8 December 2005 Analyst firm Gartner has advised businesses to stop buying BlackBerrys until the maker of the mobile email devices, Research-in-Motion (RIM), extracts itself from an ongoing patent infringement dispute with intellectual property holding company NTP.
The advice follows a US federal court’s decision earlier this week in which Ontario-based RIM was refused a ‘stay of proceedings’ in its legal battle with NTP, suggesting that, unless the two companies reach a private settlement, the court is likely to issue an injunction “effectively ending RIM’s operations in the US,” according to Gartner.
Such a ruling could also endanger BlackBerry distribution and services in the rest of the world; should NTP’s claim be upheld in the US, it could try to enforce its patent claim in European courts.
The dispute centres on five specific patents, named the Campana patents after their late inventor, communications engineer Thomas Campana, who died in June 2004, and which detail how emails move over wireless connections. US-based NTP is a patent holding company owned by Campana’s former lawyer who now controls the patents. The company claims RIM unlawfully uses the Campana intellectual property in BlackBerry devices.
Uncertainty over the outcome of the dispute leads the authors of the Gartner report to advise current and prospective RIM customers, to “stop or delay all mission critical BlackBerry deployments and investments in the platform until RIM’s legal position is clarified.”
The report added, however, that the two companies are likely to reach an out of court settlement within the next three weeks, putting a 60% probability on that happening. Indeed, RIM’s vice president of corporate marketing, Mark Guilbert, said they had been in touch with NTP “through the court appointed communicator.”
RIM claims that if it did, however, lose the right to use the contested technology it has a workaround solution that bypasses the patents. This workaround is as yet confidential, and while RIM claims it is entirely legal, the company’s experience in the courts “does not inspire confidence,” according to Gartner.
The global subscriber base for BlackBerry stands at 3.56 million, a base that is expected to generate revenues of around $2 billion for RIM in its fiscal year to 28 February 2006.