What were some of the challenges that RIM faced to protect its intellectual property, and how did RIM handle those challenges?

RIM’s success in the industry of wireless technology, more specifically, the e-mail wireless communications, made the organization’s intellectual property a prime target for adversaries that were not involved in the technological innovation industry, but for patent holding firms that were sitting in the background waiting patiently for a big fish to fall prey of their treachery. The success of these patent holding firms in the patent infringement litigation arena opened the gates for RIM’s industry competitors to scavenge from the patent holding company prey.

Some of the challenges RIM faced to protect their intellectual property ignited a myriad of legal battles that wounded the Blackberry giant fatally from which RIM never recovered totally to this date. Below are summaries of litigation battles that originated after RIM, amongst other companies, decided to ignore a licensee contract agreement proposed by a Virginia based holding company in the year 2000. The US intellectual property holding company that sent the memorandum notice to RIM as well as to other technology companies and initiated the downfall of RIM was New Technology Products (NTP).

1. New Technology Products (NTP) Vs. Research in Motion (RIM)

In 2001, NTP, an intellectual property holding company of at least 50 US patents, which focused on inventions in the fields of wireless email and Radio Frequency (RF) antenna design, filed a suit against RIM for patent infringement. NTP was known from actively pursuing and enforcing its patents rights primary assets accused RIM of violating its patents covering the use of RF and wireless communications in email systems (Reeve, 2007).

After five years (2001-2006) of expensive litigation proceedings, RIM settled with NTP by paying the patent holding company $612.5 million (US). What started as a licensing issue that could be solved with much less than $612.5 million turned into a very expensive 5 year litigation battle that could have been avoided by negotiating with NTP when they received their memorandum notice in the year 2000 (Regan, 2006).

This case has become the classical example of how the legal system was misused to enforce questionable patents by a firm that had never produced any innovations of its own (Reeve, 2007).

2. RIM Vs. Glenayre Technologies, Inc.

In 1999 Glenayre filed a patent infringement suit against RIM regarding a patented process involving power generation from a dual battery source. Glenayre’s 1999 lawsuit was dismissed by court in 2001 during the counter lawsuit filed by RIM (FundingUniverse).

In 2002, Glenayre agreed to drop other remaining lawsuits to work together with RIM to develop a new wireless email device.

3. RIM Vs. Good Technology

In 2002, RIM filed numerous suits against 2000 start-up and competitor Good Technology. In March 2004, Good Technology agreed to a licensing deal and settled the outstanding litigation procedures (Shim, 2004).

4. RIM Vs. Xerox

In 2003, while still involved in litigation procedures with NTP and Good Technology, RIM filed a lawsuit against Xerox. The suit was filed in response to discussions about patents held by Xerox that may affect RIM’s business, and also asks that patents held by Xerox be invalidated (Reid, 2003).

5. Visto Vs. RIM

In 2006, RIM was sued for infringement of 4 patents. Visto’s patents were already ruled invalid by a United Kingdom court. RIM settled with Visto in 2009 by paying them $267.4 million plus other undisclosed terms (McMillan, 2006).

6. Motorola Vs. RIM

In 2008, Motorola claimed that RIM infringed on 7 of its patents in various Blackberry 8000-series devices and the Blackberry Enterprise Server. This suit came in response to a patent suit filed by RIM, which claimed that Motorola infringed several of its patents.

In a conflict stemming from the failure to re-negotiate a cross-licensing agreement in 2003, the 2 companies traded lawsuits in the US district courts (Martin, 2008).

On January 2010, Motorola requested that all Blackberry smartphones be banned from being imported into the US for infringing upon 5 of Motorola’s patents. Their patents for “early stage innovations”, including UI, power management, and Wi-Fi are in question. RIM countersued later the same day, alleging anti-competitive behavior and that Motorola had broken a 2003 licensing agreement by refusing to extend licensing terms beyond 2008 (Martin, 2008).

The 2 companies settled out of court on June 11, 2010.

7. Varia Holdings Vs. RIM

On March 19th 2012 Varia Holdings accused RIM of patent infringement on their patent which “results in the display of a list of emoticons for selection by the user.” It seems that RIM’s decision to throw in a quick-access key that allows you to access emoticons on your Smartphone (Kee, 2012).

Their litigation remains open.

8. NXP Vs. RIM

On April 2012, RIM was accused for infringing 6 patents owned by Dutch semiconductor company NXP. NXP claims in a lawsuit filed in US federal court that the Blackberry maker has infringed on patents pertaining to data transmission, GPS receivers on mobile phones, and circuit design and manufacturing. The Dutch company claims that the Blackberry Torch, Curve, and Bold are all in violation of the patents (Dragani, 2012).

NXP is seeking a court order to stop RIM’s alleged infringement activities and damages on lost profits and royalties. Their litigation remains open.

9. Shell Vs. RIM

Also in April 2012 Shell Company from Texas accused RIM of infringing on their patents for smartphones gestures such as screen dragging, double tapping, scrolling and single tapping. These patents were issued to a Taiwanese company (Sentelic) between 2007 and 2008 (Lee, 2012).

The company is seeking damages from RIM for allegedly infringing upon its patents along with the possibility of a permanent injunction against the infringing products. Their litigation remains open.

10. Nokia Vs. RIM

On May 2nd 2012, Nokia filed a patent infringement lawsuit against RIM. The patent relates to technologies such as the power saving functionality of GSM devices, over the air synchronizing of a mobile calendar, an integrated light sensor for regulating screen brightness, and the wireless synchronization of database such as calendars using filters or a data range (Maisto, 2012).

