BlackBerry Blues Riff Keeps on Playing

I admit it, I've got a problem.

Smaller than a wallet, this little black box comprises my phone and Internet connection, sending a continuous stream of e-mail and news. In the mornings it wakes me to the tinny sound of "El Toreador" or "The Entertainer," automatically adjusting to the local time zone. My wife calls it "the other woman" and claims it gets more attention than she does.

Maybe she's right.

Judge Getting Impatient

So, last Friday when U.S. District Judge Spencer chose not to issue an immediate ruling to shut down BlackBerry service for patent infringement, I and millions of other "Crackberry" addicts breathed a collective sigh of relief.

As a patent attorney, the NTP v. Research In Motion (Nasdaq: RIMM) case has been an interesting joyride where I am both dispassionate observer and victim. How did all of this start? When will it finally end?

Inventor Thomas Campana obtained a variety of patents covering wireless e-mail delivery, including the system BlackBerry employs. Campana later formed NTP and unsuccessfully approached RIM about licensing for BlackBerry, resulting in the 2001 lawsuit. After a jury verdict in NTP's favor, appellate review and an attempt to engage the Supreme Court, the case recently came back to trial Judge James Spencer for final resolution.

Judge Spencer, however, seems exasperated that the parties have not settled this case, and he reminded RIM that "the jury verdict has not changed." Nonetheless, for the moment, he's held off imposing the injunction.

Another Year of Fighting?

Having lost all substantive court battles, RIM has taken an alternate course, pursuing the matter at the U.S. Patent Office and challenging the validity of NTP's patents. Although patents that issue from the Patent Office are accorded a presumption of validity, that presumption can be overcome at trial -- which RIM failed to accomplish -- or through an administrative reexamination proceeding at the Patent Office.

NTP's patents have apparently not been faring well in the PTO reexaminations, and all have been "finally" rejected by the Patent Office review board. Although the press and RIM's CEO have made much of this finality, patent attorneys know that NTP is nowhere near finished.

Indeed, through further argument and appeals, NTP can fight the reexamination rejections for up to a year or more, and has a chance of reinstating the patents in question.

Although Judge Spencer granted the parties more time to resolve the conflict, viewing settlement as the best vehicle, it is doubtful he will wait another year to impose the jury's 2002 judgment, and he has no obligation to wait even a day longer. It seems in both party's interests to settle soon.

External Influences

Meanwhile, RIM has been trying to come up with a design-around of the NTP patents, enabling BlackBerries to operate in a non-infringing Multi-Mode format instead of the infringing U.S. Mode format.

Should RIM be able to modify the BlackBerry service to operate in a manner different from that set forth in NTP's patents, then RIM, while still liable for past infringement, might avoid paying future royalties and injunctive relief to NTP.

There has been considerable press about this design-around, but many doubt RIM can completely avoid all of NTP's patents. Also, if the new service is substantially different from the old, there is the chance that BlackBerry users may jump to other brands -- despite our addiction.

What is also interesting in this controversy is the involvement of the government. Since many in Congress and their staff rely on BlackBerries, they have been particularly vocal about the loss of this technology.

Even the U.S. Attorney intervened in the recent injunction hearing. Additionally, since RIM is a popular Canadian company, the Canadian government has also exerted pressure on the U.S. Commerce Department and Patent Office during these reexaminations.

'Patent Trolls'

Behind the scenes, patent reforms underscoring themes of the BlackBerry case are brewing. For example, many manufacturing and service companies feel patent holding companies -- i.e., companies like NTP that make and own nothing but patents, and in their view contribute little to the economy -- should not be accorded full patent rights, particularly injunctive relief.

Although this argument against so-called "patent trolls" gets great press, most of the patent bar is unenthusiastic about introducing an arbitrary sliding scale of patent coverage across technologies.

Another case, currently at the Supreme Court, addresses the patentee's absolute right to injunctive relief. The Court is being asked to reevaluate this remedy and consider granting patentees an injunction only if there is no other recourse, e.g., only where monetary damages are unknown.

This argument also gets great press and is supported by academia, but many in the patent bar consider it a watering down of a patent's intrinsic value. Indeed, injunctive relief is the heart of a patent's power. Denying the patentee this right would make compulsory licensing a reality for U.S. companies for the first time in our history.

With NTP, RIM, Judge Spencer, Congress, the Supreme Court and foreign governments all in the fray, for a patent attorney, this case rivals the "Incredible Hulk" roller coaster at Universal.

Since my BlackBerry still works, delivering e-mail and waking me to the strains of Bizet and Joplin, my addiction is sated one more day, awaiting either settlement or Judge Spencer pulling the plug.

To the tune of Dire Strait's "Money for Nothing":

I want my, I want my Blackberry

I want my, I want my, I want my Crackberry