Why Research In Motion won't blink
In patent dispute with NTP, the "only thing that matters" right now is a court's judgment about the patents, says co-CEO Jim Balsillie.
A federal appeals court ruled last year that Waterloo, Ontario-based RIM had infringed on NTP patents covering the use of radio frequency wireless communications in e-mail systems. (RIM's BlackBerry devices and messaging service offer users wireless access to e-mail and corporate data on portable devices.) The settlement required RIM to pay about $450 million to license NTP's U.S. patent.
But negotiations stalled between the two companies, after the U.S. Patent and Trademark Office dismissed all but one of eight patents mentioned in the original claim. Continued dismissals by the patent office director could make the nearly three-year patent skirmish irrelevant. CNET News.com spoke with Balsillie shortly before the patent office's latest dismissal.
Q: Just a few months ago, everything seemed fine in your negotiations with lawyers with NTP. What led to the current impasse?
Balsillie: We signed a binding term sheet and we filed a motion to that appeals circuit court. In our view, we are doing everything we said we would.
In its filing with the Court of Appeals, NTP accused RIM of stalling. What's your reaction?
Balsillie: I'm not trying to change the deal. We are trying to finalize it. Four hundred and fifty million dollars is a big check, and the only thing we are trying to get is what was committed by both parties.
NTP argues that big companies like RIM try to bully little companies, such as NTP, that try to make money from licensing their technology. If IBM can make millions of dollars each year licensing technology, why shouldn't a small company be formed to capitalize on technology it has developed?
Balsillie: If they continue their fight beyond us--and they said that they would--they are basically granted a monopoly and it won't be much longer until they extend this patent fight to the carriers and handset vendors like Cingular, Sprint and Verizon.
If they own the patent, they own it. That is the claim the jury found. But so far it has been subject to appeal, and the director of the U.S. Patent and Trademark Office has rejected several of their claims.
What's the worst-case scenario for RIM if you can't reach an accord with NTP?
Balsillie: We have reached an accord that has been signed, and it is before the courts. There are so many shades of gray in this argument. But we expect the courts to uphold the agreement.
It is also clear that we have a deal on the table for $450 million. We're ready to pay that and let that be the amount, but they (NTP) continue to hold out for more.
Uncertainty is never a good thing, especially as it concerns corporate customers. If this drags on much longer without resolution, won't this impact sales?
Balsillie: This has been going on for three years, and sales have been doing extremely well. Let's be honest: Right now, the only thing that matters is what's going on with the appeals court.
RIM was an early leader in wireless e-mail, but now you're feeling the heat from new competitors. Why do you think RIM won't get plowed under by Microsoft, which is now turning its attention more seriously to this business?
Balsillie: There has always been all kinds of competition in this space. There have always been competitive bets. There is room for more than just one company in mobile.
