UPDATED 10:30 EDT / JULY 16 2012

RIM Fined $147M in Milestone Patent Infringement Case, Could Affect All Smartphones

BlackBerry maker Research in Motion has been asked by the court to pay $147 million in damages to Mformation Technologies for patent infringement.

In 2008, Mformation sued RIM for allegedly infringing two of their patents used in the BlackBerry Enterprise Server (BES) – a service used by corporate enterprise customers to manage and secure their BlackBerry devices.  Mformation was able to prove in court that they disclosed information about the technology to RIM during licensing discussions which RIM declined to take.  RIM allegedly included Mformation’s technology in the modified software they used in BES.

“Mformation created the mobile device management category in the late 1990s and was innovating in this area well before most of the market understood the fundamental importance of wireless mobility management,” says patent inventor and Mformation founder/CTO Rakesh Kushwaha.

“Our patents are a core part of our innovative products, and are fundamental to the methods used for device management in the market today. We ensured that our early innovations in device management were put through rigorous legal assessment by applying for patents on these innovations in the United States and abroad.”

RIM hopes for a reversal

It’s not a secret that RIM’s business is not doing too well, so this huge fine will surely put a dent in their wallet.  But RIM hasn’t lost all hope: they’re seeking a reversal on the court ruling, banking on the obviousness of the patent.  RIM already filed a request to reverse the court’s verdict.

“While the verdict is in favor of Mformation on some claims of the single patent remaining in suit, five of eight claims were found to be invalid,” Crystal Roberts, a spokeswoman for RIM, said in an e-mail statement. “The court still has to decide the question of ‘obviousness’ with respect to the validity of the only patent in suit.”

If the court’s ruling is not reversed, there’s a possibility that the price of smartphones would increase in general as the patents pertain to remote management of wireless devices.  Smartphones available in the market get their updates over-the-air and some even allow you to transfer files from mobile device to computer wirelessly.  These capabilities are included in Mformation’s patent and if they don’t want to fined, they would have to agree to a licensing agreement which could lead to an increase in the cost of smartphone production.

RIM losing developer interest?

In other RIM news, Baird Equity Research recently conducted a survey among 200 developers and found out that developers have very poor outlook regarding RIM’s BlackBerry 10 platform.  The survey suggested that developers are losing interest in RIM’s platform  As expected, RIM wasn’t very happy with the survey and was quick to address the issue.

In a blog post, Alec Saunders, RIM’s VP Developer Relations, stated that the survey was very far from what they are hearing from developers in the real world.  Saunders stated that their BlackBerry App World vendor base grew by 157% and that their BlackBerry PlayBook app catalog grew by more than 15,000 apps since 2012 started.  He also noted their recent announcement that BlackBerry App World reached three billion downloads since launch.  But the most important thing Saunders noted is the success of the BlackBerry 10 Jam World Tour being conducted in 23 cities across the globe, which is seeing over capacity registration in almost every city.

“I have been receiving a lot of feedback from developers personally and I can tell you that I am hearing again and again that developers are amazed by how easy it is to work with the BlackBerry 10 tools,” Saunders said in his post. “They appreciate the open nature of our platform, which allows developers to bring their work and their skills and find a toolset that will work for them. The other thing I hear consistently is that RIM simply treats developers better than anyone else in the mobile industry. That is music to my ears!”


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