RIM Settles Long-Standing Blackberry Claim

David Jao writes "Research in Motion has agreed to pay 612.5 million dollars for a 'full and final settlement of all claims' resulting from the NTP patent lawsuit against the makers of BlackBerry. According to the article, the settlement is 'on the low end of expectations', perhaps because the patents in question had earlier been preliminarily ruled invalid by the US Patents & Trademarks Office." Many article submitters characterize this move as 'giving in' to NTP's tactics. What do you think?

Comments

I'm confused...

[chill]

...if the patents that based NTP's lawsuit were going to be ruled invalid, what was the basis for the settlement? Why didn't RIM just tell NTP to go fuck themselves and wait for the patent office to finish. No patent == no patent infringement == no lawsuit.

Re:I'm confused...

[jarich]

I suspect that they were bleeding customers like crazy from all the bad publicity and the near shutdowns. I can't imagine how much stress their bean counters were under! ;)

Also, do you really know that the patents were invalid? I haven't looked at it that closely.

Re:I'm confused...

[cyngus]

Simple. The uncertainty surrounding RIM was hurting their business and was going to continue to. By resolving the dispute sooner they keep many customers they might have lost and have a better chance of attracting more. NTP could have kept this dragging through the courts for years and possibly sunk RIM in the process. Gotta love corporate shakedowns.

Re:I'm confused...

[GoMMiX]

Ahhh, but people thought this case had something to it. They had patents. SCO on the otherhand has nothing, and even they know it.

Lets not forget IBM was not losing business at all as a result of SCO's suit against them. SCO's suit against IBM has actually been positive publicity for IBM - that much has been apparent since the day it was filed.

The blackberry, on the otherhand, had a lot of people very concerned given the validity the courts gave to the claims (IE: they already won once).

I guess they won the patent lottery.

[God Virus]

This is ridiculous. Why should a company with only an idea and no product have any claim to over half a billion dollars? It's not like Blackberry stole their idea, right?

612.5 million?!

[BewireNomali]

Low end of expectations? Wow. This justifies patent squatting to the unscrupulous looking for the cash-out.

Re:612.5 million?!

[faedle]

Yep. And it all started when RIM very loudly and publically stated that they would sue others based on their patent claims.

RIM got exactly what they deserved.

Re:612.5 million?!

[tsm_sf]

Yeah, it's like watching the two biggest bullies in school fight each other. It's fun to see one of them get his ass kicked, but you know that the other will still be after you tomorrow.

((man, sometimes I feel like I just post on /. to exercise my analogy lobe))

Re:612.5 million?!

[clem]

Yeah, it's like you're a shark.

Re:612.5 million?!

[augustz]

Hey Faedle,

Someone else who has followed this case from the beginning :) Yep, the patent system is messed up, and some of us remember a lot of RIM claims to litigate others out the market with a similar sets of bogus patents (not even the small keyboard ones).

I think their early IP talk actually popped them up on NTP's radar initially, they were making a lot of noise about it.

They got exactly what they deserved, but the system could still use a fixing, badly.

Disappointed

[OzPhIsH]

I'm pretty disappointed with this move by RIM. I was hoping that by going all the way through the courts we might get some serious patent reform out of the whole mess. While this brought a lot of attention to the issue, I fear that it will just go back to being business as usual at the patent office.

Re:Disappointed

[harlows_monkeys]

I'm pretty disappointed with this move by RIM. I was hoping that by going all the way through the courts we might get some serious patent reform out of the whole mess

This might not have been a good case for prompting patent reform. I haven't read the patents myself, but from the discussion on the TWiT podcast, they were saying that the patents actually looked pretty legitimate, and were only likely to be overturned because of the immense pressure the government was putting on to keep their Blackberries going.

In other words, it's not clear that NTP is that bad guy here, and the RIM is the good guy.

No other choice...

[avalys]

They had no other choice but to give in. There was an article in the WSJ today that talked about how many people were switching to competitor's products, just because of the uncertainty surrounding the Blackberry.

It will be interesting to see how easily they recover from this.

Re:Who gave up? Not RIM, that's for sure!

[HoneyBunchesOfGoats]

So if someone tries to blackmail me for $100 and I talk them down to $50, I didn't give in either?

That's some faulty logic right there.

All this proves is we need to fix the USPTO

[morganew]

The industry and millions of consumers are breathing a collective sigh of relief tonight.

