BlackBerries: Should RIM just settle?

Posted By on February 24, 2006

UPDATE as of 2/24/2006 -15:30 EST: Judge James R. Spencer of Federal District Court in Richmond, declined to rule on an injunction that would shut down Research in Motion’s Blackberry service. The judge indicated that he was disappointed that the companies had not been able to reach a settlement.
As the Blackberry (RIM) situation continues many investors and ‘crackberry’ addicts wish RIM’s chairman Jim Baisillie would just pay up. I’ve commented on the story as what this patent infringement case is about. From the laymans perspective, Mr Baisillie seems to be using the slow wheels of the legal system to give his company time to work out a technical solution. According to RIM, their ‘workaround’ solution is already in place and they are prepared in case the ‘off’ switch is thrown.
Blackberry SituationCompetitors like Palm and others are seeing improving sales of their products, partly through aggressive advertising by their cell phone partners and adopting the windows operating system on their popular Treo 700w. Ken Wert was on CNBC’s Squakbox this morning and commented on how the RIM/NTP wrangling has impacted Palm’s business. The question arises if they can handle a switch if corporations decide to toss their Blackberrys. (listen to short mp3 clip)

A little more history:

Don Stout and the late Thomas Campana developed a way to send emails wirelessly in 1992. Their patent for this “push” email technology was upheld by Judge Spencer in a suit filled again RIM in 2001 in a ruling in 2002. The jury determined RIM had violated NTP’s patent and ordered RIM to way $53.7 million. (8.55% royalty on US Blackberry sales and service) Of course this was challenged by RIM in appeal which the Supreme Court refused to hear. Back to Judge Spencer — so RIM decides they will attempt to postpone (IMHO to develop a workaround) by filing another suit challenging the validity of the original patent held by NTP … which conveniently could take another year to come to court.

In the technology world this time frame only seems to favor RIM as the original suit was filed in 2001 and now they are talking adding another year to 2006? Five years will have gone by with RIMs’ engineers working on a internal solution. Judge Spencer is not too happy with this and will hold a hearing Friday on the injunction. He could rule immediately, or take more time to consider the case. RIM says it has a software “workaround” that will ensure continued BlackBerry service, but NTP has vowed to challenge such a move.

The biggest fear for consumers is that their blackberries that they pay for will not work. Some are high ranking government officials and others are emergency responders … can you say “class action suit” if this happens? Considering the size of RIM, the popularity of the Blackberry and the cost to continue the legal battle, would you think it is advisable to just pay up?


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