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December 9, 2005

NTP & RIM Chat For A Bit

NTP and RIM had been talking settlement with each other through a court-appointed mediator this week over RIM's infringement of NTP's patents. RIM shares surged on the news. But the talks seem to have short-circuited, at least for now. Snorted Dan Stout, NTP co-founder, "It's so far off, it's not negotiation."

Don Stout said RIM made a written offer on Thursday, but "they have responded yesterday in a manner which is unacceptable so we're not negotiating. We're not sitting down trying to work out details. In other words, they didn't come close."

Reportedly, NTP would settle for a 5.7% royalty on future Blackberry revenue. That should sound better to RIM than an injunction, which is what's coming up next if they don't settle. But RIM has hung tough throughout the entire process.

RIM's revenue last quarter was $490 million, $1.35 billion over the past year, and most Blackberry subscribers are in the U.S. RIM is based in Waterloo, Ontario. NTP's patents last to 2012. NTP's 5.7% offer could tote up to $1 billion for NTP over the term of the patents.

RIM had earlier announced a workaround to the patent infringement. The Wall Street Journal reported that "technology consulting firm Gartner Inc. recommended customers hold off on BlackBerry investments, saying the proposed workaround is problematic."

Earlier entries on the NTP v. RIM story: RIM Down, Dirty RIM, Smug RIM, RIM's Silver Lining, RIM Bleeding, Supreme RIM Shot, RIM Shot.

Posted by Patent Hawk at December 9, 2005 3:01 PM | Litigation


There needs to be recourse for companies like RIM if the NTP patents are invalidated (as the USPTO hints that they will do in their pre-final report).

As it is, even if NTP loses those patents, they could walk away with not only a huge chunk of RIM's settlement money, but also with doing a tremendous amount of damage to the company. Their stock has suffered and undoubtedly their sales have suffered.

If the patents become invalid, it would be nice if RIM could countersue NTP for damages, including lost sales, stock price, and liable. But no such path of recourse exists. We need some reform to fix this problem, giving a detriment to patent trolls and a means of recovery to those vicitmized by patent trolls.

Posted by: joey5 at December 9, 2005 3:30 PM

The above comment ignores that RIM has been found guilty in courts of law, even through appeal, of patent infringement. RIM had its chance to invalidate NTPs’ patents, and it could not. As the judge in the case said, the patent office doesn’t tell him his business, and he won’t tell him theirs. The court should proceed. If NTPs’ patents are found invalid through re-exam, then RIM has only itself to blame for not initiating that process earlier.

Posted by: Patent Hawk at December 9, 2005 3:45 PM

"the patent office doesn’t tell him his business, and he won’t tell him theirs."

Wha? This makes about as much sense as punishing RIM in the first place: none.

But you know what? I guess you and I are actually hoping for the same outcome with this one. I'm hoping that the judge issues an injunction and shuts the BlackBerry down. That would be awesome. The number of people that would become irate about the state of the patent system would be tremendous. Maybe some would even push their elected officials to enact reform that made a difference.

It really isn't hard to convince even the masses that a thing is oppressive and ridiculous when we've got examples like RIM v. NTP. For that we can all be thankful.

Posted by: Enrique at December 9, 2005 9:35 PM