Last year David Weston and I wrote a teaching case on how in 2000, NTP sued Research in Motion (makers of the popular BlackBerry device) for infringing its patents that cover the wireless delivery of email (free download from WIPO). Well, NTP is at it again, and has just sued a number of firms including Apple, Google, LG, Motorola, HTC and Microsoft that make smartphones. The Washington Post has a brief description of the patents. The earlier case ended with a $600+ million settlement, but that large amount was partly the result of (a) RIM was found to have willfully infringed NTP’s patents and attempted to deceive the court when presenting evidence of “prior art” in 2002, and (b) as the case escalated, RIM faced the very real threat of having its US operations closed down in 2005. A number of the original patent claims were subsequently revoked, but I imagine that NTP is hoping that the larger base of email users these days will give it enough licensing revenue from each of the mobile operators. If you haven’t heard of NTP, that is because the company is sometimes thought of as a patent troll and is not well-loved. In my opinion, the lawsuit also highlights a more subtle problem with the patent system. When successful firms like RIM and Nokia choose to settle with companies like NTP, it gives NTP an incentive and the financial resources to then attack a broader group of other firms. A precedence is also set. It would be better if such firms fought back, e.g., by establishing prior art that invalidates such patents or by pushing back on the claims.
4 thoughts on “NTP Sues Apple, Google, Motorola, HTC, LG, Microsoft”
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Core Economics 
I personally agree with the principle of avoiding the precedence set by settling in the case of patent infringement, but then I quote from legal professionals (who shall remain anonymous) – “it is better to have a bad settlement than a good court case”.
I think with patent law there is too much emphasis on who came up with the initial concept rather than on the investment of resources and effort needed to industrialize and market a commercially successful product. (Everyone loves the mythology of the little inventor competing against industrial bullies.)
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I would urge everyone to help stop this abuse of IP by avoiding patented products whereever possible. Monopolies are bad. Licenses to monpolize are not currently well-structured to protect anyone or anything but market-o-pathic rent-seekers.
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It would be better if [sued] firms fought back …
Better for society, but not for the firm. As you point out, paying off a patent troll makes it more likely that your competitors will also be sued; that is therefore an argument FOR paying up, not against.
I doubt if RIM is upset by NTP’s actions against other phone makers.
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HI Derrida, feeding the trolls to bother your competitors is indeed one possible strategy ? The problem with that is that your firm might end up with a reputation for being an easy target, thus leading to other firms also filing lawsuits.
In the case of RIM, after they showed they were willing to settle with NTP for $600m, they got sued again…. http://arstechnica.com/old/content/2006/05/6720.ars
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