the use of a dedicated server and has been slow to allow third-party application development.
What makes Good more compelling to some RIM customers is the fact that, with relative ease, Good's software can be loaded onto BlackBerry devices in place of RIM's software, "so there are thousands of people using a BlackBerry device with Good software," said Kort.
Soon Good may not need RIM's devices at all, since earlier this year the company began offering its own G100 handheld device in conjunction with Cingular Wireless. Plus, it is working with Palm to engineer its software for the Palm OS-based Treo 600, and with Dell Inc. to develop a competing device based on Microsoft Corp.'s Pocket PC operating system.
An IT manager at a large, multinational law firm who spoke on condition of anonymity, said her company used Good's product and then switched to RIM because of compatibility problems in its global operations center.
She said she hasn't been following RIM's legal battles very closely, though if her company has to switch away from RIM unexpectedly, such a move would be difficult but "would not be insurmountable."
"It'd be murder on the IT staff," she said, because about a dozen people are charged with supporting several hundred end users, not all of which are using BlackBerry devices that would be compatible with Good's software.