RIM Paid $450 Million For Patents That Aren't Valid
from the whooops dept
It was surprising last month that RIM finally gave in to patent hoarder NTP and agreed to pay $450 million to license their portfolio of patents on fairly obvious concepts. This came just a few weeks after NTP paid RIM-competitor Good Technologies to license the same patents. However, while we missed this story last week, Politech notes that the patent office rejected one of the main patents, and has indicated that it's likely to throw out the rest as well. All this, just three weeks after RIM agreed to pay half a billion to license them. The whole thing sounds pretty questionable. NTP (who might not even really have the rights to these patents) paid one company to license their own patents, pressuring the big fish (RIM) to then license them less than a month before the patent office rejected them. Whoever agreed to this deal on RIM's part really has quite a few questions to answer. They just gave up half a billion for invalid patents on an obvious idea, after the company that might not own those patents had to pay off another company to license them. What was RIM thinking?
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what was RIM thinking
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What was RIM Thinking?
Right about now they're thinking they're going to stop payment on that check ;-)
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Conditions in a contract
If they were smart...
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Re: Conditions in a contract
For the next company in a similar position, paying a similar cost of educating their executives in same manner is optional...
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Re: Conditions in a contract
Won't affect the CEO's bonus tho...thank god for that.
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Re: Conditions in a contract
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normal patent procedure
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Not So Stupid Of The Execs
Many people are asking why RIM ever agreed to pay, and are citing the execs as having made a mistake at that point.
The reason they agreed to pay is because the threat that NTP posed was so great. NTP was asking judges to put an injunction on RIM preventing them from selling any more devices, or from offering service to existing devices. And a judge agreed and gave NTP this injunction. RIM only squeaked out of this (kangaroo) court with a stay of the injunction, which delayed its implementation pending some other legal proceedings.
Now, how's that for business risk? RIM is conducting business under the very real possibility that they will be legally required to stop selling their hardware, and their service.
Under this threat, existing RIM customers can get nervous and move off Blackberry, future customers may choose an email solution that isn't at risk, and investors are well aware of this risk and it depresses the stock's value.
RIM had been fighting these (greedy, anti-innovation, selfish) people at NTP for too long, and realized that it was hurting sales and stock price. When RIM announced they would settle at $450M, its stock price immediately rose 17%.
That 17% stock premium more than covers the $450M, so its not so clear that it was a bad executive decision. RIM frees up their sales team, and removes the sword of Damocles that (thanks to a lousy US Patent system, and equally inept court system) hung over their heads for far too long.
Above comments ask who gets fired, or who gets the pay cut to pay the $450M. The answer is: no one. RIM will need more staff to handle the greater sales and business that the settlement enables. The value of the company has risen, so their is more money to share, and all the employee options are worth more.
I wish we had courts and patent systems in the US that made more sense, and truly rewarded the innovators. But for now, successful, innovative companies and executives will get put in the un-enviable decision of suffering the consequences of court injunctions or paying off the ransom - neither option being good.
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