Violations of Patent Law "Normal" in Today's High-Tech World

Waterloo, ONAs technology continues to evolve at a breathless pace, patent infringement claims and lawsuits have become a fairly normal occurrence. Consequently, two new patent infringement cases against Blackberry manufacturer Research in Motion (RIM), a Canadian company, appear not to be rattling investors in the least. In fact, the Canadian Press (CP) reported on 2/19/10 that there are "probably" about four or five different lawsuits against RIM at any given time.

One of the latest involves a claim by Kodak that the Blackberry maker—based in Waterloo, Ontario—has infringed on Kodak's intellectual property as it relates to digital camera technology used in the Blackberry Storm. CP reports that Kodak accuses Apple of similar infringement in its iPhone.

A Nebraska company has also filed a complaint against RIM alleging infringement on a patent related to authentication systems.

According to Research Capital Corp. analyst Nick Agostino, this is just par for the course—especially for a company such as RIM that rakes in so much revenue each quarter that even cutting a check for "a couple of hundred million isn't a huge issue. It's just part of doing business in the technology world," Agostino tells CP from Toronto. "You're going to win some, you're going to lose some."

The International Trade Commission is investigating a complaint by Nebraska's Prism Technologies against RIM involving authentication systems on BlackBerry phones such as the Curve 8330. The Washington-based commission can block imports of BlackBerry devices with the technologies in question into the US.

At one time RIM paid more than $600 million for a patent portfolio controlled by NTP Inc., a Virginia firm set up to manage a portfolio of patents. More recently RIM agreed to pay $267.5 million for unspecified patents from California-based Visto Corp.

A representative of any patent law firm will tell you that such cases of infringement law can take years to resolve and millions of dollars to fund. A typical trial—even a quick one resolved within a year—could run as high as $3 million.

Shares of the Canadian RIM closed up 78 cents at CDN $74.34, or a tad more than one percent, at the close of trading on February 18 on the Toronto Stock Exchange.