Chapter One- A collision of fate
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.
Chapter two - The lawyer hired, the die is cast
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.
"In the world of patents, you're not going to get any traction unless you're willing to enforce them," Mr. Stout explains.
Without a target, or a lawsuit, NTP lacked leverage. And according to later court transcripts, RIM apparently didn't take the threat very seriously. NTP said RIM ignored the letter. The Canadian company countered that an internal review concluded it wasn't infringing on NTP's patents. RIM officials insisted they told NTP that. But RIM couldn't produce any evidence at trial that it had ever acknowledged NTP's inquiries -- one in a series of costly mistakes that would later turn the judge and the jury against the company.
If RIM didn't think much of NTP's Jan. 27, 2000, letter, the formal notice in November, 2001, that NTP had filed an infringement case in U.S. District Court for the Eastern District of Virginia sure got its attention. It prompted a terse RIM news release -- the first hint to outsiders of the battle to come. A defiant RIM said the infringement claim was "unsubstantiated" and dismissively characterized NTP's earlier licensing demand as "a collection of seemingly random marketing materials printed from RIM's website."
RIM apparently couldn't look far enough into the future to see the train wreck ahead. Going after the maker of the BlackBerry was a stroke of legal genius. Until zeroing in on RIM, Mr. Stout and Mr. Campana didn't have a prayer of persuading a reputable law firm to litigate the case, particularly on a contingency basis (where lawyers get expenses and nothing else unless they win). But finding a law firm to pursue the maker of the Blackberry -- a favourite toy of young lawyers -- proved a relatively easy sell. NTP quickly hooked up with James Wallace of Wiley Rein & Fielding, a Washington intellectual property lawyer who conveniently happened to be between big cases. Some of his associates were avid BlackBerry users.
The die was cast. Unless RIM quickly conceded something to NTP -- admit infringement and pay a licensing fee -- it would be in for a protracted legal fight and an inherently risky trial.
True to form, RIM's entrepreneurial bosses stood their ground. They regarded NTP as a vile patent "troll" -- a company with dormant patents that preys on successful technology companies to extort fees from a hot-selling product.
Settlement is lawyer-speak. And the RIM and NTP saga isn't just about lawyers. It's also about two proud and determined inventors, and a growing pile of cash.
The lives of Mr. Campana and RIM founder Mr. Lazaridis are almost like bookends: Two working-class kids whose early tinkering with computers drew them into a life of invention and a passion for wireless gadgets. And yet their common bond -- a drive to make a mark as innovators -- is also what would turn a routine legal dispute into an ill-fated battle of wills. One of them wouldn't live to see the dramatic climax.
Mr. Lazaridis and Mr. Campana were born nearly a decade apart, but they had a lot in common. They grew up on the Great Lakes, 500 kilometres apart, one in Windsor, Ont., and the other on the south side of Chicago. They lived in working-class homes and would spend hours in their basements building gadgets. Working in isolation, they quickly developed a fascination and a passion for wireless technology.
Chapter three -- Campana, the born inventor
From the time he was boy, Tom Campana loved fixing things. While others played baseball or joined Boy Scouts, Mr. Campana spent his time tinkering with appliances around the family home in Chicago or heading over to a neighbour's house to work on an old car.
"Nothing made him happier than to fix something that wasn't working," says his father, Tom Campana, Sr. "He had a curiosity about everything."
Mr. Campana was the oldest of four children born to Tom and Kathleen Campana. The elder Mr. Campana spent the war as a radio operator on a U.S. Air Force bomber crew stationed in England. Just 18 years old when he enlisted, Mr. Campana Sr. flew 29 bombing missions over Germany. After the war he returned to Chicago and got married but had few job prospects.
Mr. Campana Sr. finally got a job delivering milk and eventually started his own milk delivery business. Mr. Campana was born on Jan. 26, 1947. Thanks in part to his father's wartime experience with radios, he developed a fascination with all things electronic. As a boy he fixed transistor radios, lapping up everything his father could teach him about how they worked.
His son, Tom Campana III, remembered his father building the family's television set from a kit. He still has a stereo his father built. "He was always looking at how to improve things. It was just his nature," says Mr. Campana III, who works for a Chicago company that builds home theatres.
The elder Mr. Campana fondly recalls the time his son and a friend built a crude computer in the basement of the family home. They scrounged parts from AT&T, International Business Machines and anywhere else they could find them, Mr. Campana Sr. said. The contraption was built into an old cabinet that stood more than six feet high and was two feet wide.
