Millions of BlackBerry users collectively breathed a sigh of relief after Research In Motion (RIM), the maker of the highly popular e-mail gadget, narrowly averted a shutdown by settling a bitter patent lawsuit. It was alleged by NTP, a small patent holding firm in the US, that RIM had infringed its wireless e-mail patents. There were indications that NTP would be able to obtain injunctions from the court and, thus, force RIM to suspend its BlackBerry services, much to the anxiety and worry of its users in the US. BlackBerry is a very popular tool used for mobile e-mails, and several organizations and professionals have come to depend heavily on the device for smooth functioning of their businesses. A shutdown of the services meant a disruption in their business operations. Fortunately for them and unfortunately for technological companies, RIM agreed to pay NTP $612.5 mn for a permanent license of all the wireless e-mail patents. While the settlement between RIM and NTP has, no doubt, brought a lot of relief to its users, the case, more importantly, has led to a heated debate on the adequacy of existing US patent laws and the increasing need for reforms.
RIM, a Canadian company, invented a successful product called BlackBerry, a wireless hand-held device used to send and receive e-mails in 1999. NTP, a law firm whose assets are virtually the patents held, found that the device infringed upon five of its patents and offered to give license for a negotiable fee. But RIM did not budge, thinking that since it had developed the technology on its own, there was no infringement. However, following RIM's inertness and Blackberry's increasing popularity in the US, NTP sued RIM in 2001. RIM too aggressively challenged NTP at the United States Patents and Trademarks Office (USPTO) claiming that the patents held by NTP were invalid. Also, it fought a legal battle at a federal court stating that NTP had never offered it any license for the technologies. The case was ruled against RIM and the court ordered it to pay $450 mn as royalty. However, during the parallel proceedings, the USPTO had already initiated steps to review the five patents that were at issue. Undeterred by the lost appeal, RIM continued its battle in higher courts and went all the way to the US Supreme Court. Meanwhile, the USPTO has issued a "non-final" rejection for three of the five patents and a final rejection for the other two. Despite the possibility that USPTO may cancel all the patents held by NTP related to the issue, RIM had to succumb to injunction threats and part with an amount that was nearly twenty times the amount it was initially offered.
After resolving all the legal tangles, RIM now has an even tougher task at handthat of reinventing their product. One of the consequences of the lawsuit has been that it brought to the fore Blackberry's competitors. As customers began searching for alternative solutions to their wireless e-mail services amidst all the uncertainty of BlackBerry services, they found similar devices in the market aplenty, which offered more or less the same features. To stand apart from them, especially Microsoft (which is on the verge of launching its own wireless e-mail service) RIM has to add some unique features to its product at the earliest.
Patent laws are supposed to encourage and reward innovations. But in the present scenario, instead of stimulating innovations, they are becoming a hindrance to novelty just as the BlackBerry case has showed. These days technology companies have to crawl through a "thicket" of patents before they can bring their products into the market. Owing to a large number of patents coming up each year, they do not know when they have violated a patent until a court tells them so. In such a legal environment, it is becoming a common practice for patent-holding firms to hold several patents and file infringement cases against the technology companies, which are forced to pay any amount that the patent-holder quotes or face a more expensive legal battle.
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