The pocket e-mail device has completely shifted the way corporate America functions, connecting lawyers, bankers and executives to their work anywhere they go. The clear market giant is the Canadian creator of the Blackberry, Research in Motion (RIM), though their position is tenuous, with the fate of their dominance resting on a patent ruling.
The suit began when NTP, a patent holding company, filed a claim against RIM, stating that the company was infringing on a patent for primitive wireless e-mail functionality. Since the 2001 filing, the two companies have been in and out of court, most notably in a 2003 injunction which would have forced RIM to cut a deal, which they are currently appealing.
On Friday when Judge James Spencer issued a reprieve, he criticized both parties in the long standing suit. Lawyers from both sides are in discussions to determine what type of settlement will be reached, and are negotiating damage payments.
This is seen as positive for RIM, whose shares exploded 11.5 percent on Friday on the news. The company has also discussed a possible way around, which would make use of a different type of technology to power the e-mail capabilities. However there is some question as to the robustness and functionality of the patch.
RIM has continued to produce more and better devices throughout the entire litigation process, and now more than three million Americans own a Blackberry. The success of RIM is so phenomenal that in only a few years, their devices have transitioned from a niche of corporate workaholics to now marketing to the soccer mom crowd.
The secret to their success is the flawless integration of powerful e-mail capabilities. With both a sound interface and the ability to instantly access and respond to e-mail, Blackberrys have taken the cell phone to an entirely new level. After developing an incredibly lucrative product, they were able to successfully market an industry changing device.
The way the case is playing out, however, a ruling here will extend beyond impacting Blackberry addicted executives and could affect the way patents are used as part of strategic business plans.
NTP is essentially a parasitic shell of a company, which only holds patents with the idea of profiting off other companies success. It never made an attempt to actually produce a wireless e-mail device, but merely patented the idea.
Patent law in the United States has always been extremely contentious, and the tendency has always been to strongly protect the holder. The logic behind this is to protect the inventor from others infringing on their developments. However, in the instance of RIM v. NTP the technicality of the law is working against the successful entrepreneur.
There is no question that RIM developed their product independently. NTP simply was holding the patent, and waiting for a profitable company to introduce a similar product.
This has become an increasingly popular tactic, with nearly three thousand multimillion dollar patent suits filed each year. While many represent valid claims against patent infringement, "patent trolls" such as NTP are becoming more common.
It is clearly in the interest of entrepreneurship, innovation and free market capitalism to protect the inventor with strong patents. However, there needs to be much greater attention paid to the way that patents are handed out.
The U.S. patent office must be extremely careful not to issue patents which are not specific enough, or for something which is obvious. This has become increasingly difficult however, as the number of patents granted since 1980 has quadrupled. Inspectors are only able to spend approximately 15 hours studying the validity of a patent, and there is no provision to grant extra analysis for industrially significant applications.
For RIM, a relatively loose existing patent has constantly been a thorn in their heel, plaguing their expansion. It is disappointing to see companies which are able to successfully produce and develop innovative products hampered by legal technicality.
Depending on the outcome of the coming final ruling, RIM may end up paying for infringements which it questionably committed. Patent law must undergo a major change in order to fix many of its weaknesses. In the future, patents must be strongly enforced, though to earn this protection, they must be critically evaluated throughout the process.
