After establishing its BlackBerry mobile email device as the piece of tech that no self-respecting middle manager could be seen without, RIM appeared to be sitting pretty.
The Canadian company seemed to appear from nowhere and steal into a market that should have been Microsoft's or IBM's for the taking. In fact its device has proved so addictive it has earned the nickname CrackBerry in some circles. Email on the move seems like the most obvious killer application for a mobile device but for some reason none of the big players were agile enough to recognise or exploit the obvious need.
This lack of real competition was just the kind of head-start that RIM required to establish its technology as the de facto standard. But after an excellent spell of good luck, the tide appears to have changed for RIM.
Winning big also means you have it all to lose. And RIM stands to lose big-time if an ongoing lawsuit filed by patent-holding company, NTP, in 2002, alleging patent infringement is upheld. NTP is seeking to shut down RIM's domestic US operations, where generate 75 percent of the BlackBerry maker's revenues. The patent-holder won an injunction to that effect in 2003, although this has been stayed pending appeal.
Violation allegations
In August, an appeals court scaled back the ruling against RIM, but upheld some patent infringement claims, although the US Patent and Trademark Office issued a "non-final action" in mid-December 2005 and early January 2006, rejecting seven of the eight NTP patent violation allegations at the centre of the original dispute.
Nonetheless, the US Patent Office's rulings are not seen as final as NTP can appeal and requests by RIM, including a recent petition to US Chief Justice John Roberts, to get the courts to stay the case have failed. This means that the question now before US District Judge, James Spencer, is what effect the appeals court ruling should have on the injunction and damages sought by NTP.
Patent workaround
Both sides have been ordered to file final legal briefs by 1 February and a hearing is expected to follow within a week. But Jim Balsillie, RIM's joint chief executive, says that the organisation has come up with a software-based "workaround" to the patents to "keep our business going as we always have, as we always will".
Richard Edwards, a research analyst at Butler Group, believes, however, that such legal disputes are never positive as they create uncertainty among customers — something that is likely to be particularly marked among the organisation's key business base.
"Anything that distracts people from buying the product is a threat and it's something that a senior manager would pick up on. No one wants to tout a device that could be seen as obsolete and with the greater range of viable alternatives now available, it encourages people to make a more considered choice rather than just a me-too purchase," he says.
Four million subscribers
While Charmaine Egberry, RIM's vice president for Europe, was unable to comment on the case directly but claimed that it had made no impact on sales, with subscriber numbers now having passed the four million mark and expected to hit five million in the fiscal year ahead.
To make life even more uncomfortable for the vendor, however, influential technology analysts Gartner issued a warning at the start of December advising customers to "place mission-critical BlackBerry deployments on hold until RIM's legal position is clarified".
The move followed the court's decision on 30 November to deny a motion for RIM to stay a pending re-examination of its patents by the US Patent Office. At the same time, the court ruled that a $450m term sheet agreement between RIM and NTP, which was ...
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