What NTP’s patent suits could mean for the telecom industry
Frequently asked questions pertaining to NTP’s patent suits against four major telcos.
Now that NTP has decided to sue four major wireless carriers for patent infraction, many people may be wondering what this means for their wireless service. In the following FAQ, we examine, among other things, which patents are being invoked, the possible reasons for NTP’s suits, and predictions on how the telcos will react.
What patents are being invoked in these lawsuits?
Several of them, all of which were issued between 1995 and 2001. There are five core patents that were used both in these suits and in the suit against Research In Motion: patent 5,819,172, which deals with an e-mail system that sends data to a mobile radio through an RF, and which was issued in 1998; patent 5,631,946, which was issued in 1997, and which deals with a system that transfers information from an RF receiver to a processor; and patents 5,625,670, 6,067,451 and 6,317,592, all of which deal with sending e-mail via RF to mobile processors, and which were issued in 1997, 2000 and 2001, respectively.
NTP is claiming that its patents cover systems and technologies that include “mobile e-mail-ready telephones, smart phones and/or other wireless e-mail-ready devices.” Among the alleged violators of this patent are the T-Mobile Wing and AT&T MEdia Net applications.
Why is NTP going after the telcos now?
Frank Dzubeck, the president of Communications Network Architects, points to a couple of major reasons. In the first place, NTP’s victory over RIM has now given them precedent for using these patents to file suit against technologies and services that perform similar functions to those of the BlackBerry.
“Once you establish precedent, now you can take it to courts and you’ll have the leverage to negotiate with lot of people,” Dzubeck says. “When you’ve got this kind of leverage, you always pick the 900-pound gorillas, like the T-Mobiles, the Sprints and so on. From a legal standpoint, they’re the ones that will want to sweep it under rug to just get rid of it.”
Another possible reason for NTP’s new wave of litigation, Dzubeck says, is the patent-reform legislation that recently passed in the House of Representatives, which limits the scope of damages companies can seek for patent infringement. The legislation comes in the wake of the Supreme Court’s decision earlier this year to loosen the definition of what constitutes an “obvious” patent, thus making it more difficult to obtain patents for inventions that are deemed to be the result of “ordinary innovation.”
What implications did NTP’s suit vs. RIM have for RIM’s customers?
In 2003, NTP won an injunction against RIM that would have forced RIM to stop selling its BlackBerry devices. While RIM was successful in getting this injunction stayed on different occasions, there was a close call in 2005 where BlackBerry users could have potentially seen their service cut off. RIM eventually settled the case for $612.5 million in March 2006 and is now licensed by NTP to sell its BlackBerry products.
How will the telcos react to this suit?
Mike Jude, a senior analyst at Nemertes Research, says he expects the telcos to seek a settlement as quickly as possible. Now that precedent for NTP’s suits has been set, he says, there is little point in resisting.
“I’m actually surprised NTP waited as long as they did [to file suit],” he says. “It wouldn’t surprise me if all these guys came out with public statement saying that they expect to see a quick settlement.”
Dzubeck thinks the telcos could decide to band together to fight NTP if they think the new patent laws being enacted by Congress give them a better chance of winning. However, he also believes that quick settlement is still the most likely option.
“If I’m T-Mobile and I’m facing a lawsuit and someone else has lost a similar suit, do I really want to spend all that money to defend myself?” he says.
How will this affect service for these carriers?
According to Jude, the answer is “not much” if the telcos elect to reach quick settlements. The last thing they want to put up with, he says, are potential injunctions against their products and services.
“Just take the lesson of RIM and what they went through,” he says, referring to the BlackBerry shutdown scare in 2005. “They played chicken with the expectations of their customers, but eventually they had to settle.”
