RIM hit with more patent woes
The U.S.-based International Trade Commission is mulling a ban on imports of Research in Motion Inc.'s signature BlackBerry device because of patent complaints by Motorola Inc. and Eastman Kodak Co.
The ITC announced Friday it is investigating claims that Waterloo, Ont.-based RIM violated a number of Motorola patents in its wireless devices and corresponding software products.
Motorola has asked the ITC to execute cease and desist orders against RIM products in the U.S. while an investigation is underway.
The ITC does not have the power to impose financial penalties, but can order border and custom officials to ensure that products found to be in violation of trademark are denied entrance to the country.
The Motorola-led action comes on the heels of a similar ITC investigation announced earlier in the week, whereby photo company Eastman Kodak Co. alleged Rim and rival Apple Inc. have infringed upon a number of Kodak patents in smartphones.
That motion, too, attempts to halt the sale of all BlackBerrys and iPhones in the United States.
The trade commission is also investigating a complaint by Nebraska's Prism Technologies against RIM involving authentication systems on BlackBerrys such as the Curve 8330.
In all of the cases, the ITC has pledged to provide a time estimate of their investigation within 45 days, but such probes can often take years to complete.
Citing a longstanding policy to not comment on pending legal actions, RIM has offered no comment on any of the cases.
A black cloud of litigation is nothing new for RIM, as lawsuits are commonplace in the competitive technology sector. In 2005, RIM settled a patent dispute with Virginia-based NTP Inc. that had hung over RIM for years. That case was settled out of court for $600 million.
Indeed, there are probably four or five lawsuits against RIM at any time, but they aren't necessarily known about unless they grab headlines, Research Capital Corp. analyst Nick Agostino said.
"The market is saying, 'OK, we know that this is par for the course,' " said the analyst, who follows the company. "It's just part of doing business in the technology world — you're going to win some, you're going to lose some."
Damages have to be in the billions — not millions — for investors to take notice. "Even cutting a cheque for a couple of hundred million isn't a huge issue because they churn out enough cash in one quarter that it's not going to make a huge dent," Agostino said.
Often, the most economical solution is for a larger rival to purchase a smaller player in order to be able to obtain the licence in perpetuity, Alastair Sweeny, a RIM watcher and author of BlackBerry Planet said.
"This seems to be the neatest way to solve this problem. It clears the air so nicely," he said.
With files from The Canadian Press