RIM and Motorola Trade Lawsuits

Two tech giants have traded lawsuits, the result of which could have serious repercussions in an increasingly competitive multi-billion dollar industry. Research in Motion (RIM) filed its lawsuit on Feb. 16, stating that rival Motorola was violating nine patents held by the company.

Additionally, the Waterloo, Ontario-based company alleges that Motorola is breaching a 2003 agreement between the two companies by refusing to renegotiate on an extension, which expired in January 2008. The company alleges that its rival is engaging in anti-competitive conduct by attempting to charge "exorbitant royalties" on patents that are essential to its business.

RIM is accusing Motorola of attempting to compensate for the latter manufacturer's declining position in the industry by charging licensing fees intended to disrupt the business of its competitor. Jennifer Erickson, a spokeswoman for Motorola, denied any suggestion of malicious intent on the part of the company, stating "our agreement with them expired and we have been unable to reach a suitable agreement, going forward." (Source: theglobeandmail.com)

Illinois-based Motorola added that it permits others to use its technology if it deems it appropriate and is properly compensated. Motorola responded by filing two lawsuits against RIM that same weekend, charging that the devices made by the Canadian company infringe on its patents. Devices specifically targeted in Motorola's court filing include the BlackBerry 8100, 8300, and 8800 models and BlackBerry Exchange Server software. (Source: news.com)

This is not the first patent infringement lawsuit filed against RIM. In 2002, the company was sued by NTP Inc., a Virginia-based patent holding company, which claimed that RIM wilfully infringed on its patent for wireless email technology. An out-of-court settlement resulted in RIM paying NTP Inc. $612.5 million. (Source: pravda.ru)

The increasing frequency of high-profile litigation is a reflection of the highly competitive nature of the wireless communications industry. Whereas Motorola was a pioneer in the voice communications and RIM has focused on data communications, the emergence of smart phones integrating both voice and data capabilities into one device have resulted in the two companies coming into direct competition with one another.

Additionally, these established leaders face increasing competition from unconventional competitors like Apple's iPhone, which has sold nearly 4 million units since its release.