"I couldn't tell you how, but it worked," Mr. Campana Sr. recalled with a smile. After high school, Mr. Campana followed in his father's footsteps and joined the U.S. Air Force. He was discharged in 1971 and returned home to Chicago, where he soon landed at job at the Argonne National Laboratory as a technician working on the particle accelerators. In his spare time, he started his own company -- Electronic Services Associates, or ESA. The company specialized in developing communication systems and early forms of pagers. But Mr. Campana was an inventor at heart and the business struggled financially. It went under once, but Mr. Campana managed to relaunch the company in the late 1970s.
"He was not the greatest businessman in the world," Mr. Campana Sr. concedes. "Even when his business was going broke his employees never missed a day's pay. He went home without paying himself."
By the early 1980s, ESA found its niche and the company became Mr. Campana's full-time occupation. One of ESA's big breakthroughs was developing a paging system that could be used nationally. At the time, pager companies operated on different frequencies, making it impossible to use the same pager in a different city. Mr. Campana created a receiving system that worked on radio waves and allowed pagers to be used across the country. The device was among the first of 50 patents ESA took out.
Around 1985, Mr. Campana helped start another company called Telefind Corp. and ESA became its engineering arm. The two companies developed more innovations to ESA's paging system, including one that could receive up to 14 text messages with a maximum of 500 characters each. That was followed by a device called "Child Finder" that used pager technology to help parents to monitor the movements of their small children.
Mr. Campana wasn't the only inventor fiddling with ways of matching the wireless capabilities of a pager with the power of a computer. A professor in Hawaii, Norm Abramson, a company in Arizona and officials at the U.S. Department of Defence were also hard at work trying to send text messages via pager.
So was AT&T, which wanted to integrate wireless technology into a new laptop computer it was developing, called Safari. In the summer of 1990, AT&T executives caught wind of what Mr. Campana was up to with Telefind and gave him a call.
AT&T executive Murali Narayanan still remembers meeting Mr. Campana in his Chicago office. "He was a kid at heart," Mr. Narayanan recalls. "He was excited about the technology."
Mr. Narayanan liked Telefind's products, thinking they might fit well with the Safari project. AT&T had an e-mail system and a prototype computer; what it lacked was a paging service that could put the two together. But after a year of flirting with Telefind, even demonstrating Telefind's system at the Comdex computer show in Las Vegas, AT&T opted for a larger partner in Skytel.
With no partner and scant resources, Telefind folded at the end of 1991. Owed nearly half a million dollars, Mr. Campana walked away from the bankruptcy with much of Telefind's paging technology.
That's when Mr. Campana hooked up with Mr. Stout, the Washington lawyer. Mr. Stout had spent four years as an examiner in the U.S. Patent and Trademark Office before opening his own successful practice. He'd heard about Telefind from a lawyer friend while they played a pickup basketball game at a local YMCA.
In 1992, Mr. Campana and Mr. Stout agreed to form NTP. The company was never about making things or selling things. It was about protecting potentially valuable ideas, some of which dealt with sending messages to wireless devices. And for nearly a decade, Mr. Campana's patents lay dormant, just waiting for RIM to produce the BlackBerry.
Chapter four - Lazaridis, the entrepreneur inventor
Across the border in Canada, Mr. Lazaridis was also destined to become an inventor. But unlike Mr. Campana, Mr. Lazaridis would surround himself with talented people and figure out early how to make money in the wireless business. Along the way, he would create a Canadian tech success story, with a product that has become to the wireless Internet what the iPod is to music.
"He is a modern Leonardo da Vinci," says Ken Wood, a childhood friend who is now assistant director of Microsoft Corp.'s research lab in Cambridge, England.
Mr. Lazaridis arrived in Canada at age 5 with his Greek parents and three suitcases. His father, Nick, who had been a clothes salesman in Turkey, took a job on the line at the Chrysler factory in Windsor while his mother, Dorothy, worked as a seamstress.
The young Lazaridis quickly gravitated toward technology. He constructed a working pendulum clock out of Lego at age 8. As they entered high school, he and his friend Mr. Wood had built their own computer and programmed it using primitive toggle switches.
Around the age of 10, the two diehard sci-fi fans were inspired by Star Trek to see whether it was possible to build force fields. They gathered chemicals, electricals and other materials, but after months of work, in a rare admission of defeat, they eventually gave up.
"That's one of the things that, however much tenacity either of us had, we never managed to finish," Mr. Wood acknowledges.
