Tuesday, February 21, 2006
Will they shut off my Blackberry?, Part II
I noted in October that the parties were "locked in a game of chicken": if one side "blinked" the other would garner a windfall, but failure to settle would be devestating for both sides:
NPT and RIMM are locked in a game of chicken with a ticking clock. The US Patent and Trademark Office is "re-examinating" NPT's patents, so NPT is at some risk of losing the claims that got them this far. The courts, however, have concluded that those patents are valid at least until the PTO says otherwise, and they have at various levels favored NPT's case. As soon as the case clears these last appellate hurdles, NPT has the perhaps temporary power to destroy RIMM's business, most of which comes from the United States. RIMM would probably pay a lot to avoid the destruction of its business. On the other hand, if NPT actually enforced the injunction everybody and his brother will switch to an alternative system and RIMM's gushing river of cash will dry up like the Colorado River in California. Without that gushing river of cash, NPT will not collect the billion dollars that it probably wants to settle. RIMM knows that the prospect of losing its grasp on a billion dollars diminishes the likelihood that NPT will enjoin RIMM, but NPT knows that RIMM will just stall if it does not credibly threaten to enforce the injunction.
How, therefore, should NPT boost the credibility of its threat to enjoin RIMM, which will paradoxically decrease the probability that it actually does enjoin RIMM? The answer, obviously, is to appear irrational. NPT has the huge advantage that RIMM has public stockholders and NPT does not. That means that RIMM's management cannot afford to appear to be reckless, so it must negotiate with great sobriety (else it will get sued, fired, shamed, etc.). NPT, however, can appear to be just nuts enough to shut down RIMM. If I were NPT I would concoct some moderately credible alternative to settlement with RIMM -- perhaps it should threaten to sell the patents and the lawsuit to Microsoft, for instance -- and then act all insanely nutty in my discussions with RIMM. If NPT convinces RIMM that it hates RIMM so much that it is willing to put up with some much less appealing deal (the Microsoft fantasy option, for example) than permit RIMM to get away with "stealing" NPT's "inventions," NPT will scare RIMM's sober fiduciaries into settling at some level closer to their point of indifference. Which is, after all, what NPT needs to do to maximize the value of its lawsuit.
Four months on, that's how the Associated Press sees it as well. The two sides are rushing closer, and neither has yet blinked. RIMM's business is suffering -- a little -- and NPT faces a ticking clock at the Patent and Trademark Office. I still think that the only rational result is a settlement, but I confess that even I am getting worried that NPT is going to enforce its injuction. Does that mean that NPT is running a great bluff, or that it really is nuts? Ladies and gentlemen, behold the "rationality of irrationality" in action.
5 Comments:
By 
, at
Mon Feb 20, 10:16:00 PM:
So you mean I might get feeling back in my thumbs again? :)
By 
Cassandra, at
Tue Feb 21, 02:27:00 AM:
Do you have the anticipatory DT's yet?
The spousal unit is safe no matter what, more's the pity. I was actually on the verge of buying one of the monstrous things. Now I'm glad I didn't.
By TigerHawk, at
Tue Feb 21, 06:15:00 AM:
First, what the frack are you doing up at 2:27 AM?
Second, I do not have the anticipatory DTs because I remain fairly confident in my original logic. If I'm wrong, though, it will definitely stress me out.
Third, but, like Sam, my thumbs will heal.
By Cassandra, at
Tue Feb 21, 11:05:00 AM:
I worked all night.
And yes, I do need to ask for more money.
By TigerHawk, at
Tue Feb 21, 11:49:00 AM:
If you need an agent, let me know. You're too old for that shit!
*eagerly awaiting your denial!*
