James Balsillie, chairman and chief executive officer of Research in Motion Ltd., cut right to the chase. You’d expect no-nonsense talk from a fellow still fuming from having to write a fat, $612.5 million check to a small Virginia patent-holding firm to make it go away.
Such was the backdrop for Balsille’s appearance last Wednesday before the House Judiciary subcommittee on courts, the Internet and intellectual property.
“Despite clear evidence that the Patent Office had rejected the NTP [Inc.] patents and was very likely to declare these patents invalid, RIM was effectively forced to pay one of the largest settlements in U.S. history in order to end NTP’s highly publicized threats and the associated uncertainty felt by RIM’s U.S. partners and customers,” said Balsillie.
Why did RIM have to suck it up? Simple. Its biggest market is the United States. Its biggest customer is the U.S. government, a huge pool of BlackBerry addicts in Congress, Department of Defense and Department of Homeland Security. A RIM shutdown undoubtedly would have brought America to its knees.
The raucous RIM-NTP debacle could become the tipping point for a serious examination of an overstressed and under-funded U.S. patent regime that’s being gamed into senseless submission at the cost of American innovation and global competitiveness.
Yes, an American company bested a Canadian firm in the now-settled patent lawsuit. But it appears to be a Pyrrhic victory, one that bodes ill for America’s telecom and high-tech sectors. The big winners were NTP and its lawyers, pharmaceutical and biotech industries, and small inventors-a strange mix that helps explains why finding common ground and a level playing field has proven elusive. Yet, some might argue the top-dollar RIM-NTP settlement is symptomatic of a patent system gone terribly awry.
It seems hardly a day goes by these days without news of another telecom or high-tech patent suit. But that is the information-based economy we live in today.
Jon Dudas, director of the U.S. Patent and Trademark Office, pointed to a recent report that said U.S. intellectual property is now worth $5 trillion to $5.5 trillion, or about 45 percent of the U.S. gross domestic product. Dudas said USPTO received more than 400,000 patent applications in fiscal 2005, an 8-percent jump from the previous year.
“That volume and growth rate present significant operational challenges as does the increasing complexity of those applications,” Dudas stated. In spite of the hurdles, Dudas praised the USPTO workforce. But kind words are not enough. Fair reforms, supplemented with increased financial resources and manpower, would make for a nice day at the USPTO.
