Research In Motion Ltd yesterday provided details of a software workaround that would serve as back-up in case a court rules to shut down its US BlackBerry service later this month.
US patent house NTP Inc is seeking a local injunction of RIM’s BlackBerry service, which NTP alleges infringes on several of its patents. Court hearings on the potential injunction are scheduled for February 24.
A BlackBerry shutdown would affect about 2 million US customers, including Wall Street and other companies, as well as emergency and disaster planning workers, RIM said last month in court filings. The federal government may be the single largest BlackBerry user, RIM said.
RIM previously had touted a software workaround that bypasses NTP’s contested patents, but until now had provided scant details.
RIM’s workaround provides a contingency for our customers and partners and a counterbalance to NTP’s threats, said RIM co-CEO Jim Balsillie, in a statement yesterday. This will hopefully lead to more reasonable negotiations since NTP risks losing all future royalties if the workaround is implemented.
The two companies have been in settlement talks through a mediator for a number of months, following a court ruling in late November that deemed invalid a previous $450m settlement.
Balsillie said yesterday that RIM was pragmatic and reasonable in its willingness to settle for a generous amount with NTP. NTP’s public offer of a so-called ‘reasonable’ license, however, is simply untenable. It comprises illusory protection for RIM and its partners and requires a lump-sum payment for the theoretical life of the patents even though the US Patent Office is expected to nullify them.
Many analysts have said Canada-based RIM would pay as much as $1bn to settle with Arlington, Virginia-based NTP.
The BlackBerry Multi-Mode Edition workaround, can, as its name suggests, operate in different modes that RIM can remotely activate through its network operations center, RIM said yesterday. If its service were to be shut down, RIM said it would activate US mode and the workaround would automatically kick in.
If no injunction is imposed, the software and its underlying message delivery system would continue to run in standard mode, which RIM said is identical to the existing BlackBerry software and system operations. In other words, the workaround would remain dormant.
RIM said users would not notice any change in their BlackBerry or its service once the workaround was downloaded, even in US mode.
New BlackBerries will come pre-loaded with the workaround, while existing BlackBerry users will be able to download the software from RIM’s web site at some future point, RIM said.
Last month, RIM said, in court papers, that BlackBerry users outside the US might have to install the workaround when they travel to the US.
RIM yesterday reiterated that the US Department of Justice and NTP had raised issues that would warrant a transition period following an injunction. NTP had proposed a 30-day grace period, but RIM has argued it should be longer.
RIM has filed new patent applications to cover its workaround designs. The company also received a confidential and privileged legal opinion confirming that RIM’s software workaround designs do not infringe any of the NTP patent claims remaining in the litigation, according to a company statement. The legal opinion was from a leading expert in patent law and workarounds from one of the world’s largest law firms, RIM said.
However, during a quarterly earnings conference call last month Balsille said RIM has various gradations of workarounds that it could employ if NTP takes action against its current contingency software. At the time, he implied that the initial workaround did not effect users’ experience, but that the alternatives may. You keep evoking [a new workaround] until you’re safe, he said. And it’s all done with a software switch.