Despite averting a BlackBerry shutdown, however, this case is just more proof that the US Patent Office is in crisis. While some of NTP's patents may prove to be valid, it is clear that many of them should never have been granted in the first place.

The US Patent Office's failure to ensure quality threatens the patent system that is so critical to innovative small tech firms. If the quality of patents is not improved, the industry may lose faith in the entire system.

Some may not like software patents, but the reality is that companies have them. Open Source Champion IBM is the single largest patenter in the WORLD. they still make billions (with a b) off of patent licensing - including software/method patent licensing. Small companies like 'slingbox' have patents to ensure that they get VC funding and to prevent Sony from just creating the exact same product and steamrolling them.

I, along with Diane Peters from OSDL, Bruce Perens, lawyers from IBM and others got together at the USPTO last month to talk about ways to improve patent quality. No solutions yet, but some good discussion.

The quality issue MUST be solved, and NOW; so before you launch into a general "patents suck" rage, take a reality check and think about ways to get more prior art into the patent system and improve the quality.

It will be several years before patent reform legislation becomes law, so we are going to to have to find technology solutions that we can implement now, and hope that legislation fixes the things we can't.

Morgan Reed

Magic money for nothing

[coljac]

Despite RIM's unethical courtroom tactics (which backfired spectacularly), I can't help but be very disappointed by this decision. SIX HUNDRED MILLION dollars - a staggering sum - to be paid to these guys, for what? No hard work, no product, no contribution to science and technology. It's extortion, and I don't even understand the leverage they used given their patents are invalid. If I was the CEO of RIM (ignoring the realities of fiduciary duties to shareholders) I would rather go bankrupt than let the patent trolls become wealthy from my hard work.

The one good thing to come of this is it has raised the problem in the public eye. Congressmen thought they would lose their Blackberries. Let's hope some real reform is on the way.

Re:Magic money for nothing

[fermion]

It would be disapointing except for the context.

First, you never lie or piss off a judge. Doing so is simply a sign of great incompetance, and when on does this anything short of total humiliation is a generous punishment. in this case, the judge did not want to deal with these fools any longer, and just wanted the parties to work it out.

Second, this stuff should not have gone to court. Again, given the incompetent behavior of RIM, I can only assume the entire negotiations were handled badly. Perhaps RIM thought they were a multibillion dollar company, so they could just intimidate the small party. Perhaps they can, but it always better to take the high road in these situations, expecailly when dealing with a widow. Instead of fighting and lying and trying to invalidate the patents, an initial payment might have been in order. I have no idea what went on behind doors, but, again, given the public record these people just seemed really stupid.

And finally, the 600 million must be taken in context. This is like a years EBITDA, and who knows what it will actually mean to RIM after the tax accountants get done. And, since they have been effectivelty saving for a few years, the impact on this year is like 2 months EBITDA.

So, I am not saying that the payment in the best situation, but given RIM lied in court, continued to anger the judge during negotiations, and was clearly trying to play a waiting game, probably hoping that the parties would continue to die off, it was not a horrible outcome.

A couple more thing to put this in context. I recall an invention, perhaps the steam engine and Watts, that was not fully patented because it borrowed patented technology and it was easier to hide the technology than share the credit. In the end this left the inventor wide open for the product to be copied. The inventor would likely have been better off making the technology transparent, honestly fighting the patent, and probably winning in the end.

The second case is standard insurance industry practice, which is reminiscent of what RIM was trying to do. In most settlements, the insurance company will withhold all payments, even in the most open a shut cases. They will offer a fraction of what the policy would indicate. The injured party can either accept the token payment, or wait the statuatory three years to file suit. The insurance company usually ends up the winner as most people cannot self fund the recovery effort, or the insurance company rightly states that the cost of litigation will be greater than the present settlement. RIM was playing exactly this game, and it is probabl as sad they they won at this game as it is that NTP won at the orignal patent dispute.

The only thing worse than a patent troll...

[Trailer Trash]

is a patent troll with $600M in the bank.

Serves the f*****s right

[Emor dNilapasi]

This couldn't happen to a nicer bunch of bottom-feeding scumbuckets. Don't forget that RIM (or "Lawsuits in Motion" as El Reg dubbed them) was the group of clowns who sued Palm and others for daring to infringe on their breathtakingly innovative concept of putting a little keyboard on a PDA. Screw 'em. Screw 'em right up the arse with a pile-driver, 10 metres of razor wire, and a bottle of vinegar. And whether you love software patents or hate them, this event is a rare conjunction of equal parts schadenfreude and poetic justice.

