Subject: [NEXTEL-1] RIM Gets Temp Reprieve on the Court's Order To Stop Selling Wackberry's & $54 million in damages.

From: [email-masked]
Date: Tue, 19 Aug 2003 04:16:55 -0400

RIM Gets Temp Reprieve on the Court's Order To Stop Selling Wackberry's &  $54
million in damages.
RIM Entangled In Legal Battles

Research In Motion (RIM) is still pushing its product lines and keeping busy with
its various legal battles. Though it was ordered to stop selling its BlackBerry
device due to a patent dispute with NTP, the order won't be enforced until after
the appeal goes through. Analysts are calling the patent action by NPT
"distasteful." RIM is involved in legal action with Good Technologies and Xerox as
well. With enough financial backing to keep up with the legal action, RIM is not
in any immediate financial danger, however, the so-called "frivolous" legal issues
are eating away at profits. Legal fees and related costs are estimated to be
around $100 million during the past year.  Additionally, it takes RIM's focus away
from keeping one step ahead of the competition. Something that could have much
harsher implications than any legal action.

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Courts, competition can't stop RIM's dominance
Mon Aug 18, 8:00 AM ET

Eric B. Parizo, SearchMobileComputing.com News Editor Research In Motion Ltd. has
been busy lately, and not just with its product line. The company faces an ongoing
patent violation fight, a handful of other legal tussles and growing market
competition -- yet it still dominates the enterprise mobile messaging market.

RIM's top priority recently has been a suit filed by intellectual property holding
company NTP Inc. of Arlington, Va. It claims that Waterloo, Ontario-based RIM's
popular BlackBerry mobile messaging device and related software violate patents
registered by NTP's founder in the early 1990s. RIM was ordered to stop selling
its BlackBerry device in the U.S. and pay NTP approximately $54 million in
damages, but the company was recently granted a temporary reprieve, pending an
appeal.
Patent patience According to Gartner Dataquest's Todd Kort and various documents
associated with the Research In Motion Ltd. case, the patent in question relates
to work that NTP Inc.'s founder, Thomas Campana, did in the late 1980s as a
subcontractor for AT T Corp. AT T wanted to add wireless (news - web sites) e-mail
features to its new Safari laptop computer, which it had acquired as a part of its
purchase of computer maker NCR.

Campana had developed and patented a method of sending e-mail messages to wireless
pagers, and it was a natural fit for AT T. However, at the last minute, Kort said,
AT T decided not to use Campana's technology, and he lost a considerable amount of
money as a result. "So Campana and his guys sat on the [patents] for years," said
Kort, until his holding company, NTP, contacted RIM in January 2000 regarding the
patents. However, RIM claims that NTP "did not readily demonstrate any support for
potential patent infringement." NTP filed suit against RIM in 2001."It's a little
bit distasteful," Kort said of NTP's patent crusade, which he said is likely to
extend beyond RIM to other companies with similar technology.

"What's happening is NTP is going back in time, asking people who have
theoretically been violating their patents to pay up." Since that appeal process
is likely to last for months or years, customers shouldn't urgently seek out RIM
alternatives, said Todd Kort, a principal analyst with Stamford, Conn.-based
Gartner Dataquest.
"I would recommend people stay with RIM if they're happy with them, because Good
[Technology Inc.] and its licensees are the
only viable option on the horizon as far as a really good, solid alternative
enterprise [mobile] e-mail solution," he said.
Kort added that RIM's strategy will likely be to drag out the appeal process as
long as possible, because that would allow the
company to continue selling its products while reworking them to avoid infringing
upon NTP's patents.
The company isn't in any immediate financial danger either, he said, because it
has more than $300 million in cash on hand. If
RIM is forced to dole out a large cash settlement, it will have plenty left over
to pay its own bills and sustain its business.
RIM is fighting several other legal battles as well. It filed suit against Xerox
Corp. last month to prevent the document technology company from demanding patent
royalties. It is already involved in litigation with rival Good Technology Inc.
over alleged stolen trade secrets. Though the NTP case threatens the company's
core business, Kort called some of RIM's legal entanglements "frivolous,"
including one dispute with Handspring Inc. involving a keyboard patent.

Still, even if RIM's legal battles aren't directly harming the company's products,
Kort said, they are digging into the company's
profits. He estimated that its legal fees and other related costs during the past
year alone could reach $100 million.
Another indirect consequence of the lawsuits is that RIM is unable to focus all
its attention on staying one step ahead of its
competitors. Kort said one competitor in particular, Good, has been gaining
momentum.

Good offers a mobile messaging service similar to RIM's called GoodLink, which
Kort said is used by approximately 1,200
enterprises. While that number pales in comparison to RIM's 12,000 customers, Good
is seen as an appealing alternative to RIM because RIM requires the use of a
dedicated server and has been slow to allow third-party application development.
What makes Good more compelling to some RIM customers is the fact that, with
relative ease, Good's software can be loaded
onto BlackBerry devices in place of RIM's software, "so there are thousands of
people using a BlackBerry device with Good
software," said Kort.

Soon Good may not need RIM's devices at all, since earlier this year the company
began offering its own G100 handheld device in conjunction with Cingular Wireless.
Plus, it is working with Palm to engineer its software for the Palm OS-based Treo
600, and with Dell Inc. to develop a competing device based on Microsoft Corp.'s
Pocket PC operating system. An IT manager at a large, multinational law firm who
spoke on condition of anonymity, said her company used Good's product and then
switched to RIM because of compatibility problems in its global operations center.
She said she hasn't been following RIM's legal battles very closely, though if her
company has to switch away from RIM unexpectedly, such a move would be difficult
but "would not be insurmountable." "It'd be murder on the IT staff," she said,
because about a dozen people are charged with supporting several hundred end
users, not all of which are using BlackBerry devices that would be compatible with
Good's software.

http://story.news.yahoo.com/news?tmpl=story&cid=1632&ncid=1632&e=1&u=/techtarget/20030818/tc_techtarget/919794

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