When an entity conceives an original idea or concept that can benefit the society, such an entity should benefit from the fruits of their labour. Intellectual property laws build on this premise and seek to safeguard intellectual assets, such as formulas, inventions, innovative development, and creative work, from exploitation by third parties. For an invention to qualify as intellectual property, it must meet particular requirements. Primarily, the invention has to be novel. This means it does not exist in any other form or as a different artifact. The general term used to denote previously existing form, such as written documents, blueprints, prototypes or publications, is prior art. Secondly, if it is based on prior art, must demonstrate a non-obvious modification. Thirdly, the invention has to meet a specific need. It must demonstrate clear utility in a specific segment of the society (Weston and Kwanghui, 2008). A recent example of an intellectual property battle involved Research In Motion (RIM), a Canadian wireless communications device manufacturer and NTP, an American patent holding company.
The root of the case was that NTP’s founding inventor, Thomas Campana Jr., claimed to have filed a patent from a wireless paging and mail device in 1991. Research In Motion had launched devices offering wireless email services that appeared to infringe on the patent rights of NTP. As a result, NTP was seeking compensation in the form of royalties, legal damages, and licensing fees for the use of their intellectual property. The company proceeded to serve letters to several companies stating that they were infringing on their intellectual property rights and that they needed to negotiate for licensing rights to continue using NTP’s technology. After the initial communication, Research In Motion ignored the letter. Subsequently, NTP responded by filing a letter of complaint in the U.S. courts with a total count of eight charges of patent rights infringement against Research In Motion. At that time, the United States was the largest customer base for the Blackberry, Research In Motion’s flagship product (Weston and Kwanghui, 2008).
The key challenge that RIM faced in protecting its intellectual property was proving that the wireless paging and messaging devices were not based on the prior art that NTP innovated and owned. NTP had filed patent rights for a similar wireless communication device in the year 1991. This provided a challenge to RIM since if they lost the court case, they would have to compensate NTP. In case they won it, they would be vulnerable since other technology companies could now compete in the same technology niche (Weston and Kwanghui, 2008). Their approach was to demonstrate a prototype of a similar wireless device in court as a means of discrediting NTP’s exclusive patent claims. However, the prototype incorporated modern technology that did not exist at its stated period. This deception on the part of RIM weakened their case and influenced the Jury’s decision of obliging them to pay a fine of $53 million dollars for willful infringement as well as damages for their deception. The ruling took place in November 2002, and it enabled technological companies to learn the importance of stronger safeguards for their intellectual rights. After numerous appeals, re-examinations and negotiations, the two companies settled on a $612.5 million dollar payout to NTP to convince the company to drop all claims (Weston and Kwanghui, 2008).
Some of the industry factors that influenced RIM include poor global patenting systems as well as unclear patent enforcement policies between nations. By 2004, the Federal Circuit Court of Appeal had made a ruling enforcing US patent laws upon all infringers of foreign origin whose products had utility in the USA. A different factor that compounded the challenges faced by RIM was that the US was the largest market for their products. This meant that the case had a direct impact on their bottom line. The legal battle threatened the very survival of the company, a fact that is demonstrated by Wall Street’s reaction to RIM’s decision to settle. According to Weston and Kwanghui (2008), as soon as RIM agreed to settle, their market share value rose up by $600 million.
References
Weston, D. and Kwanghui, L. (2008). Blackberry: A teaching case for WIPO. Melbourne: Intellectual Property Research Institute of Australia.