Mr. Lazaridis's passion for wireless technology began in his high-school electronics class. His teacher, John Micsinszki, ran the local amateur radio and television club, and Mr. Lazaridis would work in his labs sending signals between Windsor and Detroit. In court testimony, Mr. Lazaridis recalled his teacher predicting that one day wireless devices and computers would be combined to make "something special."
He and a friend won top prize at the Windsor science fair with a solar-powered water heater that tracked the sun. When he headed off to the University of Waterloo in the early eighties, he financed his first year with the proceeds of a buzzer system he had developed and sold to schools' Reach for the Top teams.
When he showed up at university, Mr. Lazaridis was already thinking far beyond the heavy course material and partying that occupied most of his fellow electrical engineering and computer science students.
"RIM was part of a long-term plan for Mike Lazaridis," said Larry Smith, an associate economics professor at Waterloo and an early mentor of Mr. Lazaridis. "He always intended to start and operate his own company."
Mr. Lazaridis impressed Mr. Smith from the beginning. He was smart, focused and full of purpose. But there was no single characteristic that stood out in the undergraduate that suggested he was destined to become one of the country's greatest entrepreneurs.
He had a maturity of judgment that was unusual for someone in their early 20s. Most young engineers focus on applied research, but Mr. Lazaridis talked knowledgeably about the power of basic research and about constantly making things work better.
"He understood from the beginning the importance of economic viability," Mr. Smith says. "But for him it was never about making $100-million."
In the mid-1980s, Waterloo was a breeding ground for young engineers and computer geeks with big ideas. In between partying and co-op work terms, they wrote computer code for Microsoft and dreamed of how to make it big.
But by 1984, Canada was in the midst of recession and Mr. Lazaridis, like many of his classmates, fretted about becoming jobless graduates. He urged others to go out and start their own companies, and a friend finally called him on it: "Mike, if you feel so strongly about it, why don't you start a company?"
In his final year, 1984, Mr. Lazaridis joined the entrepreneurial parade, dropping out of Waterloo just months before graduation. He won a $600,000 contract from General Motors to make assembly line display terminals that could receive wireless updates.
Mr. Lazaridis wanted his company to be called "something Research." But all the good names seemed to have been taken by others. So he flipped it around -- Research In Motion -- a name that would aptly fit his breakthrough product and his rush to succeed.
Mr. Lazaridis later won an honorary doctorate of engineering from Waterloo. But he now tells aspiring techies that it's not the degree he really wanted.
"The only thing I regret is not finishing," Mr. Lazaridis reflected earlier this month as he prepared to speak to a group of university students in Richmond Hill, Ont. After a short pause, he added: "[But]I'm not sure it would have made much difference in the scheme of things."
Mr. Lazaridis, 44, looks more like a restaurant owner than a business icon. Stout, with thick, prematurely silver hair, he's quick to smile and supremely confident.
Mr. Lazaridis poured the money he got from GM into other projects, including a barcode reader for motion picture film called DigiSync -- a nifty device that would later earn RIM both Emmy and Academy awards for technical achievement.
Mr. Lazaridis quickly learned that RIM's future would be in wireless communications -- making devices smaller, more user-friendly and more portable. E-mail was finally becoming mainstream, wireless technology was established, and phone companies were expanding their wireless networks. But consumers were still not ready for RIM's cutting-edge technology.
"It took 10 years before anyone knew what e-mail on my business card meant. And it took another 10 years before it became mainstream," Mr. Lazaridis says.
Getting from there to the BlackBerry would be a story of numerous dead ends over nearly a decade, the work of hundreds of engineers and some serendipitous business alliances.
RIM's big entrée into wireless came after it was hired by Rogers Cantel to write software for an industrial wireless data network it had just bought from Ericsson, called Mobitex. Getting consumers to bite was a tough sell, but its ties with Cantel and Ericsson would bear fruit.
"There wasn't really any perceived value in doing this," said David Neale, Rogers Cantel's director of marketing for Mobitex at the time and now vice-president of service development at Rogers Communications Inc. "In 1990, it was so incredibly primitive and the notion of a connected universe was so foreign."
At a time when the phone firms were focused on expanding their networks to carry wireless voice, RIM was relentlessly trying to persuade executives about the vast potential of wireless data networks.
The other milestone in the RIM saga was the 1992 hiring of Mr. Balsillie, a Peterborough, Ont., native with a Harvard MBA. He was put in charge of business development and strategy, a critical job when the BlackBerry was introduced six years later. He and Mr. Lazaridis made a highly creative and "very tenacious" team, Mr. Neale says.
