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TECHNOLOGY BREAKDOWN: Blackberries An Endangered Species?
It seems like every day lately, whenever I check my email with my Blackberry, someone asks me whether I will be affected by an injunction that could be filed against Research In Motion (RIM), the Waterloo, Ontario based manufacturer of the Blackberry brand of wireless devices.
If you haven't yet heard the whole sordid mess, here it is in a nutshell: RIM is the defendant in a patent infringement case brought against it by NTP, a McLean, VA based corporation. In November 2002, a Virginia jury ruled that RIM had infringed on five patents held by NTP covering the delivery of electronic mail messages to wireless electronic devices. In the wake of the decision, on January 13, 2003, the U.S. Patent and Trademark Office (www.uspto.gov) announced it would conduct a review of the NTP patents. In August 2005, NTP won an injunction against RIM to shutdown the Blackberry service, pending an appeal by RIM. At the outset of the lawsuit, NTP requested a $475 million settlement payout from RIM which RIM rejected, figuring that a jury would never decide for the plaintiff whose patent claims were based of the shakiest of grounds.
When the U.S. Supreme Court refused to stay the case on October 26, 2005, RIM decided to accept the earlier settlement offer, but NTP rejected RIM, figuring it would receive a bigger payday by shaking RIM down for royalty payments to keep the Blackberry service live. When the settlement was voided by yet another judge on November 30, 2005 it looked like it the beginning of the end for the device also known as the “Crackberry”. On December 14, 2005, the U.S. Patent Office announced it would expedite its review of the NTP patents. Last Wednesday, (February 1, 2006), after three years of review, the Patent Office rejected the last of the five patents alleged to have been infringed on by RIM.
Case closed, right? Crackberry users breathe a sigh of relief, yes? Well, not exactly. There's a reason why Don King says “Only In America”, and the NTP-RIM fiasco is a good example why. You see, even though NTP's patents have been rejected by the US Patent and Trademark Office, that decision may be appealed by NTP, delaying the final rejection of its patents. This means that for the purposes of its legal proceedings against RIM, those patents are still valid, even though the patents have been tossed out by the Patent Office. I'm half expecting to see that “static 'lectricity fro” pop up anytime now.
The RIM-NTP affair is the latest manifestation of everything that is wrong with the system for granting patents. During the internet boom, nearly every “dot-bomb” company flooded the U.S. Patent and Trademark Office with frivolous patents on everything from practices for conducting business over the internet (Priceline and eBay stand ), to the systems architecture for doing electronic commerce (Amazon.com settled a patent infringment suit in March 2002 against Barnes and Noble over its “patented” 1-click checkout system). While not a new practice, the internet boom ushered in a new generation of “patent trolls” -- individuals and companies that patent implementations of obvious concepts for the purpose of protecting what they know to be fragile market positions. According to a report in the January 17, 2006 issue of the Wall Street Journal, the number of patents filed with the U.S. Patent and Trademark Office has exploded from 126,000 in 1985 to 409,000 in 2005. Jon Dudas, undersecretary of commerce for intellectual property and director of the patent office was quoted in the WSJ article saying that "Over 80% of all the claims brought to the office are rejected in the first action" .
Because, as Dudas points out, "Much of the growth of our economy comes from growth in intellectual property”, the U.S. Congress [finally] decided to get involved in reforming the patent process with the introduction of legislation, HR 2795, The Patent Act of 2005, and SB 2109, The National Innovation Act of 2005. The bill adopts many of the recommendations proposed by the American Intellectual Property Law Association (AIPLA), whose recommendations can be found on the web at www.promotetheprogess.com/archives/2005/02/a_patent_reform.html.
In all likelihood, when the judge overseeing the injunction hearing in the NTP-RIM case reconvenes on February 24, 2006 the news of the USPTO's rejection of all NTP's claims should carry enough weight for the judge to move to stay the injunction pending NTP's appeal of the Patent Office's decision. As for Blackberries being added to the endangered species list, Jim Basillie, RIM CEO states that the company does have a contingency plan in place in the event that the patent office does not get its job done in time, this in the form of a software workaround. Even so, I personally have been working on my own Java (J2ME) based email client that will use the networking capabilities of my Blackberry phone to access my email servers in the same manner as any other computer to get around the now toothless NTP patents. In granting patents, the government examiners are supposed to look at patentability, and non-obviousness in the claims made on an application. How the NTP patent got approved initially is beyond me.
If as Undersecretary Dudas, and countless proponents of offshoring like to point out, that innovation and intellectual property are the fuel for the engines of continuing economic growth, the NTP-RIM affair should be a wake up call to show just how difficult the business of innovation is. If the proponents of offshoring really believe that the jobs they export will be replaced by new jobs driven by innovation, then we are on a collision course with a dire economic crisis.
Russell de Pina is a Principal for n2active, a technology consulting firm located in Long Beach, CA and Houston, TX. No stranger to the patent process, Russell was issued patent # 4,571,724 for a system to test programmable logic devices in 1986. That patent will expire later this year. Russell can be reached by email at rdepina@n2active.com
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