February 27, 2006
Please Don't Take My Blackberry Away- RIM Vs NTP
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Jack Horgan - Contributing Editor

by Jack Horgan - Contributing Editor
Posted anew every four weeks or so, the EDA WEEKLY delivers to its readers information concerning the latest happenings in the EDA industry, covering vendors, products, finances and new developments. Frequently, feature articles on selected public or private EDA companies are presented. Brought to you by EDACafe.com. If we miss a story or subject that you feel deserves to be included, or you just want to suggest a future topic, please contact us! Questions? Feedback? Click here. Thank you!

On February 1, 2006 RIM issued a statement characterizing a recent ruling by the USPTO as “maintaining the outright and complete rejection of all claims in the '592 Patent, which includes five of the seven claims that RIM was ruled to have infringed by the Court of Appeals for the Federal Circuit in August, 2005. In addition the ruling confirmed that no grounds for patentability of the '592 Patent were found by the Patent Office in the course of its reexamination.” And “In all of the Patent Office rulings to date relating to the reexamination of all eight of the NTP patents, NTP's arguments on the merits of patentability have been rejected by the Patent Office.”

On February 9, 2001 RIM announced workaround contingency. RIM has incorporated the workaround designs into a software update called BlackBerry Multi-Mode Edition that has been developed and tested as a contingency. RIM has also filed new patent applications with the Patent Office to cover its workaround designs. BlackBerry Multi-Mode Edition is so named because the software is capable of operating in different modes that can be remotely activated by RIM through its Network Operations Center (NOC). In the absence of an injunction, the software and the underlying message delivery system can continue to run in “Standard Mode” (identical to the manner in which the current
BlackBerry software and system operate) and the workaround will remain dormant. In the event of an injunction, RIM is able to remotely activate “US Mode” via its NOC and the workaround designs would automatically engage for each handset containing the Multi-Mode Edition software update.

According to RIM “Although the development of this modification required substantial R&D effort from RIM and would require software updates in the event of an injunction, RIM has ensured that the industry leading functionality, performance and user experience remains intact." The firm also said that it has received a confidential and privileged legal opinion confirming that RIM's software workaround designs do not infringe any of the NTP patent claims remaining in the litigation.

On February 24th RIM confirmed today that it has received a copy of a Final Office Action issued by Patent Office in the ex parte reexamination of NTP, Inc. Patent #5,436,960. This Final Office Action maintains the outright and complete rejection of all claims in the patent. All of the 3 patents remaining in dispute in the NTP vs. RIM litigation have now been rejected based in part on prior art not considered in the 2002 trial in the United States District Court for the Eastern District of Virginia.

A hearing was scheduled for February 24. The Judge had said he was unwilling to delay his proceedings while awaiting final word from the patent office. Speculation on the possible outcome is rampant. Observers of this four year long drama are expecting Judge Spencer to issue some sort of injunction although probably not on the data of the hearing. The question will be when, for how long and how broadly it's imposed. NTP, of course, wants a broad injunction. RIM is asking the court not to impose an injunction on devices that have already been sold. The company argues that because of the jury verdict, it already has an implied license with NTP on these devices, and so they shouldn't be
covered by an injunction.

At the hearing NTP, Inc. asked the judge to award it $126 million in damages and issue an injunction against the maker of the popular BlackBerry wireless e-mail service for violating its patents.

RIM is clearly not an EDA firm. However, it is a significant user of EDA products. It employs 3,555 people. Of this number 1,000 are engineers in its R&D organization focused on areas such as antenna design, RF engineering, industrial design and software engineering. They also have a significant manufacturing operation.

Why then should we be interested. This well publicized legal drama is perhaps the classic example of what is wrong with the current operating philosophy of the USPTO. Knowing that the organization has insufficient personnel to properly investigate each patent application in true detail, it has opted for issuing patents and letting those impacted challenge their validity. Of course with the office's limited resources any challenge can itself be very lengthy and costly. Also many patents that are granted are seen as overly broad. Just as firms who are the target of nuisance lawsuits often settle to avoid the cost, distraction and bad public relations, targets of patent suits often pay
licensing fees rather than challenge what they consider to be improperly granted patents. This acquiescence then gives credence to the patent claims that can be leveraged in subsequent lawsuits.

In this case at one point RIM was willing to pay $450 million, roughly one years revenue at the time, for licensing patented technologies from NTP whose patents RIM considered to invalid. The court was impatient and stated unwillingness to wait until the legitimacy of the patents could be determined even when the USPTO issued non-final positions that the patents would be likely found invalid. Many legal observers were critical of RIM for not settling sooner.

EDA and semiconductor firms are on both sides of this issue. They clearly want strong government protection of their intellectual property which is often their principal asset. They seek Washington influence to get similar protections around the globe notably in China. EDA firms aggressively defend their patent rights in the courts. For example, Magma and Synopsys are currently embroiled in a patent suit. On the other hand it is not in the industry's best interest to have patent firm running around seeking licensing fees for overly broad and likely invalid patents.

In a filing with the Supreme Court, Intel's lawyers said the company is torn. As an investor of billions of dollars into research and development, the company is among the nation's leaders in obtaining patents and wants to protect itself against infringement.

At the same time, Intel also is frequently accused of infringement and wants clearer rules that protect it from small patent-holding companies that have little infrastructure and produce no products.

Regardless of the outcome of the February 24th hearing, the RIM vs NTP will likely drag on in the courts for some time. The resulting legal precedent as well as the length and the cost of the legal battle will greatly influence how firms respond in the future to any similar situation.

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EVE to Provide Hardware-Assisted Verification Platform for Tensilica's Diamond Standard Processor Family Tensilica's new Diamond Standard family of processor cores will be made available pre-programmed into EVE's hardware-assisted verification platform to offer a fast prototyping vehicle to generate embedded software for SoC design. Tensilica customers can purchase EVE's ZeBu-Diamond that includes a single Xilinx Virtex 4 FPGA pre-loaded with one of Tensilica's Diamond cores. The debugger in Xtensa Xplorer, Tensilica's integrated development environment, is linked to ZeBu-Diamond to provide
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Agilent Technologies Announces Simulation Breakthrough for Highly Non-Linear Circuits Used in RFICs; Competitive Trade-Up Program Offered The core circuit simulation technology of Agilent's EEsof EDA Advanced Design System platform is frequency-domain harmonic balance. This enhanced harmonic balance simulation technology is available as an update to the Advanced Design System (ADS) and RF Design Environment (RFDE) simulation software packages. Agilent RFDE is an RF EDA software environment that tightly integrates leading RF simulation technologies from Agilent ADS into the
Cadence Design System industry-standard analog and mixed-signal design flow. For a limited time, users of competitive tools may receive a credit of up to 100 percent of the purchase price of their current software toward the purchase of select Advanced Design System (ADS) or RF Design Environment (RFDE) products.

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-- Jack Horgan, EDACafe.com Contributing Editor.


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