Thursday, March 09, 2006

Patent Nonsense: RIM, NTP & Intel

My partner and I had a long discussion last week about the recent scuffle between NTP and Research In Motion. RIM, as the latter is better known, produces and markets the ubiquitous Blackberry.

As I understand it, the major interests in this debacle have staked out two, opposing positions. On one hand, you have large corporations, such as Intel, RIM, and others, who feel that ownership of patents which they require for their own products and services, when in the possession of a company which does not itself market a competing service, is moot. If a company does not market a product, then it is viewed as a "patent troller" which has scooped up a valuable patent solely to impede, and extract a financial windfall from, a larger company that markets an affected product or service.

The general counsel of Intel wrote an editorial in the Wall Street Journal this week protesting that NTP had 'played chicken' with RIM, threatening to shut down its Blackberry service.

On the other hand, you have the patent owners. They feel that the US legal system, and patent law, entitles them to non-infringement of their patent, on penalty of the offending party being directed to cease violating the patent, or come to a settlement.

This seems very clear to me. Intel and its ilk are attempting to use their size and power to unlawfully take what patents are in their way. If you have ever dealt with a large corporation, then you know that their financial staying power, their "deep pockets," can fend off a smaller patent holder for decades without restitution.

Does anyone else recall the infamous case of the inventor of the variable-speed car windshield wiper? He sued Ford for infringement. It took many years, while Ford callously dismissed his attempts to protect his patent rights. As I recall, he won damages from Ford and the other major auto makers who had purloined his invention.

So, in my opinion, RIM and Intel are spouting an entirely self-serving line of reasoning. They claim that they give inventors a "fair royalty" for their patent interests. But is it not true that each case is different? Who can say whether RIM adds more value to a Blackberry if it does not own a key patent for the service? It's entirely up to the two parties to determine what the relative values are, or if there will be a Blackberry. Too bad RIM's management was so sloppy as to let the matter get to this point.

Why does it matter whether the patent holder is the actual inventor, or a purchaser of the patent from the inventor? If it is the latter, does this not indicate that the large corporation in question pursued a flawed product strategy by neglecting to either secure the patent itself, or buy the rights before marketing the affected product? It seems obvious to me that if you market a product and don't control a key patent, then you have found yourself a new partner, or you don't have a product.

It's not like the RIM decision will squelch innovation. Far from it. Now, small inventors everywhere know that their patent rights are less liable to be taken illegally by larger companies. I think it is shameful that a company like Intel allows its general counsel to write an article like the one published in this week's Wall Street Journal decrying the RIM settlement.

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