RIM has recently won court rulings in the UK and Germany that make a European shutdown unlikely. But the Canadian company is still locked in battle with US patent holder NTP.
"RIM remains pragmatic and reasonable in its willingness to enter into a settlement that would generously compensate NTP while protecting RIM’s business and partners," said Jim Balsillie, Chairman and Co-CEO at RIM yesteday. "NTP’s public offer of a so-called ‘reasonable’ license, however, is simply untenable. It comprises illusory protection for RIM and its partners and requires a lump-sum payment for the theoretical life of the patents even though the US Patent Office is expected to nullify them."
Balsillie added: "RIM’s workaround provides a contingency for our customers and partners and a counterbalance to NTP’s threats. This will hopefully lead to more reasonable negotiations since NTP risks losing all future royalties if the workaround is implemented."
RIM points out that workarounds are a legitimate strategy that have been respected by the courts as a means to avoid infringement. In the years leading up to its public launch in 1999, it says the BlackBerry was invented wholly independently of NTP’s patents and comprises a wide spectrum of designs and inventions that are outside the scope of NTP’s patents.
There are only nine claims relating to three NTP patents remaining in dispute in their litigation and those claims are only directed to specific implementations of certain aspects of the BlackBerry products and services. As a result, RIM says it has been able to modify its underlying BlackBerry message delivery system to work around the NTP patent claims.
Although the development of this modification required substantial R&D effort from RIM and would require software updates in the event of an injunction, RIM says it has ensured that the "industry leading functionality, performance and user experience" remains intact.
NTP has previously told the court that it will argue that even RIM's workaround will infringe is patents. But RIM says it has received a legal opinion suggesting that RIM’s software workaround designs do not infringe any of the NTP patent claims remaining in the litigation.
RIM has incorporated the workaround designs into a software update called BlackBerry Multi-Mode Edition. RIM has also filed new patent applications with the Patent Office to cover its workaround designs.
BlackBerry Multi-Mode Edition is so named because the software is capable of operating in different modes that can be remotely activated by RIM through its Network Operations Center (NOC). In the absence of an injunction, the software and the underlying message delivery system can continue to run in “Standard Mode” (identical to the manner in which the current BlackBerry software and system operate) and the workaround will remain dormant. In the event of an injunction, RIM is able to remotely activate “US Mode” via its NOC and the workaround designs would automatically engage for each handset containing the Multi-Mode Edition software update.
RIM hopes that an injunction, if granted, would not apply to customers that purchased a BlackBerry handset prior to the effective date of any such injunction. RIM believes there are legal grounds for (at least) exempting pre-existing customers from any injunction and RIM has raised these arguments in its court submissions. In the event of an injunction without such an exemption, however, the BlackBerry Multi-Mode Edition software update would allow continuing service for pre-existing customers.
In the event of an injunction barring new sales of products utilising RIM’s current system designs, RIM will have already pre-loaded the new BlackBerry Multi-Mode Edition software on to BlackBerry handsets and incorporated it into BlackBerry Enterprise Server software prior to shipping.
RIM will soon begin to ship the new software latent on new handsets in addition to making the software update generally available at the website listed below for corporate IT departments and others to download and implement in accordance with their IT procedures. For avoidance of doubt, UK users do not need the workaround.
NTP has proposed a 30-day transition period in the event of an injunction; but RIM has argued that the transition period should be longer.
Meanwhile, the US Patent Office has already rejected each of NTP’s patents on two occasions. But it has not reached the stage of cancelling NTP's patent claims. The court action continues regardless: it will not wait to see what the US Patent Office finally decides, although cancellation of NTP's patents will surely result in the lifting of any injunction.
The impact of patent cancellation on the damages and royalty payments is unclear. A spokesman for NTP told OUT-LAW that he could not comment on this because it "depends on many contingencies."
