Blackberry NTP Legal Analysis

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Blackberry NTP Legal Analysis

The news of the day is whether the United Nations Security Council will impose sanctions on Iran. Sanctions are the ultimate weapon of pain (not including war of course) and are meant to bring a country to its knees in order to get them to do something. In Iran's case the UN Security Council wants the country to stop developing nuclear material that can be used in an atomic weapon.

This controversy got me thinking about how tough it is to get consensus in the UN to impose sanctions on a country. Moreover I started to wonder if a single patent suit can't bring a country to its knees imposing even more pain than sanctions.

Such was the case with the RIM Vs. NTP case that was recently settled for over $600 million dollars. If the courts forced Blackberry to shut its network down and there wasn’t a good workaround, the economy of the US would have been crippled. After all, the millions of Blackberry users are certainly power users, the people who need to be connected 24x7; lawyers, investment bankers and businesspeople.

These workers who represent some of the most highly compensated people in the country could lose hours of productivity per day. This would lead to slower decision-making, putting companies at a competitive disadvantage when competing globally. In addition it would likely increase the cost of doing business for many corporations and thus eat into profits.

With all that is at stake in such a case, it seems crucial that we all begin to delve a bit deeper into the world of patents -- even though the looming threat of a Blackberry shutdown is gone -- for now anyway. Many people are insulated from the system of patents with its legalize and rules that may not seem logical to those who haven't been trained in the fine art and science of patent law.

So if you think USPTO is an organization that brings parents and teachers together in the United States, you likely want to keep reading this article to the end. In order to tackle the issue of patents from a legal perspective I decided to ask some questions from two senior attorneys from Morrison & Foerster - New York partners Matthew D’ Amore who specializes in litigation and Rory Radding who specializes in patents.

Morrison & Foerster is one of the nation's top corporate law firms with over a thousand lawyers and specializes in a number of areas including litigation and technology.

Q: What does this ruling mean for other patent-holders?

MD: The Court made loud and clear at the hearing on February 21 that he did not want the parties to force him to make a ruling on an injunction; he viewed this as a business dispute that should be resolved by negotiations. For patent holders, the deal reinforces the value of threatening an injunction, but cautions them not to get too excited -- this deal is for much less than the $1 billion NTP had reportedly demanded last year.

RR: The basic right to exclude is a powerful weapon which if used as part of an overall strategy can either shut down entire industries, competitors or lead to a peaceful resolution of the dispute in the form of a negotiated settlement.

Q: Is this a good thing for consumers or bad?

MD: For this case, consumers get to keep their Blackberries; companies don't have to worry about whether or not RIM's workaround will work -- from that perspective, it's win-win. The only question is whether the price will go up, but competition in the marketplace -- competition that's become more vibrant due to the uncertainty this case caused for RIM -- will probably keep the price from rising too high. For consumers in other fields, well, that depends on whether you consider patents a good thing or a bad thing. To some, the case demonstrates the value of innovation; to those who wonder whether or not the NTP patents are really valid, the case demonstrates a huge market inefficiency. Interestingly, the reexamination of NTP's patents by the patent office will most likely continue despite the settlement, so we'll eventually find out the answer to that question.

RR: The case itself is somewhat neutral concerning consumers. The consumer wants a product that works and is efficient and economical to use. After the settlement, the consumer still has the choice of using the Blackberry or another system. In this respect the settlement is probably pro competitive in providing the consumer with several options.

Q: How will the technology market be affected by this ruling?

RR: The technology market will be encouraged to innovate and utilize the patent system to protect the innovation.

Q: Will Blackberry competitors have a tougher time competing now?

MD: Yes. The case removes uncertainty for RIM, which had been a big selling point for them. And they may face the risk that NTP will turn to them next! On the other hand, who knows whether there's another NTP emboldened to go after big players like RIM, and that may encourage CIOs and CTOs against relying too heavily on one provider.

RR: Blackberry competitors will have a slight set back from their prior short increase in sales. However they will still be offering an option to the Blackberry. I do not think there will be a "tougher" time, but just a decrease in the rate of business growth. There is always a need for options.


Q: What is the next big patent case on the horizon?

RR: .E-Bay by a long shot. Not only does it deal with injunctions but it is a business method patent which I do not believe the Supreme Court has addressed yet. It will likely be followed for decades.

If you made it this long you deserve to know that USPTO stands for US Patent & Trademark Office and as you might have surmised is responsible for issuing patents. In my research I have learned that other high-profile cases are going to potentially come to the forefront soon. I look forward to keeping you posted on such matters and I hope this article answers some basic questions about how some of the top people in the legal profession interpret the results of the RIM Vs. NTP legal drama.



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