Although Research In Motion Ltd. has worked to diffuse concerns over its ongoing legal troubles, some of the company’s competitors see RIM’s high-profile court battles as an opportunity to promote their own products.
“We certainly don’t want to knock RIM,” said Martin Schwartz, managing partner with Wireless2Web L.L.C. “It occurred to us that there may be others out there that may be concerned about RIM’s problems looking for alternatives.”
RIM has largely come to serve as a beacon for the wireless enterprise industry, and its BlackBerry wireless e-mail devices have received high-profile backing from congressional members and others. Indeed, it seems RIM has become the company to beat in the wireless enterprise market, although RIM’s sales and customer numbers do no necessarily reflect its command of the industry.
However, most of RIM’s recent press has centered around its court battle with patent holding company NTP Inc. Earlier this month a federal judge issued an injunction against sales of RIM’s products. The judge also stayed the injunction pending RIM’s appeal, essentially stalling a potential ban on RIM’s sales until the company’s appeal of the decision runs its course. Such an appeals process could take years.
To add an extra catch to the drama, RIM also managed to get the U.S. Patent and Trademark Office to re-examine the patents under dispute in the case. The agency previously planned to review four of the five disputed patents, but RIM this month announced the office would review all five of the patents. Legal experts have said the re-examination could take up to several years.
The issue could become a major problem for RIM and its customers. The court ordered that RIM pay $53 million in damages to NTP, as well as 8.5 percent in royalties on future sales. RIM has set up an accounting provision to catalogue its payments to NTP in case the company fails in its appeal.
Indeed, according to RIM’s competitors, the company’s legal problems have taken center stage.
“It comes up every time we’re in a meeting” with a potential customer, said Jill Stelfox, chief executive officer of Defywire Inc. Wireless shoppers “are well aware of those concerns.”
Like Wireless2Web, Stelfox said Defywire sees RIM’s legal troubles as an opportunity to educate potential customers to the alternatives to the BlackBerry. And, Stelfox pointed out, Defywire doesn’t have the patent issues that RIM does.
“Why get in the middle of all that?” she asked. “People are not aware that there are other companies” selling wireless enterprise products.
Defywire plays directly into the market for wireless e-mail and enterprise products. The company’s Mobility Suite offering extends enterprise information-from Oracle Corp. to Siebel Systems Inc. applications-down to wireless devices. Defywire’s PicoTop Mail software allows mobile phones and other wireless devices to access personal and corporate e-mail.
“Our thinking is that we offer an alternative to RIM,” said Wireless2Web’s Schwartz.
Wireless2Web offers Web-based software that allows users to access e-mail accounts from their mobile phones.
In response, Mark Guibert, RIM’s vice president of corporate marketing, said the company will continue to offer its service despite its legal issues. Further, he said RIM’s court battles could affect the entire wireless enterprise industry.
“I think most customers and industry players now understand that the legal process could take several years to complete and that RIM’s business meanwhile continues without interruption,” Guibert said. “I think they also understand that this is an industrywide issue and that RIM is simply the first company to face NTP in court because RIM happens to be the leader in this space. If the NTP patents were to eventually withstand the scrutiny of both the court of appeals and the U.S. patent office, then other companies will face the same problem since NTP’s claims are so broad that they could try to impose the same tax on the entire wireless messaging industry.
“I think that’s one of the reasons why most other industry players are supportive of RIM on this matter,” he added. “If there are smaller players out there talking trash on the subject, it’s likely that they don’t understand the issues and don’t realize that they’re inviting NTP’s attention on to themselves.”
