RIM Outlines Patent Workaround Plans

by Glen Shapiro, LawAndTax-News.com, New York

14 February 2006

Technology firm, Research In Motion on Thursday provided an update in the patent litigation between RIM and NTP, Inc.

In anticipation of a possible injunction against it, RIM revealed that it has developed and tested software workaround designs for all BlackBerry handsets operating on converged voice/data networks in the United States.

Although there is no injunction in place, and RIM believes it has strong legal and factual arguments opposing an injunction, RIM has developed these software workaround designs as a contingency to allow BlackBerry service to continue should the courts force it to stop using the patented technology in the current dispute.

The patent fight has centred on RIM's use of technology in its BlackBerry devices to send email wirelessly and automatically, and without a need to manually retrieve messages.

After US District Court Judge James R. Spencer ruled against enforcing the $450 million deal made last March between RIM and NTP to settle their lawsuit, the latter, in December 2005, came up with an offer worth twice as much - $900m.

NTP reportedly stated late last year it would accept a payment equal to 5.7% of BlackBerry's expected revenue in the US until 2012 - when its patents expire, which would add up to $900m according to market analysts.

RIM, however, has offered a much lower figure.

“RIM remains pragmatic and reasonable in its willingness to enter into a settlement that would generously compensate NTP while protecting RIM’s business and partners,” explained Jim Balsillie, Chairman and Co-CEO at Research In Motion last week. He continued

“NTP’s public offer of a so-called ‘reasonable’ license, however, is simply untenable. It comprises illusory protection for RIM and its partners and requires a lump-sum payment for the theoretical life of the patents even though the US Patent Office is expected to nullify them.”

“RIM’s workaround provides a contingency for our customers and partners and a counterbalance to NTP’s threats. This will hopefully lead to more reasonable negotiations since NTP risks losing all future royalties if the workaround is implemented.”

With regard to the software workaround, RIM revealed that it has commenced the network certification process required for all software updates and will soon begin to ship the new software latent on new handsets in addition to making the software update generally available on the internet.

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