Mobile e-mail continues to be a largely untapped market, but the patent litigation industry in wireless is alive and well.
Visto Corp.’s lawyers mobilized once again last week as the developer set its sites on Research In Motion Ltd., claiming the BlackBerry maker is violating four Visto patents for wireless e-mail. The suit, filed in the federal court for the Eastern District of Texas, seeks an injunction that would force a shutdown of the BlackBerry service.
“We’re not seeking any royalties from RIM,” said Visto Chief Executive Officer Brian Bogosian, “we’re asking the court to get them to stop.”
The suit was filed just one business day after Visto scored a victory in the same court against Seven Networks Inc., a fellow California-based developer. A jury awarded Visto a $3.6 million judgment, finding Seven’s service violates five claims and three separate Visto patents.
Seven said it plans to appeal the verdict, and would also modify its software to avoid Visto’s patents. The company also called attention to a review by the U.S. Patent and Trademark Office that has rejected two of Visto’s claims on a “non-final” basis.
Shortly after Visto filed suit against RIM, the BlackBerry maker shot back with a countersuit and hinted that it may also file its own patent-infringement suit against Visto. RIM said its service doesn’t infringe on Visto’s intellectual property, and the company questioned the validity of the patents in question.
Although Visto has similar lawsuits pending against Microsoft Corp. and Good Technology, Bogosian bristled at the suggestion Visto has effectively become a legal firm.
“We’re a company that has over 400 people in 10 different countries,” said Bogosian, adding that Visto has been “reluctantly” pulled into the courtroom. “(But) for us to ignore the fact that some of our competitors are blatantly misappropriating this technology with no license, with no approach to Visto (to acquire a license), would not be doing a service to our customers, our employees or our investors.”
For industry observers, the litigious game of tag may sound like one more verse to a familiar tune. RIM recently paid $612.5 million to settle an epic legal battle against NTP Inc. after it faced a potential shut-down of service to its U.S. subscribers.
Indeed, BlackBerry sales dipped during the final months of the company’s standoff with NTP, as would-be subscribers opted for other providers rather than face a possible shut-down. By seeking an injunction rather than a payoff, Bogosian is likely hoping to spark similar fears and drive traffic to Visto.
While Visto would certainly settle with RIM for the right price, the company joins the legal battlefield well-armed for a lengthy fight. Visto closed a $70 million financing round in November, and has raised a staggering $230 million in nine years.
Bogosian also has the advantage of the Eastern District Court of Texas, which has gained fame as a plaintiff-friendly venue in intellectual property cases. The court-in the small town of Marshall, three hours east of Dallas-has received filings for nearly 150 cases in the last three years, six from Visto alone. RIM is working to move Visto’s suit to a new location.
“It’s beginning to get a reputation as a good place to file patent-infringement lawsuits,” said David Airan, a patent attorney at the intellectual property law firm of Leydig, Volt and Mayer Ltd. “It’s favorable, generally, to individual or smaller patent holders. You can get a quick schedule from some of the judges down there.”
And as with RIM’s battle with NTP, the USPTO is once again prepared to play out a parallel drama while Visto takes on RIM in the courtroom. The office is reviewing Visto’s patents to determine their validity, and may eventually accelerate the process in response to the new suit. But the review will take months, and possible appeals could drag the process out for years.
“At this point, RIM is determined to challenge the case through the court system,” according to a news analysis from Gartner. “Although settlement is always an option, Gartner believes that Visto’s patent disputes are not likely to be resolved promptly. The litigants may spend three to five years in appeals. We expect Visto’s dispute with RIM will be resolved by year-end 2011.”
