RIM saga grinds onward

Research in Motion’s high-profile patent troubles in the U.S. may have customers on both sides of the border reconsidering their wireless e-mail options, but according to one analyst, increasing competition in the push e-mail space may be more of a threat to the firm.

Research in Motion (RIM) has been embroiled in a patent dispute with NTP, a Virginia patent holding firm, since 2002, when a U.S. court found RIM guilty of infringing on patents held by NTP.

The court case could end soon with the judge expected next month to re-impose an injunction that would halt BlackBerry sales in the U.S.

However, the U.S. Patent and Trademark Office (USPTO) has preliminarily rejected seven of the eight patents to date and with a fast-tracked review process, a final decision is expected by mid-February.

Research firm Gartner garnered headlines in early December when it said enterprises should halt business-critical deployments of the Waterloo, Ont.-based company’s popular BlackBerry devices until the patent tussle is resolved.

Not all analysts share Gartner’s view, however. Carmi Levy, a senior analyst with Info-Tech Research in London, Ont., said companies should be cautious by default when approaching any IT deployment but the trajectory of the court and patent cases doesn’t warrant extra caution.

“I found [Gartner’s] perspective unnecessarily inflammatory and premature. There’s absolutely no reason to do a full stop on BlackBerry deployment at this point,” said Levy. “I think that kind of perspective made for very good headlines but it wasn’t necessarily the best advice for IT managers.”

That said, Levy said he believes Canadian companies are following the patent case closely. He expects the situation should be resolved by mid-February, when the USPTO is expected to release its final decision on the validity of RIM’s patents. He said it’s unlikely the trial judge will rule before then, noting that if the patents are ultimately ruled invalid, the court case will effectively have its legs cut out from underneath it.

“I think Judge Spencer is a very wise man, he’s clearly in a rush but he’s not stupid,” said Levy. “I think he’s watching the accelerated timeline of the USPTO and I think he’s going to time himself accordingly.”

RIM has aggressively defended the case, saying it is willing to settle and would agree to pay a fair royalty rate, but only as long as the patents in the case remain valid.

The company’s president and co-CEO, Jim Balsillie, said if the USPTO quickly issues final actions invalidating the patents, it would create enough doubt around the patents to persuade the court to halt the proceedings until the validity of the patents is settled. “The [USPTO] has said, ‘We’ll be on time, and we’ll reject these claims,’” said Balsillie. “If that’s persuasive to the court, then great. If not, then we’ll have to do the workaround.”

RIM has not provided many details about the “workaround” it would use to keep the service up if the injunction is imposed. Balsillie said the company doesn’t want to tip its hand to NTP about how the workaround bypasses the disputed claims.

Two of RIM’s competitors in the converged device space say they aren’t trying to make hay out of the patent issue. Both HP Canada, manufacturer of the iPaq, and Palm Canada with the Treo, say their respective devices were already finding strong traction in a growing market.

“Whenever there is this type of confusion in the marketplace, we do see a sales opportunity for HP,” said HP Canada spokesperson Lizanne McReelis.

Palm Canada president and general Michael Moskowitz said Palm has heard about the patent issue from its enterprise customers but it hasn’t changed its marketing strategy.

“I think the patent issue could potentially effect Canadian users that roam in the U.S., so companies do need to assess their risk tolerance, no question,” said Moskowitz. “If the patent issue contributes to a greater number of enterprise users re-evaluating their mobile computing needs then we’re ready to discuss different options.”

Info-Tech’s Levy said, patents aside, he sees bigger challenges coming for RIM, adding it’s a critical juncture for the company. After grabbing first-mover advantage and becoming “as closely associated to wireless e-mail as Kleenex is to tissue,” Levy said competition in the push e-mail space is coming hard from Nokia and Microsoft. “I think RIM is hoping for this case to go away quickly so they can then focus on the real fight for survival,” said Levy.

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Jeff Jedras
Jeff Jedras
As an assistant editor at IT World Canada, Jeff Jedras contributes primarily to CDN and ITBusiness.ca, covering the reseller channel and the small and medium-sized business space.

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