Clear Winners Unlikely In Motorola -- RIM Patent Fight - InformationWeek

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Software // Enterprise Applications

Clear Winners Unlikely In Motorola -- RIM Patent Fight

In a conflict stemming from the failure to renegotiate a cross-licensing agreement that expired in 2003, the two companies traded lawsuits in U.S. district court last weekend.

As with most information-technology patent disputes, there are few clear winners and some obvious losers in the current spat between BlackBerry-maker Research in Motion and Motorola.

In a conflict stemming from the failure to renegotiate a cross-licensing agreement that expired in 2003, the two companies traded lawsuits in U.S. district court last weekend. RIM filed a suit claiming that Motorola infringed on RIM's patents and tried to charge excessive royalties for its own patents. Motorola, in turn, filed two lawsuits against RIM alleging patent infringement.

For RIM, the legal dispute with Motorola takes the Canadian company back to the bad old days of 2002-2006, when it endured a protracted battle with NTP over the intellectual property covering its mobile e-mail system. Faced with a possible shutdown of its service, RIM was finally forced to sign a $612.5 million settlement in 2006.

While RIM continues to hold a dominant position in the smartphone market in North America, it faces stiff challenges from big handset makers, including Nokia, and from Microsoft, which now offers free mobile e-mail service along with its Windows Mobile operating system.

A Wall Street darling for years, RIM has seen its stock slide along with the broader tech industry since late fall. Prominent London-based analyst Richard Windsor of Nomura Securities now has a "sell" rating on RIM's shares.

For users, the dueling lawsuits simply mean that the companies are likely to be distracted from innovation and improving service to devote energy and resources to their courtroom wrangling. Especially troublesome are the Wi-Fi-related aspects of the case: the RIM suit covers, among other things, technology that allows mobile devices to switch to Wi-Fi, according to the company's filing.

As business users increasingly seek "dual-mode" devices that work over cellular and Wi-Fi networks, the patents for Wi-Fi remain in dispute, creating a huge looming risk for not only vendors but also users of such services.

Last June a federal district judge in Texas ruled against wireless-LAN equipment vendor Buffalo Technology in its patent fight with the Australian science agency CSIRO, which holds a 1996 patent underlying 802.11a/g technology -- the core of all corporate wireless LANs and public Wi-Fi networks.

CSIRO also holds a patent for 802.11n, the emerging next-generation standard for higher-speed Wi-Fi that is being finalized by the IEEE. So far CSIRO has refused to provide assurances that it won't sue vendors of .11n-based gear for patent infringements.

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