WATERLOO, Ontario-Research In Motion Ltd. may have found some leverage in its fight against NTP Inc., unveiling a software “workaround” it says would prevent a shutdown of its service to U.S. BlackBerry users.
The Canadian developer said it has developed and tested technology it plans to deploy should a court-ordered injunction be enforced that would kill its service. RIM said it has received a legal opinion confirming the workaround doesn’t infringe on NTP’s patent claims in question.
The substitute technology is invisible to users, RIM said, and maintains “existing platform benefits for system administrators, application developers and network operators.”
RIM and NTP are due in court Feb. 24 for a hearing that may lead to enforcement of the injunction, necessitating RIM’s use of the workaround. The developer had discussed the new software in recent months, but the announcement marks RIM’s first claim that the technology is ready for deployment.
The BlackBerry maker is also biding its time as the U.S. Patent & Trademark Office reviews NTP’s patent claims. The office has issued preliminary rejections of all five patents in question and has implied the claims may ultimately be rejected.
Such a move would nullify the court case, but U.S. District Judge James Spencer has indicated he would not wait for the patent office to complete its review. NTP would have at least two avenues to appeal rejections of its claims, and a final rejection-or vindication-of its patents could be years in coming.
Legal analysts have said that while Spencer may delay an injunction while the patent office completes its review, the two companies are likely to agree on a settlement. Meanwhile, RIM continues to lose ground in the mobile e-mail space to a field of cut-throat competitors due to fears its service could be shut down.
With hundreds of millions of dollars at stake, RIM’s announcement is undoubtedly aimed at assuaging customer fears and gaining bargaining power against NTP.
“RIM’s workaround provides a contingency for our customers and partners and a counterbalance to NTP’s threats,” said Jim Balsillie, RIM’s co-chief executive officer. “This will hopefully lead to more reasonable negotiations since NTP risks losing all future royalties if the workaround is implemented.”
If it can be easily deployed, the new technology would be a major boost for RIM. The company could withstand an injunction as it awaits final word from the patent office, severely damaging NTP’s leverage to negotiate a settlement.
It’s unclear how disruptive deploying the workaround might be, however. In a document filed with the court last month, RIM conceded that replacing any of the technology in question would negatively affect its customers.
“If an injunction is implemented and a workaround rolled out, it is reasonably certain that some of RIM’s existing customers will opt for other providers, even though inferior in many respects, rather than go through the trouble of installing the new software,” according to the document. “Similarly, implementing a workaround, if an injunction is issued, may have unintended consequences on the operation of certain third party applications used on the BlackBerry handhelds (which may in no way relate to NTP’s patents).”
RIM investors greeted the news warmly, sending shares of the company up $2.78 to $71.43 by mid-day on the Nasdaq.