After a few false starts, RIM rolled out the BlackBerry predecessorin 1996. It was called the Inter@ctive Pager, and was the first pocket-sized two-way messaging pager.
With constant hectoring from RIM, Rogers Cantel committed to investing tens of millions of dollars to upgrade its network so it could carry RIM's service. In 1998, RIM signed contracts with Rogers Cantel in Canada and Bell South in the United States -- its first deals to supply the devices to phone firms. The BlackBerry was on its way.
The breakthrough device was the first BlackBerry, the 950 model. (A marketing firm used by Apple suggested it be called the Strawberry. That wasn't macho enough for Mr. Lazaridis, who opted for BlackBerry.) It was small enough to fit on your belt, big enough to let people type quickly, and so smartly engineered that it could run on two double-A batteries for two weeks. It also provided wireless access to contacts and calendars.
Chapter five - In the courts, the stakes rise
Scroll forward to 2002. RIM was making a name for itself with its wildly successful BlackBerry. NTP was still just three initials in a RIM press release. It was the billion-dollar success story versus the hard-luck inventor.
But that was about to change as RIM and NTP hurtled toward a court date in Richmond, Va. RIM hired a large, venerable Cleveland-based law firm, Jones Day Reavis and Pogue, which had a track record for wearing down less well-financed opponents with paper filings and delays.
From the outset, RIM and its lawyers didn't seem to take NTP seriously. The company was convinced NTP's patents were junk because they codified technology that was already widely in use by RIM and countless others. In legal jargon, NTP's patents were "prior art," and therefore invalid.
But the federal judge assigned to the case, former state prosecutor James Spencer, wasn't impressed. He pushed the case swiftly to trial.
And on Nov. 4, 2002, the two inventors stepped into a court room. It was the first time Mr. Campana set eyes on Mr. Lazaridis.
"What aggravated him most was when they went to court with the lawsuit," his father recalled, saying his son felt that RIM was underestimating him. "And he said 'that more than anything hurt me' and he said 'I made up my mind that if they didn't co-operate I was going to close them down.' " RIM's case hinged on proving that Mr. Campana's patents were not valid because other people had already invented wireless e-mail by the time he applied for his patents in 1991. One of RIM's key witnesses was David Keeney, whose company TeckNow had mastered an e-mail process called System for Automated Messages, or SAM, in 1987.
To prove his point, RIM's lawyers had Mr. Keeney perform a dramatic demonstration for the jury. Using two old laptop computers and a pager, he explained how he could send a text message using SAM. Then he typed "Tommy, the deal is closed" which quickly appeared on the pager.
The demonstration was crucial for RIM because it proved that Mr. Keeney's work had predated Mr. Campana's by at least four years and it made his 1991 patents invalid.
The only problem was that to get the demonstration to work, TeckNow and RIM had secretly swapped in newer software. NTP's lawyer spotted the discrepancy and cornered Mr. Keeney and RIM officials during cross-examination. After a few more minutes of struggling to explain how the newer version was installed, Judge Spencer cut Mr. Keeney off and told the jury to leave the room. "I'll count to 10. I don't want to yell at you," the judge said, admonishing RIM's legal team for the deception.
Then he called the jury back in and told them to disregard the RIM demonstration -- the demo that was supposed to seal its case. It was the turning point in the trial: A judge telling jurors that the defendant's key piece of evidence was fabricated.
"It was a pretty nifty demonstration," said Mr. Wallace, NTP's lead lawyer. "There's no doubt about that. It was just fraudulent . . . The jury now knows they tried to pull a fast one."
It took the jury barely four hours to reach a verdict. They found not only that RIM had infringed on NTP's patents, but that its conduct had been "willful." The court assessed damages of $23-million (U.S.) and a royalty based on the number of BlackBerrys RIM sold in the United States.
NTP applied to Judge Spencer to have the damages "enhanced," in part because of RIM's actions during the trial. He agreed, citing the botched demonstration, calling it "fraudulent" and said RIM had "consistently engaged in a variety of questionable litigation tactics throughout the course of this action."
The judge's ruling swelled the damages to $53-million plus about $4.5-million in legal fees. He also increased the royalty to 8.55 per cent.
Through arrogance, blunder and bad advice, RIM's potential bill had shot up from a few million dollars before the trial to roughly $20-million when its case headed south at trial, to now hundreds of millions of dollars.
