Blackberry Service Saved by Settlement

The self-important gadget fiends can breathe a sigh of relief. The threat to their precious Blackberries is no more. Research In Motion Ltd. agreed to a $612.5 million deal to settle a patent dispute with patent-holder NTP. Customers can continue to waste hours of one another’s time sending messages that are largely unnecessary.

RIM makes the Blackberry handheld device that sends and receives e-mail, stores one’s addresses and schedule and in general keeps the busy organized. In 2001, NTP filed a patent infringement suit, and in 2002, a jury upheld the claim. For four years, RIM appealed and wiggled to try to get out of the situation.

Last week, thanks in part to Judge James R. Spencer, the parties settled. “He basically questioned the sanity of RIM, and said it wasn’t acting very rationally,” said Rod Thompson, patent attorney at Farella, Braun and Martel in San Francisco in an interview with MSNBC. “His prodding of the parties worked.” In other words, the Judge may have been getting ready to slap further penalties on RIM.

For a full and final settlement, RIM coughs up $612.5 million to NTP. Ironically, about a year ago, the two parties had a settlement for $450 million but that fell apart, some say because RIM thought it was too generous. More recently, RIM claimed to have developed a software workaround that would allow Blackberries to keep working without infringing on the patent held by NTP. The trouble with that is NTP could challenge it in court and tie things up all over again.

By dragging this out, RIM helped keep uncertainty about its technology that deterred corporations from buying it. Further, it ran up its legal fees, and in the end cost itself $162.5 million more than if it had settled a year ago. Perhaps, Judge Spencer was right to question RIM’s sanity.

© Copyright 2006 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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