ACCORDING to Steve Walden’s business card, the 38-year-old technology expert is based in Boulder, Colorado, but don’t try to get him there. Walden started last week in Watford and ended it in Amsterdam. With customers and colleagues spread across continents and time zones, Walden relies on e-mail to stay in touch.
Last Thursday night in the Dutch capital’s Renaissance hotel, the vice-president of Pitney Bowes, the document-management firm, was having difficulty getting a connection on his laptop.
“I’ve been trying to log on in my hotel room but I can’t get a connection,” he said. Not that he was too bothered.
Like 4m others — from pop stars and politicians to chief executives and doctors — Walden is hooked on his Blackberry.
Walden’s company e-mails go straight to his Blackberry wireless phone and e-mail device. “I spend a lot of time in airports and at train stations. That used to be dead time for me,” he said.
Now he spends that time tapping away at his Blackberry’s tiny keys. “I’ve had this thing for six months and it’s already become critical for me,” said Walden.
His views echo those of many Blackberry users. The devices are so addictive that they have been labelled “crackberries”. But soon Walden’s Blackberry screen and those of users across America could go black, put out of action by a battle over patents.
For a decade Research in Motion (RIM), the Canadian maker of Blackberry e-mail devices, has been in dispute with NTP, a tiny American holding company. NTP claims to hold the American patent rights to some of Blackberry’s technology. The two sides are locked in an increasingly heated battle. If an agreement can not be reached, NTP is threatening to pull the plug on America’s Blackberry users.
NTP’s patents do not stretch beyond America, but the threat does. With so much business going through or originating in the United States, a blackout across the world’s biggest economy would have an enormous impact on RIM and its customers around the world.
Last Monday the United States Supreme Court rejected a bid by RIM to review its patent dispute with NTP.
The court’s decision means that the case is now back in the hands of Judge James Spencer of the Federal District Court in Richmond, Virginia. Spencer has so far seemed sympathetic to NTP’s arguments.
The judge is now considering a request from NTP to impose a ban on the sale and use of most Blackberry hand-held devices in the United States. If passed, the injunction could come as soon as next month.
News of RIM’s latest legal problems flashed up on Blackberry screens across Davos, Switzerland, last week, where many of the world’s top executives, heads of state and public-policy-minded celebrities were gathered for the World Economic Forum.
Peter Levene, chairman of the Lloyd’s of London insurance market, told Reuters: “It’s just nuts. The idea that someone is just going to switch it off in three or four weeks, even if it’s only in the United States, is crazy. Everybody has adapted their working habits to it. If you close it off at a stroke, the damage could be colossal.”
William Parrett, chief executive officer of Deloitte USA, told the wire service: “It would be a significant blow. We made sure that all our people had handheld devices at the time of September 11 because it was the only communications tool we had.”
In America, Citigroup, the world’s biggest bank, is putting emergency plans in place in case of a Blackberry blackout. “Citigroup Technology has been working closely with RIM’s senior management and our legal department to ensure we are kept fully informed as this case evolves,” said a spokeswoman. “Contingency plans are being put into place to continue wireless handheld e-mail services in the event that RIM is forced to halt service in the United States."
Back in Amsterdam, Walden said losing his Blackberry would be like trying to work without his mobile phone. “I suppose we did work before we had these things, but it was much more difficult. I travel almost constantly, getting e-mails from customers. If I were to become unresponsive, that would be very challenging.”
NTP’s claim dates back to the early 1990s when RIM was still a small company. A decade earlier, NTP co-founder Thomas Campana, now deceased, had been granted a series of patents on wireless e-mail. The disputes in America centre on how relevant Campana’s 20-year-old patents are in today’s wireless world.
Some large companies, including RIM rival Nokia, have signed agreements with NTP, but the Blackberry company decided to challenge NTP in court. A jury found in NTP’s favour and, after an appeal was rejected, RIM was required to pay a royalty.
Last March the two companies announced that RIM would pay NTP $450m to license NTP’s patents but the deal collapsed. NTP is now asking the court to block Blackberry services to everyone in the United States except government and aid-agency account holders.
RIM is in the meantime challenging NTP’s patents, with greater success. The United States Patent and Trademark Office has issued preliminary rulings against NTP in several cases. But Blackberry could go down long before the patent office reaches its final rulings, and NTP needs only a single patent to be upheld to gain an injunction.
As the countdown to a blackout goes on, both sides are hanging tough. But for all the angry posturing, it is common for American corporate cases to be settled on the court steps. Analysts expect RIM may have to pay out between $700m and $1.5 billion.
This may seem steep to RIM, but no doubt their users will think it is a price worth paying. Perhaps they could have a whip-round at Davos.