And still Mr. Lazaridis and RIM didn't settle. Friends and colleagues say Mr. Lazaridis is uncompromising by nature. "Mike is the kind of guy who doesn't make business compromises. You know how people plead guilty, even when they know they're innocent, just to get a reduced sentence -- Mike wouldn't do that," says Bill Frezza, who worked with RIM on prototype wireless devices in the early 1990s while he worked at Ericsson Canada Ltd.
RIM's legal hole grew deeper still. Judge Spencer issued a surprise order barring the sale of BlackBerrys in the United States. He agreed to stay the injunction if RIM would put an amount equal to the damage award in escrow. The total is now more than $240-million.
NTP wasn't an acronym any more. It had become a serious threat to RIM. By the time Judge Spencer issued his ruling, Mr. Campana had sold ESA and was battling esophageal cancer. A heavy smoker all his life, Mr. Campana underwent radiation treatment and surgery that removed much of his esophagus. He died on June 8, 2004, at the age of 57.
Even in the last few months of his life, Mr. Campana remained proud and defiant, his father recalls. "When I asked him how's it going, he said 'I don't know dad, you know what? I'd just as soon shut them down because I don't want to see them get away with something like that.' "He was a stubborn bugger. He wasn't going to let them get away with it. He was a typical Bill Gates of electronics. He came from out of nothing. What he did, he did with his hands and his mind. I must say I can't blame him for not wanting to get cheated."
Mr. Lazaridis and Mr. Balsillie were equally bent on winning. Immediately after the trial, RIM fired its lawyers and launched an appeal. But that too failed, and so at the end of 2004 the company's new lawyers, Howrey LLP, urged its client to raise the white flag. The result was a $450-million settlement.
But the deal collapsed within months. Rather than improving its offer, RIM launched yet another appeal -- this time to the U.S. Supreme Court. That too would eventually fail.
Around the same time, RIM also mounted a major lobbying and public relations push in Washington. It was eager to convince policy makers that it was the victim of patent trolling gone wild and a dysfunctional patent system. It hired two Americans it knew well -- former ambassadors Mr. Giffin and Mr. Blanchard -- and their respective law firms to persuade members of Congress to save the BlackBerry.
"They were beginning to recognize that the public policy environment can affect their business in the United States," says Mr. Giffin, who was the U.S. envoy in Ottawa from 1997 to 2001.
Mr. Giffin, who heads the public policy and regulatory practice of Atlanta-based law firm McKenna Long & Aldridge, explains that his job is to offer RIM a bit of "strategic advice on the Washington environment."
The job of Mr. Blanchard, who was ambassador from 1993 to 1996, and his colleagues at Washington-based DLA Piper Rudnick Gray Cary was to push the cause of patent reform in Congress, and more specifically, to sway the famously sluggish patent office into speeding up its review of NTP's disputed patents. RIM calculated that Judge Spencer would never turn off millions of BlackBerrys to protect invalidated patents.
RIM and its defenders in Congress played their trump card -- invoking the spectre of another major terrorist attack in Washington. Several lawmakers, impressed that their own BlackBerrys had not failed on Sept. 11, 2001, while cellphones everywhere went dead, warned in hearings that shutting off the devices threatened national security. Even House Speaker Dennis Hastert -- the top Republican in Congress and an avid BlackBerry user -- intervened on RIM's behalf.
The gambit worked. Soon the patent office was spitting out reviews in record time, calling into question the validity of NTP's patents and giving RIM its first bit of good news in years. RIM's reviews had jumped the queue at the notoriously apolitical patent office, surprising even experienced Washington intellectual property lawyers.
The endgame isn't over. Legal experts still expect RIM will have to cough up hundreds of millions of dollars to end its nightmare. Even with most of NTP's patents in technical disrepute, the U.S. justice system has made them legally valid.
A clutch of people are about to become very, very rich. Two-thirds of any settlement would go to Mr. Stout and Mr. Campana's widow and second wife, Joletta, plus a handful of investors who helped finance the case. The rest would go to Mr. Wallace and his team at Wiley Rein & Fielding, which fronted a large chunk of the legal costs in return for a third of the eventual proceeds.
"They're holding a lottery ticket they want to cash out," explains a legal source with knowledge of the dispute. "You're going to see Bentley dealers do very well when this case is over. This case isn't worth that much. It should have been settled a long time ago."
Mr. Stout insists he's not in a hurry to wind up the biggest case of his long career. The notoriety has brought him several new clients. He and his wife have three cars and a nice house. Their kids are out of college.
