March 7, 2006 4:00 AM PST
For NTP, is there life after RIM?
If you're NTP, first you have to pay your lawyers for grinding out a settlement in the five-year patent dispute with Research In Motion over the BlackBerry mobile e-mail device.
Once that's done, the patent-holding company founded by Don Stout and the late Tom Campana will be sitting on a sizable war chest that could come in handy as it attempts to appeal its recent defeats at the U.S. Patent and Trademark Office and looks over the rest of the wireless e-mail market.
After that, there's a chance NTP will use its hefty arsenal to go after other companies. The most prominent name bandied about on "who's next for NTP" lists is the tech industry's wealthiest company, Microsoft--though such a lawsuit seems a bit farfetched to tech analysts and legal experts.
But speculating about new lawsuit targets could be a moot point if NTP doesn't hold on to its patents.
NTP is expected to pursue appeals of the final rejections levied by the USPTO on the patents at issue in the RIM trial. RIM made that process irrelevant, at least in the companies' dispute, when it agreed to hand over $612.5 million last Friday and take a perpetual license to NTP's patents.
NTP won't have to pay RIM back if it loses its appeals with a USPTO appeals board and the federal circuit courts and the patents are struck down, RIM co-CEO Jim Balsillie confirmed during a conference call on Friday. But NTP would lose the right to seek future damages and would probably lose its existing licensing deals if its patents are eventually invalidated. Some legal experts believe ongoing royalties only have to be paid as long as the patents are considered valid.
Void the patents, the theory goes, and the royalties go away.
"Their first job is to go to work on the patent office," said Martin Reynolds, an analyst with Gartner. NTP can ask the patent re-examiner to amend some of the claims in its patents to make them more specific and avoid the prior art that is the cause of their current troubles, he said. The claims in NTP's patents have been rejected in large part due to the existence of prior art, or an invention recorded before NTP's patents were filed, by the Norwegian telecommunications company Telenor.
Interestingly, Microsoft is already facing a lawsuit filed by Visto, a company that claims the software giant is violating its wireless e-mail patents. Visto is also a licensee of NTP's patents, said Peter Pawlak, an analyst with the research firm Directions on Microsoft.
But the truth is, even if NTP holds on to the patents and does go after Microsoft, it's still not easy to see how it could make the argument it made against RIM work against the folks in Redmond, Wash., according to analysts.
RIM and Microsoft send e-mail over wireless networks in different ways, Pawlak said. RIM's software "pushes" e-mail to devices as it is received, rather than the device having to call into the e-mail server to check for new messages. But Microsoft's software actually puts the device in a type of perpetual query state, where the device checks to see if there is new e-mail and maintains an open connection to the server until e-mail is delivered.
The difference is transparent to the user, but it could matter a great deal to the courts, he said. RIM believed it only had to make minor changes to its system to "work around" NTP's patents. RIM said it had received a legal opinion backing up its modified technology.
Therefore, it's unlikely that NTP's patents, assuming they withstand the appeals and amendment process, will be usable against Microsoft, Pawlak said. Microsoft is also just getting started in the wireless e-mail market, having brought the capability to its products just this year, he said. It doesn't have nearly the customer base that RIM does, making a possible injunction against the company less valuable.
Microsoft, of course, is no stranger to the courtroom. The company's legal resources and cash hoard dwarf RIM's, and given Microsoft's recent strategy of settling its legal disputes with cash payments, it's unlikely that the Visto-Microsoft case will reach the same heights--or depths--seen in the RIM-NTP case, Pawlak said.
Jim Wallace, an attorney with Wiley, Rein & Fielding and NTP's lead counsel in the court case, said another firm is handling the Patent Office review process, and his work with NTP is largely done. Stout did not respond to a request for comment on NTP's future Monday, and a Microsoft representative also declined to comment. The representative was checking into the current status of the Visto lawsuit.
In the end, NTP will likely end up distributing the cash to its investors and eventually disappear as a legal entity, Reynolds said. Campana was the technology heart of NTP, and if not for his death in 2005, the company would probably try to come up with new products with the windfall, he said.
But with Campana gone and RIM knuckled under, it's not clear what will be left to do for this company when the status of the patents is finally settled.
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