The real lesson of BlackBerry

Intellectual property

Dec 14th 2005
From The Economist print edition

Defending the patent system is more important than keeping BlackBerry up and running

NOTHING comes to the wronged so easily as righteous anger. After a vicious patent suit, the maker of the BlackBerry—the wireless e-mail gadget that chains the white-collar proletariat to its work—faces the threat of a court-ordered shutdown in America. The service's users (widely known as CrackBerry addicts) fret about coping without it; shareholders of Research in Motion (RIM), the Canadian company that makes the devices, are angry at their wilting share price; and the wider technology industry, from Silicon Valley to Shenzen, watches nervously, wondering what it means for anyone who uses intellectual property—ie, just about everybody.

RIM is generally regarded as the victim of an injustice. Founded 21 years ago by two engineering students who still help run it, the company is being held for ransom by a “patent troll”. The monster emerging from under the bridge is an entity called NTP, which doesn't actually make or sell anything—it doesn't even have a website, for goodness sake. But it has hired a handful of lawyers to enforce its patents and in settlement talks this week, it was demanding almost 6% of RIM's sales in America until 2012 when its patents expire—about $1 billion. NTP's threat of a legal injunction to shut down BlackBerry unless it pays up is viewed as little short of extortion.

The easy conclusion is that the patent system is being cynically used to wreck the livelihoods of honest folks who are the true innovators. That's wrong. The chief lesson of the BlackBerry saga is that patents are there to be protected. If the system is to have any meaning, its integrity must be upheld for the sake of the businesses that rely on it and the public that benefits from innovation.

For a start, RIM itself is the chief author if its own fate. In 2000, barely a year after the BlackBerry was introduced, NTP requested that RIM license its patents (which are based on the work of an inventor who earned around 50 patents over many years). In 2002 RIM suffered so devastating a legal defeat that it was ordered to pay NTP's legal bills. An appeals court largely upheld the judgment against the company this year. During this time, BlackBerry users rocketed into the millions—yet at every turn, rather than license the patents, RIM resisted; and, as it has resisted, the bills have mounted.

Distressed BlackBerry users argue that too many of the world's workers rely on the device for the service to be shut down. But many of their jobs depend on the principle at stake in this case—that the courts should protect intellectual property because it rewards inventors by conferring a real title to an intangible asset. Business requires confidence that intellectual property will be respected and infringers brought to justice, regardless of whether the litigant is using the patent or not. Only with that security will firms patent and license their inventions, thus allowing others to use their ideas.

Fixed-line reforming

This is not to say the intellectual-property system is perfect. America's patent office is re-examining NTP's patents and has declared them invalid—not because they necessarily are, you understand, but for the baffling reason that when such disputes arise, the office wants the patent-holder to defend his title. Moreover, injunctions are not always appropriate in infringement cases—a matter that the Supreme Court has recently agreed to consider. So the system certainly needs reform, but it also needs defending.

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