Research in Motion gears up for
lawsuit
Wireless messaging: Dispute centres on battery
technology used in RIM devices
Michael Lewis
Financial Post
Research in Motion Ltd. said yesterday it will mount a stringent defence
against a patent violation lawsuit filed in a California court by the
wireless group of key rival Glenayre Technologies Inc.
"Our counsel has told us that we have several key defensible issues,"
said Dennis Kavelman, chief financial officer of the Waterloo,
Ont.-based RIM. Patent experts said a typical defence would be to
argue RIM's technology is not a duplication of engineering detailed in
the patent, awarded to Glenayre's wireless access unit in 1997, or to
seek to have the patent ruled invalid.
In its suit, Glenayre claims RIM infringed on its ownership of
technology used in a lightweight, compact dual battery that powers the
Canadian company's core product lines -- three pager models and its
wireless electronic mail device. The lawsuit seeks unspecified monetary
damages.
Beverly Timm, Glenayre senior counsel, said the company would drop
the suit if RIM agreed to pay a $4-million (US) one-time fee to extend
its non-exclusive licence to the technology.
Mr. Kavelman rejected the offer, saying "we are not in the habit of
paying just for the sake of paying."
Glenayre, with about 2,000 employees and 1998 net sales of more than
$399-million (US), is a main rival to RIM, along with Motorola Inc., in
the wireless messaging market. But while Glenayre shares have fallen
59% since the start of the year, closing yesterday in New York at $3
3/8 (US), up 5/16, RIM has been a market darling, largely due to upbeat
reviews for its wireless messaging products. RIM shares, trading at
about $5 a year ago, gained 15¢ to close in Toronto yesterday at
$43.70.
The share advance has fuelled speculation that RIM, which earned
$2.7-million in its most recent quarter on sales of $24.1-million, is in
discussions with Brampton, Ont.-based telephone equipment maker
Nortel Networks Corp.
Analysts say Nortel may be negotiating for a minority stake in RIM to
gain access to its Internet enabled palmtop two-way pagers and
messaging devices. Neither company would comment on the
speculation. |