Now we just have to wait a few years for the NTP <descriptions containing far too much vitriol to ever be displayed publicly> to get their peckers handed to them in thin slices. It'll be worth it.

Not having a product doesn't mean anything

[PCM2]

I'm not in favor of NTP or anything, but the people who point out that NTP had no product are missing the point of patents.

Suppose you invented the Blackberry. You. Right now. You have the idea. Now what? Do you have the financial backing to manufacture a million Blackberrys? Do you have the industry connections to go around and make deals with all the mobile carriers to get your service into people's hands? No. But it's still a good idea, so you want to go forward with it. That means finding potential partners and investors. But just talking to those people about it is spreading the idea around. Suppose you go to the mobile company and say, "I have these plans for this service, I'm going to call it Blackberry." What's stopping them from just making the service themselves and cutting you out of the picture completely?

Your patent is.

In an ideal world, that's what patents are for: protecting the little guy inventor from big business.

Re:Not having a product doesn't mean anything

[DShard]

Which is utter bunk. NTP came in after the fact, well after precedent and patented obviousness. These people had no product other than litigation. Their business plan was to sue successful companies.
    Now let's assume that you are the little guy. You come up with something utterly missing in the market. Let's call it middle management crack. So you patent it, build a company on it and become the "next big thing".
    During that time, a different company, comes in who doesn't actually make anything new or produce any products. What they do is buy "analysts" to come up with how your design is "not patented". Next they produce legalease to sue you for your unique business model. At no point have they ever had _one_ customer and now they sue you.

This is what happened in this case. In an ideal world, people can not use the justice system to extort money from you.

Re:Not having a product doesn't mean anything

[laffer1]

I've never looked at the specific claims in this case, but I think many people on slashdot are against patents as they are applied to software. Many people feel that patent law should not be applied to software. From a business perspective or the way the courts like to view computer stuff its a "product". As a computer scientist, its viewed as an algorithm... or more generally math. Everything we write can be proven correct with math and if someone patented how to calculate loan payments or the pythagorean theorem we'd have serious problems. Sometimes there is only a few possible ways to solve a problem from a practical standpoint. Should those few solutions be patented? Anyone interested in open source software, especially things like linux should see that software patents are a bad thing. In my example, the little guy is hurt because he can get handed a lawsuit for adding something to the linux kernel.

Of course I know nothing about law. :)

I still don't understand how someone can patent a genetic defect in blood. Isn't my wife prior art?

Why are they patent trolls?

[lmlloyd]

I love how the big company always gets the benefit of the doubt in today's corporate-loving world.

The founder of NTP had many years of wireless experience, and developed many technologies that moved wireless messaging forward. When RIM showed up on the scene, he sent them (as well as some other companies) a few letters to inform them that they were infringing on his patents. RIM ignored the letters, and continued doing business as though they had never heard of this guy. He didn't sue, he just chalked it up to a losing battle that there was nothing he could do anything about.

Then he saw a story about how RIM was suing other companies out of existence using patents that were infringing on HIS patents. At that point he figured it was time to try and get a big law firm involved, and went after RIM. He died of cancer before this whole court case was ever finished, but I am glad to hear his family will be well off.

The fact of the matter is, this never would have even happened if RIM hadn't started the whole thing by employing predatory practices with their dubious patents to drive competition out of business in the first place. I have no sympathy for RIM at all. They flat out lied in court, and were busted for it, they used some pretty questionable lobbying practices to get NTP patents invalidated, and they have practiced far more dubious patent extortion than NTP ever did. I don't think this is a case of a fine, upstanding company getting a shakedown by a troll. This is a case of pretty sweet karma in action!

Back to Business as Usual

[tekrat]

This didn't solve anything. If anything it made things worse. I didn't see *ANY* reporting that the flawed patent system was at fault.

All I heard from the mainstream news media was the Blackberry was being sued, and now they settled for $600 Million, so, in my mind, they must have been at fault.

Furthermore, this payment will embolden other patent trolls who want to be fed to the tune of millions for doing nothing.

And the Patent System will go merrily on it way, because now that Senators can use their Blackberries again, do you think they are going to give a tinker's damn that the system is flawed?

If I'd been running Blackberry, I'd have shut down service for 24 hours, with the message "we can't provide service due to a flawed patent system.".

