Patent Trolling…NTP VS RIM

How would you like it if something you’ve successfully developed and refined is being sued by someone whose products failed, but still, they think they have the right to make money off of you! This is exactly what happened to RIM a few years ago.

A quick intro:

I’m an avid Blackberry user. Most of my close friends can attest to that and some of them even call me a crackberry addict…but it doesn’t bother me. In my opinion, it’s paved the way for modern day wireless communications.

Millions of users around the world rely on Blackberry smart phones. From consumers, to small/large enterprises, to government, public services, and military, the Blackberry has been deployed from director and CEO’s right down to front-line staff to allow them to stay in touch with their email and communications.

Research In Motion (RIM) is the world renown company which engineers and manufactures the blackberry device. It was founded in the mid-1990s by Waterloo University drop-out, Mike Lazardis. After successfully producing blackberry devices for over 10 years and selling over 100 million blackberry smartphones, RIM has been touted as one of the most successful Canadian stories ever.

Despite being a fully Canadian company with its headquarters in modest Waterloo, Ontario, the majority of RIM’s market is within the USA. This mainly because the US has 5 times the population of Canada and is also major player in World banking and trade. RIM has thousands of customers! Tons of small, medium, and large businesses/enterprises, the US Military, US Congress, Government (notably President Barack Obama), public services such as Fire & Police Departments, and consumers like you and me. Basically, you name it, and I’m someone within each of those sectors has used or knows someone with a Blackberry. They’re everywhere and we rely upon it.

What is a Patent?…

A patent is basically an idea or invention in which an individual(s) or a company have filed with a governing patent office (Usually federal) and have exchanged exclusive rights over the invention for a limited period of time. If another party were to use or infringe on a patent, then they would be required to pay a licencing or loyalty fee to the patent holder (the group/company who owns the patent). Failure to do so can lead to fines or lawsuits against the offending company.

In relation to RIM?

RIM, being the success story they are so far, also has many registered US patents to its name. These patents were filed over their years of innovation and success to protect their products and designs. Many companies all over the world hold patents and usually have a team of highly paid patent lawyers to enforce them. In this case though, it was a man and named Thomas Campana and his intellectual property (IP) lawyer Donald Stout, who were waiting for this opportunity to cash in.

NTP Inc was founded by Campana and his lawyer in 1992. Its sole purpose was to sign over some patents he had filed while working with his old company ‘Telefind’. Telefind was partly owned by Campana and was developing a wireless paging system when it went bankrupt in the early 90s. Campana then created NTP and signed over the patents. If you Google NTP, you pretty much find nothing about the company other than its Wikipedia citing. NTP has no website, they have no products, and no desire service or produce anything. They have been labelled as a patent troll after launching an extensive patent infringement suit against RIM in 2002.

This patent suit has been regarded as one of the largest patent litigations in history. It even caught the attention of the US government.

This post isn’t supposed to be about the actual legal process and etc…If you’re more interested in what actually happened in the case, there are plenty of articles from many international media outlets. Globe and Mail – Patently Absurd

Although RIM and NTP settled their case for a high cost of $612 million in 2006, there is still controversy on the legitimacy of NTP patents. Some of them are still be re-examined by the USPO.

What is a Patent Troll?

A patent troll isn’t an official legal term, I would classify it as lingo for a company that has no intension on producing or marketing their patented ideas to a practical form. It is usually referred to with a negative connotation. There are many patent trolls out there. It usually contains a set of lawyers with a company who hold a portfolio of patents. Patent trolling can also occur internationally as many governments respect patents from other countries. (Most of the European countries have agreements with Canada and the US as does Mexico and Australia)

Aren’t patents supposed to help protect your products and ideas?

Yes, they are! Its great to have a patent under your name, but I personally view a patent troll as someone who sees an opportunity to make money off of someone else’s success. In this case, if NTP had actually produced and manufactured a product to market, even if their product had failed. I think a patent infringement case against RIM would be ethically sound…especially if the Blackberry manufacturer had released a product a few years after NTP’s original failed release.

Since it’s obvious that this didn’t happen, I feel that the US Patent System as well as other patent bodies around the world should have their laws amended with a clause that in order for the patent holder to actually enforce their patents, they must be able to prove that they did indeed try and take their design to a market with a practical, not just theoretical means.

Lastly,

In July, 2010, NTP has embarked on another patent trolling rampage. This time it’s going after Apple, Google, Microsoft, Nokia, AT&T, LG, Motorola….etc. In a brief set of layman terms, NTP is now arguing that those companies are infringing on its patents over the use of wireless email to any device….pretty much the same argument they used against RIM. I found this article by Rob Pegoraro from the Washington Post outlining something very obvious…Is NTP trying to claim that it should be able to enforce their patents on the transmission of email over any form of wireless device? In a way, does that mean, that by using my laptop on wireless is an infringement of their patents? NTP should sue everyone in the world who makes computers now too! Who knows…they might try might even try…

Related in some way…

Apple, the maker of the popular iPhone and Mac products aren’t immune to patent trolling. Recently, a US court ruled that Apple infringed upon a patent involving their Mac OS and iPhone. You can read more into this story by this appleinsider article or by simple searching google.

Further Reading:

I linked this Globe and Mail Article earlier in this post. I felt that it’s a great overview about the entire RIM vs NTP case. If you have the time and are interested, I would highly recommend that you read it. Globe & Mail – Patently Absurd
CNET News – tagged NTP Articles
InformationWeek – Will NTP Sue Every Wireless Company?
BBC – Settlement Ends Blackberry Case

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