It's the kind of story even a careful newspaper reader might overlook. Tucked at the bottom of an inside page of The Wall Street Journal was a four-paragraph item beneath the innocuous headline: “Pager Maker Gets Patent for E-Mail Delivery.”
Canada's Research In Motion Ltd. was suing U.S. rival Glenayre Electronics Inc. to enforce a newly acquired patent on its BlackBerry wireless device.
“BlackBerry knockoffs will now need a licence from us,” RIM co-chief executive officer James Balsillie warned. “The amateurs out there have to stop.”
That was May 18, 2001. And the now-ubiquitous BlackBerry was just emerging in the United States as a hot new toy for busy executives, politicians and, most notably, lawyers.
That same day, Donald Stout was reading the paper in his spacious 18th-floor office in Arlington, Va. Out his window, the morning sun was just starting to burn the fog off the Potomac River below, giving the veteran patent lawyer a clear view of the Washington Monument and the Capitol dome beyond.
He caught his breath when he saw the RIM story. For a decade, Mr. Stout and his long-time client, Chicago inventor Thomas Campana Jr., had been patiently sitting on a batch of patents for a system to send text messages from computers to wireless devices.
Knockoffs. Amateurs. Who was RIM kidding? That's our technology, Mr. Stout thought. He picked up the phone, setting off an improbable chain of events that has ignited one of the most celebrated intellectual property showdowns in U.S. history. The fateful call put two proud inventors — one Canadian and one American — on a collision course that goes to the essence of what it means to develop something new, claim it as yours and then make it wildly popular, even indispensable.
An obscure patent case that could have been settled for a few million bucks has morphed into a billion-dollar dagger hanging over RIM, an enigma for investors and a distraction for legions of hooked BlackBerry users. A U.S. judge has threatened to shut down RIM's BlackBerry network next month for violating a handful of a dead man's patents — patents that U.S. authorities now concede may not be worth the paper they're printed on.
How it all happened is a twisted tale of bold inventions, hubris, pride, backroom lobbying and one colossal legal blunder by a sometimes naive Canadian startup eager to make it big in the vast U.S. market.
The stakes couldn't be higher. High-ranking U.S. government officials and members of Congress say nothing less than the national security of the world's lone superpower hangs in the balance. Two prominent former U.S. ambassadors to Canada — James Blanchard and Gordon Giffin — have joined an army of pedigreed lawyers and lobbyists whose reputations are now on the line in this epic battle. The case has even spurred momentum for sweeping reform of patent laws in the home of the planet's biggest technology consumer.
Who knew?
Mr. Stout had a hunch he was on to something good. Even before reading to the end of newspaper story, he knew who Mr. Campana should pursue to enforce his patents. There was no doubt. He called his client.
“I thought RIM's claim was strange because we had the position on that stuff,” Mr. Stout, 59, recalls. “We looked at their patents. The choice was made.”
RIM — the brainchild of Mike Lazaridis, an engineering whiz kid — was one of several companies spawned by the University of Waterloo's vaunted tech incubator in the 1980s. By 2001, the company was in a headlong rush to make its BlackBerry a must-have accessory for the executive on the go, even giving away thousands free, including to members of the U.S. Congress.
More than a year earlier, Mr. Campana and Mr. Stout had sent what amounted to a form letter, warning several companies — RIM among them — that they were infringing on wireless e-mail patents. The letter politely invited recipients to negotiate licensing rights with NTP Inc., an unknown company based in Mr. Stout's Virginia home. The initials stood for New Technologies Products. At the time, it was owned jointly by Mr. Stout and Mr. Campana. Its only notable asset was a drawerful of dusty patents.