Does anybody here remember the day everyone made their webpages BLACK as a protest? Does anybody remember when it was OKAY to fight back against something that was wrong? Now it seems, the M.O. is to give up, pay the bastards and lick your wounds, regardless of who's right or wrong.

In fact, the more wrong you are, the harder you should fight, it seems, because these days, the good guy always loses. (RIAA anyone?)

What a wonderful lesson to teach our younger people.
George Lucas should make a movie on that subject.

So this is how freedom dies. With a $600 Million payout.

TTYL
A disgusted and concerned old-timer.

RIM is a not a hero, fellas

[feijai]

RIM:

1. Worked so hard to run its competitors out of the market with lawsuits that The Register nicknamed it "Lawsuits in Motion"
2. Ignored all entreaties from NTP for a year, forcing NTP to eventually sue them.
3. Lied in court so often that they received three-times punative damages just for their court conduct alone, plus attorneys' fees.
4. Gave Congress free Blackberries as a tactic to get them hooked, then
5. (Successfully) Lobbied Congressmen to put big-time pressure on the USPTO to invalidate NTP's patents while the court case was ongoing (can you say "cut off their air supply"?), regardless of their actual validity. In the US, if you're doing something illegal, you can always get the law changed if you have enough money. Even if you're a foreign company.
6. Tried to push through a congressional resolution that shutting down the Blackberry network would be a "threat to national security" because of the free Blackberries they'd hooked the feds on.
7. (Successfully) Lobbied the Canadian government to weigh in as if this were a matter of international concern.
8. Purposely delayed resolution until after NTP's original inventor died.

This company deserves to go straight to hell. $612 million is a rap on the knuckles.

Re:AW MAN!

[feijai]

NTP's patents were bogus to begin with.

You've not read the patents, have you? They were original and significant, and I am not aware of any relevant prior art. USPTO invalidated them largely because RIM paid congressmen a boatload of money to pressure the crap out of USPTO to do so.

They had no product.

They did originally. They sold 'em at tradeshows.

RIM was winning in court.

RIM was losing big time in court. The judge was at the stage of awarding NTP 3x punative damages. He was likely going to rule against RIM anyway even though USPTO had invalidated the patents.

RIM was wise to settle.

Stop the nonsense

[tkrotchko]

" along with Diane Peters from OSDL, Bruce Perens, lawyers from IBM and others got together at the USPTO last month to talk about ways to improve patent quality. No solutions yet, but some good discussion."

Why don't you get together to discuss the fact that most of the significant discoveries in computers, information and software fields came about before software patents.

And if you want to quibble with me, fine, but answer this: If software patents were important to drive innovation in the high-tech industry, then how did some many great pieces of software get written in the days before software patents?

Let's not pretend that software patents are an old, time-tested way of protecting software. They're not, they're less than 10 years old. So rather than accept a relatively recent ruling by a court (Not even a law from congress), why don't we do the right thing and stop software patents. The fact that the courts lowered the bar so that nonobviousness was no longer the primary determinant of whether a patent should be granted should be reason enough to get rid of them.

Name something... anything out there in the market that was only possible because of software patents. The idea of these patents isn't to make NTP rich simply because of knowing how to game the system, but to advance the state of the art. These patents aren't doing that; if anything, they're doing the opposite.

I'm opposed to coming together and working out an arrangement because it presupposes these patents are acceptable. They are not. Software patents are so tremendously wrong that I think they're something that have to be opposed on general principal.

NTP did have products!

[waldo2020]

Actually, Campana's company Telefind did have working products, albeit prototypes, exhibited at Comdex in 1990. There weren't terrible reliable - as the networks weren't either, only one way email to pagers but they worked. AT&T was online as primary customer but ducked out leaving Telefind high and dry. Campana inherited tha patents after a lawsuit against Telefind."Mr. Narayanan liked Telefind's products, thinking they might fit well with the Safari project. AT&T had an e-mail system and a prototype computer; what it lacked was a paging service that could put the two together. But after a year of flirting with Telefind, even demonstrating Telefind's system at the Comdex computer show in Las Vegas, AT&T opted for a larger partner in Skytel." RIM's 800 and 900 series pagers were released in 1990 - well after Telefind. Mind you they were true 2-way pagers operating on Motorola's wireless packet Mobitel network. What brought on the NTP lawsuit was RIM's own arrogance in suing othe companies like Palm for having the audacity to incorporate tiny keyboards in their products. C'mon RIM! Who's the troll now?