Whatever you want to do...Droid Does
The two have been locked in one of the largest patent infringement cases in history. But the sudden collapse of the talks still took investors and users of RIM's e-mail service by surprise. RIM lost more than $1 billion in value in two days, as many investors abandoned the stock amid the uncertainty.
Negotiations in the patent case came to an impasse earlier this month, after RIM said it had been unable to finalize the terms of a mediated agreement with Virginia-based NTP. The two companies had made a tentative deal back in March, in which RIM agreed to pay out $450 million to settle the suit. Details of the negotiations haven't been made public, but some people believe the deal fell apart over which company will be able to license the disputed patents to other parties.
The patents in question were developed by Thomas Campana in the late 1980s and early 1990s. Campana created the wireless e-mail technology while he was doing contract engineering for Telefind, which was working for AT&T on the Safari notebook, a product that allowed data to be received wirelessly. The ideas behind the Safari applications eventually became the patents that are now in dispute.
When Telefind started to run out of money, Campana poured his own money into the venture, according to Donald Stout, the co-founder of NTP. Eventually he applied for patents on the technology.
Recognizing that there was money to be made from licensing, he formed NTP with patent attorney Stout, who had helped Campana get the patents on the wireless e-mail technology and several other patents. Campana died after a long battle with cancer last year, a day after NTP's appeal got under way.
CNET.News.com caught up with Stout, a partner at the law firm of Antonelli Terri Stout & Kraus, to talk about the history of NTP and the significance of the case with RIM.
How did NTP get the wireless e-mail patents?
Stout: The technology was developed by Tom Campana, who was running a contract engineering business called ESA Telecom. Out of his own pocket, Tom financed the development of the technology that he eventually patented.
Then he approached me and said, "Why don't we form our own company?" I had worked with Tom for a number of years, getting him patents. Over his life, I had gotten him about 50 patents. So we formed NTP, and its business is to license the technology that Tom created in his engineering work.
There are probably some people out there who think you are just trying to take advantage of RIM. What do you say to that?
Stout: Tom didn't go out and buy some patent out of bankruptcy and run off and sue someone. The technology in question here was developed in 1990. This isn't something that fell out of the sky and popped into my lap a year ago. I didn't wake up one day and say, "I've just made $450 million." I have personally spent thousands of hours working on this. Bill White, our president, has spent thousands of hours. We put hundreds of thousands of dollars into the company. We've gone through a couple of different lawsuits, where people were trying to take the technology away from us. This was not easy. It has taken a lot of effort.
If you want to enforce a patent portfolio, such as ours, and you get no positive responses from the vendors, sooner or later you are forced with the choice of either doing nothing or asserting your legal rights. We are asserting our rights successfully, and I ask you what is wrong about that? The answer is there shouldn't be anything wrong about it.
So the company doesn't actually build any products?
Stout: Currently not. The patent system gives us the ability to commercialize technology in a slightly different way. Licensing is a product. They call it intellectual property, because you're licensing a property right. You're selling a property right. I could sell you my house; that's a real property right. I can sell you my car; that's a personal property right. Or I can sell you the right to use technology. That's how we decided to commercialize Tom's inventions.
I don't know the exact figures, but I'm sure IBM makes over a billion dollars a year licensing technology. Does anyone say they're doing anything bad? Why in the world are we bad? I don't know this for a fact, but I bet most of the patents that IBM licenses are not in commercial products that they make.
I guess you see this as a viable business model then?
Stout: Yes, this technology is very valuable. You can see the amount of money that RIM itself had indicated it was willing to pay. We couldn't agree on all the terms and conditions, but RIM was willing to pay $450 million. That's a lot of money.
Speaking of the $450 million licensing deal that was on table, what happened? Why did it fall apart?
Stout: The offer was part of the mediation process. I can't go into details, but you can conclude that we just couldn't agree to the actual terms of the agreement.
Why has the case dragged on so long?
Stout: RIM has had opportunities to settle this case, and they decided not to settle it.
You've got to understand something: Most patent disputes don't go to trial. They don't go through an appeal. And they don't involve
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Or perhaps I can patent any combination of protocols running at different layers of the OSI model that no one has ever used before? There are billions of possible combinations. I only need to place my bets on the right combinations (that someone might want to use during the next 20 years)