Analysts Vary on the BlackBerry Suit

Industry analysts are considering the ongoing patent lawsuit brought by intellectual property company NTP against RIM and its possible effects on the future of both companies and the wireless email market. In two separate reports published this week, experts from Forrester Research and Gartner gave their assessments and recommendations. The issue behind the suit is the modern equivalent of claim-jumping. RIM developed technology to push email to client devices without using a third-party server. NTP claims it has patents which predate RIM, and is seeking to bar the Canadian company from operating in the United States. Nervous salespeople and other users of wireless email, shaken by the legal battle, will be either rattled or reassured somewhat, depending on which report they read and believe. The outlook, at least on the surface, is either "don't worry" or "start making alternate plans." On the guarded-but-positive side, Forrester's Ellen Daley, principal analyst for telecom and networks, believes the two companies are at a stalemate, and that RIM's nigh-omnipresent products and service likely will stick around for some time. On the slightly more negative side, Todd Kort, Gartner principal analyst and report coauthor, believes recent court decisions have weighed heavily against RIM's chances. Analysts do agree that the most likely result is another settlement. The Gartner paper suggests a 60 percent probability that RIM and NTP will reach a new agreement within three weeks; Forrester also notes that the U.S. government's statement that BlackBerry is an essential service gives RIM time to make another settlement offer. However, a settlement only solves RIM's problem with NTP, and even total victory is not a panacea for the company's ills. The time and cost of fighting in federal court "makes an entry for competitors like Microsoft and Intellisync," Daley says. The recently released Microsoft Exchange 2003 SP 2 messaging solution upgrade with push server technology could be a challenger to a weakened RIM, though devices using Windows Mobile 5.0 and the server system won't be available until Q1 2006. Nokia, Intellisync, and others also have offerings on the market or coming soon. "On November 30 the judge put things into harsh reality for RIM," Kort says. "Not only did he invalidate the settlement offer RIM made to NTP in March, but he stated he was unwilling to wait for the United States Patent and Trademark Office (USPTO) to give its final ruling on the validity of NTP's patents." RIM had previously requested a stay of proceedings pending reexamination by the USPTO. Gartner recommends that customers stop all investments and deployments of BlackBerry technology until RIM's legal position is clarified, though Kort says, "It wasn't a unanimous decision among [the report's coauthors] that BlackBerry users should freeze deployment. It's hard to tell people in mission-critical deployments, like hospitals, that they have to stop using wireless email." RIM claims it has an alternative to the disputed patent technology, but it has not seen daylight yet. Daley and Kort agree that RIM can wait until the case is decided before releasing a solution. The situation is not so clear-cut, according to Daley, since both sides have had small victories recently. The ruling to not uphold the settlement agreement is a setback for RIM, Daley says, "on the same day the USPTO provided a nonfinal patent rejection of one of the patents being used in the case." Daley says this rejection "cripples NTP's original case," and believes that, regardless of the eventual outcome, service will continue. "Nobody wins if service is shut down. If the judge does rule to enforce the injunction, there would likely be a 30- to 60-day grace period," Daley writes in her analysis. "Of course, it would be corporate suicide for RIM to let the service stop--even if it means paying NTP considerably more than the original $450 million." Daley recommends that customers put some effort into a contingency plan. "Business and service will most likely go on as usual, but an injunction is not a zero probability. At worst, planning will be a small waste of time and effort." Kort and the other Gartner analysts also recommend seeking alternative solutions, but advise caution. "Companies like Good Technology and Intellisync also have messaging solutions, but they are based on NOC as well," Kort says. "Patent technology is like a house with land--you don't have to break into the house for a judge to consider it trespassing." Related articles: Microsoft Mobilizes Messaging CRM's High Wireless Act BlackBerry Devices Get Instant Messaging

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