11. Hunter Point Ventures Vs. RIM

On May 8th 2012, a Seattle base company called Hunter Point Ventures files a patent infringement against RIM. The company claims that RIM violated its “method for music play list selection in a portable audio device” (Lee, Ubergizmo, 2012).
Their litigation remains open.

The litigation cases listed above are not an “all inclusive” list of legal suits battled by RIM, but in my opinion, demonstrated RIM’s willingness to confront adversaries in a hostile legal battle vice negotiating for a mutually beneficial solution for the parties involved.

Other challenges that affected RIM deeply were their internal company’s stock exchange scandal, their company higher executive’s mismanagement of RIM’s financial records, the protection of their Blackberry Encryption and Decryption Algorithm, and their bad reputation as an environmental friendly organization.

• In 2007 Co-CEO Jim Balsillie was forced to resign as chairman as RIM announced a $250 million earnings re-statement relating to mistakes on how it granted stock options. An internal review of the company records found that hundred of stock option grants had been backdated, timed to a low share price to make them more lucrative (www.governancecanada.com, 2011).

• In January 2009, Canadian regulators were seeking a record penalty of $80 million (CDN) from the top 2 executives, Co-CEO’s Jim Balsillie and Mike Lazaridis. Furthermore the Ontario Securities Commission (OSC) pushed for Balsillie to pay the bulk of any penalty and relinquish his seat on RIM’s board of directors for a period of time (www.governancecanada.com, 2011).

• On February 2009, several executives and directors of RIM agreed to pay the penalties to settle an investigation into the backdating of stock options. Under the terms of a settlement agreement with OSC, RIM’s Co-Chief Executive Officers Jim Balsillie and Mike Lazaridis, as well as Chief Operations Officer Dennis Kavelman, will jointly pay a total of $68 million (CDN) to RIM to reimburse the company for losses from the backdating and for the cost of a long interval investigation. The 3 were also required to pay $9 million (CDN) to the OSC (www.governancecanada.com, 2011).

• In 2010 RIM was challenged by 2 sovereign countries (Saudi Arabia & India) to disclose their encryption services intellectual property if they wanted to continue doing business in their respective countries. RIM faced the risk to losing millions of customers if both countries banned the use of their Blackberry devices, but RIM stood its ground and somehow negotiated agreements with both countries without disclosing its encryption algorithm (Emigh, 2010).

• In November 2011, RIM ranked last out of 15 electronic manufacturers in Greenpeace’s Re-launched Guide to Greener Electronics. The guide rank manufacturers according to their policies and practices to reduce their impact on the climate, produce greener products, and make their operations more sustainable. RIM appeared in 2011 for the first time with a score of 1.6 out of 10 (Guide to Greener Electronics, 2011).

All this negative internal publicity and their over a decade long history of legal battles with multiple companies did not reflect favorably for a company with their stock options plunging rapidly. Their immediate future is very cloudy and their stockholders are in the brink of jumping ship. The way they handled the company’s challenges were not too wise. Trying to become the industry’s bully by aggressively pursuing their legal options to protect their intellectual property slowly debilitated an industry giant that thought it was the Goliath of the industry, but forgot the ending of the David and Goliath’s story.

What were some of the industry factors that influenced RIM?

RIM was influenced by innovation in the wireless technology arena. RIM researchers realized that paging devices had potential to evolve to send and receive text on a wireless pager network. Those realizations lead to the development of the Blackberry’s unique push technology. This technology allowed emails to automatically show on the device without the lag time of having to refresh the web browser to view new emails received.
The ability to receive email messages in a Blackberry served as one of the main differentiating points that make it preferable to a regular mobile phone. RIM promoted the Blackberry as the replacement for a laptop, and for business professionals who frequently travel, the thought of carrying a pocket size Blackberry over carrying a heavy and sometimes bulky laptop, was an appealing option (Reeve, 2007).

The Blackberry design was also unique. RIM designed and patented the now ubiquitous QWERTY keyboard which was one of Blackberry’s most popular features because it enabled quick typing with the thumbs. RIM brought the Blackberry as the whole solution with complementing services; servers, handheld, software and services that complemented very well the Blackberry’s experience. When RIM first launched the Blackberry they strategically positioned the device as a tool for business professionals (Reeve, 2007).

RIM targeted business professionals as their main customers. RIM created enterprise specific applications that allowed mobile professionals using the device outside the office with access to internal applications such as the company intranet, email, and content-management systems for sales. The enterprise solution was appealing to companies not only because of the service it offers, but also because the data runs over RIM’s network which saves the subscribing company’s bandwidth thereby reducing its communications costs, compared to mobile employees dialing in and accessing the data over the company’s networks (Reeve, 2007).

At the time, there was no alternative to the services provided by RIM. The substitute companies existing at the time provided subpar quality service that wasn’t comparable with RIM’s standards. The Blackberry wireless device was a pioneer in the business communications arena and no other device provided the enterprise support services that RIM provided.

Conclusion

Research in Motion (RIM) was targeted by numerous companies for patent infringement. As many other large innovative companies specializing in the wireless technology, RIM spent a great deal of time and money protecting its intellectual property from lawsuits filed by patent holding firms and adversaries from the industry. Their defense strategy against such lawsuits was not conducive to maintaining harmony and cooperation from its competitors and derailed the wireless device technology giant out of the top rankings in their industry to a very modest position trying to survive its competition.