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U.S. BlackBerrys may go dark

From Wednesday's Globe and Mail

Research In Motion Ltd.'s existing and prospective customers are being told to stop buying the BlackBerry service, and to demand that RIM come clean on its contingency plans in the face of a possible injunction in the United States.

RIM and its customers are at risk, says Ken Dulaney, an analyst with Gartner Inc. in Stamford, Conn. The prominent technology consulting firm says a court ruling last week raises the stakes to a new level.

“Stop or delay all mission-critical BlackBerry deployments and investments in the platform until RIM's legal position is clarified,” he advised in a research report.

It's a stark warning that the more than two million BlackBerrys in the United States could go dark in the next few months.

The warning throws into disarray a wireless communications tool that has become a staple for business and government workers across the country. And it's all about a four-year-old patent dispute that is now recognized as a key threat to RIM's future.

A U.S. federal district court and an appeals court have both ruled that RIM, of Waterloo, Ont., infringed on the patents of Virginia-based NTP Inc. Last week, the District Court for the Eastern District of Virginia determined that a deal RIM announcement in March to settle the case by paying $450-million (U.S.) to NTP never actually constituted a valid or enforceable agreement.

Anxiety is growing among some of RIM's corporate customers who rely on BlackBerrys for critical communications. In one case recently cited by The New York Times, Northwest Airlines Corp. reportedly demanded a meeting with RIM executives this week to find out what was going on.

RIM says it has designed and tested a replacement version of its BlackBerry wireless system that would let it “work around” NTP's patent claims, but the company has refused to provide details.

Mr. Dulaney questioned the feasibility of that strategy.

“RIM claims its work-around is legally sound, but its history in the courts does not inspire confidence. Moreover, end-user validation and implementation would take time, resulting in a temporary loss of service.”

Others in the telecommunications industry are also questioning the viability of any work-around. Brian Bogosian, chairman and chief executive officer of California-based Visto Inc., whose wireless e-mail software competes with RIM's, said the idea sounds like a “publicity stunt.”

“There's a limited amount of [intellectual property] in the industry, which would make a work-around extremely hard to do given the complexity of the technology,” he said.

Mr. Dulaney recommended that customers “demand that RIM's work-around plans be made available — in detail and in public — and carefully review their legal and operational impact. Gartner advises customers not to sign any agreements that could involve them in the RIM/NTP dispute.”

NTP has said that if it wins an injunction, it will seek a court review of any work-around RIM uses to keep its system running. If the judge ruled in NTP's favour, lawyers say it would leave RIM, and possibly its partners, facing contempt charges.

© The Globe and Mail

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