Congratulations. You’ve just been awarded $612.5 million. But if you’re NTP Inc., you’re probably not headed to Disneyland.
Instead, the company likely is going back to the U.S. Patent and Trademark Office to defend its claims-patents that some call worthless but that just reaped a massive payday when Research In Motion Ltd. agreed to pay NTP $612.5 million to drop a patent-infringement lawsuit against the BlackBerry maker.
“At this particular point in time, I think (NTP’s) next step is to go back and reassure their patents,” said Rob Enderle of The Enderle Group. “There are clearly going to be other folks that are going to be infringing (on those patents) that haven’t licensed from them.”
There are plenty of rumored targets for another NTP lawsuit in the litigation-plagued wireless e-mail space. Microsoft Corp. has been mentioned as a potential target for NTP’s lawyers, and a handful of prominent handset makers may be at risk.
Microsoft already is fighting a lawsuit from wireless e-mail provider Visto Corp.; Visto also has filed suit against Good Technology Inc.
But NTP isn’t likely to initiate any new litigation unless it can convince the government its claims are legitimate. Ultimate rejections of the patents-which could be years off-wouldn’t affect the RIM settlement, but could instantly nullify any pending litigation.
Meanwhile, the tiny patent holder is suddenly flush with cash. Patent lawyer Don Stout reportedly will split half the settlement with the heirs of co-founder Thomas Campana, who died in 2004, while the Washington law firm of Wiley, Rein & Fielding probably will get about a third of the money. The balance will go to nearly two dozen other shareholders.
An attorney at the law firm declined to discuss its financial agreement with NTP, and Stout didn’t respond to a request for an interview.
NTP could use the capital to expand its patent portfolio, although it has been far less active in the market than in court, noted Current Analysis’ Avi Greengart.
“There’s no question NTP is a patent troll,” Greengart wrote last week. “The company never had a successful business built on the patents, while RIM never saw NTP’s patents and independently developed its technology.”
Even NTP’s existing licensing agreements are threatened by the patent review currently under way, according to some legal analysts. It’s possible that NTP’s licensees, which include Nokia Corp., Good Technology and Visto, may no longer have to pay royalties if the patents are ultimately rejected. NTP’s equity stake in Visto, which was acquired under a licensing deal struck late last year, probably isn’t at risk regardless of the patent review, experts say.
If NTP fails to convince the patent office of the validity of its claims, it’s likely the tiny company will simply fade away. Stout agreed last November to head the licensing and enforcement business for Mobile Satellite Ventures L.P., which is developing a hybrid cellular-satellite communications network, and Campana’s heirs may simply be content with their share of the RIM settlement.
“The family could just say that 612 million bucks is a lot of money and walk away,” commented Enderle. “That’s a very real possibility.”
