BlackBerry users to get 30-day warning of shutdown

Out-Law News | 20 Jan 2006 | 12:06 pm | 2 min. read

BlackBerry users will receive 30 days' notice to find another wireless email provider before the service is shut down – unless the manufacturer, Research In Motion (RIM), can agree settlement terms with patent holder NTP Inc.

In a court filing yesterday, NTP asked the court to "promptly" grant a permanent injunction on RIM's "continuing and massive wilful infringement" of three NTP patents – i.e. switch off email on BlackBerry devices that operate in the US.

NTP offers an exception for any government worker who uses a BlackBerry. A recent court case means that if RIM could demonstrate that an injunction "frustrates an important public need for the invention, such as the need to use an invention to protect public health," it could block the injunction.

RIM says it would be "extraordinarily impractical, if not impossible" to identify and protect government users when switching off others. It warns of chaos.

NTP also wants damages from the Canadian company. It has demanded $126 million and a 5.7% royalty on RIM's revenues from BlackBerry sales and services.

NTP does not make any products. The Virginia company, founded in 1992, has a suite of wireless email patents and no other assets. Many critics of its battle against RIM say that NTP should not be granted an injunction because any infringement is not damaging sales of an NTP device.

But NTP disagrees. It has suffered "very substantial harm," it says in yesterday's filing. "Litigation against RIM is demonstrably costly, time consuming and emotionally draining for NTP's principals," it wrote. "NTP's inventor, Thomas Campana, is now deceased – without ever receiving any compensation from RIM for its misappropriation of his inventions…" And time is running out: Campana's wireless email patents will expire, one by one, over the next six years.

The 38-page filing comments: "The effect of the injunction will be to stop the wide-scale infringement of NTP's patents by the law firms, investment banks, and Fortune 500 companies that comprise the vast bulk of RIM's infringing US customer base."

"RIM must simply turn those accounts off in the same fashion as when a customer fails to pay its bill," it continues. "The grace period of 30 days provides more than adequate time for RIM's current customers to switch to alternatives."

RIM argues that there are no suitable alternatives. It says none of its rivals has the same combination of security, functionality and global reliability. The BlackBerry is unique, it says.

But without an injunction, NTP will struggle to license its patents to others in the industry. The company has sold three licences recently; but it says that many others refuse to enter serious negotiations, "as long as RIM – the '900 pound gorilla' in the wireless email industry – is free to continue misappropriating the patented Campana technology."

NTP accused RIM of profiting from as much delay in the litigation as possible. It said RIM is to blame for any "discomfort" to its customers caused by a network shutdown. "NTP is a reasonable business entity that is willing to resolve the dispute between the parties and provide for 'global peace' going forward," it wrote.

In 2003, a jury ruled that RIM was infringing NTP's patents wilfully. NTP points out that RIM has grown its customer base from 200,000 at the time of that verdict to three million subscribers today.

RIM, meanwhile, asked the court not to impose a shutdown, given the "exceptional public interest" in the continued and uninterrupted availability of the system. NTP, it argues, can be more than adequately compensated by on-going royalties. It wants a new trial to determine the damages payable. It also expects the US Patent and Trademark Office to finally reject all patent claims at issue in the case in a matter of weeks.

If it is forced to shutdown, RIM says it will modify its products into non-infringing alternatives. It does not want to have to do this because the reloading of software on servers and the handheld devices would be a major upgrade undertaking for users' organisations. And if that happens, RIM expects some customers to opt for other providers instead – particularly in light of NTP's threats that even RIM's workaround will infringe the patents.