BlackBerry and the patent trolls
Managing IP is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

BlackBerry and the patent trolls

In 2006, BlackBerry (then called RIM) was the first high-profile victim of a patent troll. Seven years later, as it fights to survive as a business, it could become one

BlackBerry

The motto of the city of Waterloo, Ontario is “stability”. Unfortunately, that seems to be a distant hope for the city’s biggest employer BlackBerry. The company this week said that, in the face of falling numbers of users, revenues and profits, it was “exploring strategic alternatives” including a possible sale.

Maulin Shah and S Farhan Mustafa of Envision IP offer a solution to its woes: “BlackBerry should leverage patent portfolio in seeking strategic options”. They calculate that the company owns more than 3,600 US patents, and applied for 1,344 in 2011 alone, more than either Google/Motorola Mobility or Nokia. They also predict that the company will explore its patent licensing and enforcement options: “While a sale in-part or whole of its patent portfolio may be an option, we believe that aggressive licensing and monetization may provide for a beneficial long-term revenue model for BlackBerry.”

In other words, BlackBerry could become a patent troll.

The irony of this is that the company (then called Research in Motion) was among the first and most famous victims of trolls when it was sued by NTP in a dispute that began in 2002. Facing the prospect of an injunction that could have shut down its entire US network (this was in the days when every US politician, business leader and lawyer came with a BlackBerry surgically attached), the Canadian company settled for a whopping $612.5 million in 2006. (To add insult to injury, some NTP patents were later invalidated.)

The next few months will reveal what becomes of BlackBerry and its extensive patent portfolio, but the Shah/Mustafa solution makes sense in the light of recent developments at Microsoft and Nokia. The former has trumpeted the patent licensing deals it has signed with Android manufacturers, and one recent estimate by Alex Wilhelm on The Next Web suggests that by 2017 Microsoft could be making $3.375 billion a year from Android licensing (beware: there are lots of numbers in here). As Wilhelm says: “We can all but score [this income] as profit”. (Another estimate suggests those figures are on the conservative side, arguing that revenues could reach as much as $8.8 billion by 2017.)

troll classic

Meanwhile, Nokia’s licensing revenues continue to grow, even as sales of its handsets fall. In a quarterly update in April, chief financial officer Timo Ihamuotila said it would earn $650 million this year from licensing its estimated 10,000 patent families (many of which cover fundamental mobile telecoms technologies) and other IP rights to manufacturers such as Apple, which is believed to pay Nokia a substantial royalty on the sale of every iPhone. Nokia chief executive Stephen Elop added that new vendors were creating “significant opportunities” for further growth. Following the company’s half-year report last month, Seeking Alpha estimated that “Nokia is expected [to] generate between $800 million and $1.5 billion in patent license fees and royalty payments annually”.

In the light of recent debates, it would be easy to think that what is or is not a patent troll is always clear. But of course there is, and always has been, a spectrum of patent strategies ranging from pure manufacturers with no IP licensing at one extreme to companies who manufacture nothing but only license at the other. Companies such as IBM, Google, Apple, Microsoft, Nokia and BlackBerry all sit at slightly different points on this spectrum. And some of them are clearly moving towards the troll end.

more from across site and ros bottom lb

More from across our site

CMS, which was told to respond to a cancellation action by February 12 but filed its response a day later, has rowed back on claims about an IT error
The deal could help Rouse gain a foothold in Australia and New Zealand for the first time
With a team of more than 80 patent lawyers and attorneys across 21 European offices, the firm is acting in some of the most high-profile UPC cases
Lippes Mathias has hired three partners and a counsel from Offit Kurman
External counsel for automotive companies explain how trends such as AI and vehicle connectivity are affecting their practices and reveal what their clients are prioritising
We provide a rundown of Managing IP’s news and analysis coverage from the week, and review what’s been happening elsewhere in IP
The winners of the awards will be revealed at a gala dinner in New York City on April 25
Counsel debate the potential outcome of SCOTUS’s latest copyright case after justices questioned whether they should dismiss it
Each week Managing IP speaks to a different IP lawyer about their life and career
The small Düsseldorf firm is making a big impact in the UPC. Founding partner Christof Augenstein explains why
Gift this article