"You can get mesmerized by the amount of money involved, if that's what it's all about," Mr. Stout says. "The money isn't in anyone's chequing account. You can't spend what you don't have. So it's business as usual."
Mr. Stout, who used to talk to Mr. Campana almost daily, says the money will mean a lot more to Mr. Campana's widow and the Campana family. And it will affirm the value of his life's work, which his family complains has been publicly trashed by RIM.
"I don't like seeing NTP referred to as a patent troll company," says Tom Campana III, Mr. Campana's son. "I take it personally."
Today, more than five years into the fight, Mr. Lazaridis has learned how to handle the emotional ride. But behind the calm demeanour, it's clear that for him, too, this fight is personal. It's his word against that of a rival inventor who still threatens from beyond the grave to destroy the BlackBerry.
"There's a tremendous amount of innovation and hard work that goes into taking an idea and realizing it and then making it into a product," Mr. Lazaridis says defiantly. "There are 16 million lines of code in BlackBerry. Sixteen million. It's hard to imagine 16 million lines of code. They all have to work in harmony and perfection to make this thing do its job. Are you trying to tell me that one little concept is more important than another little concept, and that it didn't take man-years and man-years of effort to make all that stuff work?"
RIM's rocky legal road
in its battle with NTP
Research In Motion has taken a tough case in its battle with NTP and made it even tougher. Here's how things have gone from bad to worse over the past six years.
Jan. 27, 2000: NTP sends a form letter to RIM listing its patents and warning about "direct infringement."
Feb. 2000: RIM gets the letter but does little, if anything, to investigate. A judge later rules its conduct was "not sufficient to meet its duty of care." RIM insists it sent NTP a reply, but it can't find the letter or any document relating to its investigation.
Nov. 2001: NTP files an infringement case against RIM. RIM's law firm files many motions that delay the case and frustrate the court.
Nov. 4, 2002: The trial begins before Judge James Spencer. A demonstration by a key RIM witness is called "fraudulent" by the judge after it's revealed the company altered the software to make sure the demo worked.
Nov. 21, 2002: The jury returns a verdict in favour of NTP. It rules RIM's patent infringement was willful. Damages are assessed at $23-million (U.S.) plus a royalty on U.S. BlackBerry sales.
March 11, 2003: Judge Spencer increases damages to nearly $60-million and the royalty to 8.55 per cent. The extra damages are awarded, he says, because of RIM's questionable and wasteful legal tactics, inconsistent testimony by executives and the botched demonstration.
Aug. 5, 2003: Judge Spencer issue an injunction forbidding RIM from "directly making, using, offering to sell or selling within the United States or importing" its BlackBerry. The injunction is stayed pending appeal.
Dec. 14, 2004: The jury verdict is upheld on appeal.
March 16, 2005: RIM and NTP reach a $450-million settlement, which three months later unravels.
Aug. 2, 2005: RIM takes its case to the U.S. Supreme Court.
Jan. 23, 2006: The Supreme Court refuses to hear the appeal.
Feb. 24, 2006: Judge Spencer will hold a hearing to rule on damages and the injunction.
-- Paul Waldie
NTP patents put
through their paces
The U.S. Patent and Trademark Office issued NTP five patents at the heart of the lawsuit between July, 1995, and November, 2001. After a jury found RIM infringed on the patents, the PTO, in January, 2003, ordered an unusual re-examination. The multistage procedure is expected to be completed this year. RIM is confident the PTO will toss out the NTP patents, but the timing is not in RIM's favour. Examiners won't finish until after the court rules on damages and an injunction.
Sept. 2005: The PTO says it has rejected all of the patents on preliminary review. It continues a secondary round of examination.
Dec. 2005: The presiding judge denies RIM's request to stay legal proceedings while the PTO completes its re-examination.
Dec. 2005: PTO responds to pressure from Congress and criticism from the presiding judge and says it will speed up its review. The agency says it has assigned a special dispatch team that will fast track the review. The news lifts RIM's hopes it might escape any injunction.
Dec. 2005: The PTO says it has rejected four of the five patents on secondary review and continues to investigate the fifth. NTP wins a 30-day extension to respond to the agency's initial rulings, giving it more time before final rulings are issued.
Next: If the PTO issues final rejections of the patents, NTP has three levels of appeal that could take years: the agency's own internal review board, the U.S. Court of Appeals for the Federal Circuit, and the Supreme Court.
-- Simon Avery
- Report on Business Company Snapshot is available for:
- RESEARCH IN MOTION LTD.