Food for thought: reminiscences on the Blackberry settlement

Many of you may recall the Blackberry settlement of 2006 after which NTP, Inc., a patent owning company received a settlement of over $600 million dollars for patent infringement by the Canadian company Research in Motion[1] [hereinafter RIM]. NTP, Inc. did not use or practice these patents at the time. Prior to settlement of this protracted litigation, the Federal Circuit held[2] that the jury had properly found infringement of most claims in the five patents, and subsequently the United States Supreme Court denied RIM’s petition for certiorari.[3]  Since that fateful decision a worrisome number of United States attorneys and companies have waged war relentlessly on companies which (i) own but do not necessarily practice patents and (ii) enforce their right to exclude others from infringing their  patented innovative products and methods.

According to these attorneys and their business allies, companies that own patents, but do not ‘practice’ them or create products, forfeit their statutory right to exclude others from unauthorized transactions with these patents.[4] Not only is this against the policy and letter of the United States patent statute, but this proposal conflicts with the very longstanding concept of property in the United States. As a very everyday example, think of a family owning a house and then deciding to take a vacation for several weeks. Even though the house is vacant for this duration, does anyone presume that without permission a stranger may enter the house and live there during the owner’s absence?

Now assume that the family returns and finds a stranger residing in the house. The owners proceed to court and ask the judge to issue an order so the sheriff can remove the strange from the house.  However, in defense of his occupancy the stranger states to the judge: “I have the right to stay in the house without permission and without paying rent, because the owners were not using the house for that time period. Furthermore, because they left the house I may legitimately remain indefinitely and without paying rent or any other fees.”

Most people, including the judge, will conclude that this stranger is delusional, because everyone’s everyday implicit understanding of property is that the owner has the right to exclude others (with limited exceptions such as fire access, covid emergencies, etc.) from a residence.  So, why should NTP, Inc.  forfeit its patent ownership rights, one of which is the right to exclude, and which is a statutory patent right as well as a traditional property right? Should there be a substantially lesser remedy or recourse because there is ownership of a house instead of ownership of a patent? Should there be a different outcome even with an immense economic scope of the infringement in RIM’s case? One should note that the enormity of the award to NTP, Inc. directly results from RIM’s business decision to (i) infringe (ii) undertake the risk that the patent owner will not fight, or that the patent owner will lose a lawsuit as well as (iii) assume the risk that the patents are not valid.

In my next article I will examine legal and business events which have occurred since and in reaction to the Blackberry settlement.

©2021 Adrienne B. Naumann, Esq. All rights reserved. Ms. Naumann does not sponsor or endorse the advertisements at adriennebnaumann@wordpress.com.  


[1] Business News, page D2; March 4, 2006. St. John’s Telegram, a division of Transcontinental Media Group.

[2] NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282 (2005), cert denied 546 U.S. 1157 (2006).

[3] Id.

[4] 35 U.S.C. section 154 (a)(1).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: