May 4, 2012Science and Technology
Nokia Lawsuits and the Fall of RIM

"But in the decline of the empire, when every principle of health and life had been exhausted, the tardy application of this partial remedy was incapable of producing any important or salutary effects." -- Gibbon's Decline and Fall of the Roman Empire

Nokia is taking HTC, ViewSonic, and RIM to court over 45 mobile patents. Three courts, in fact -- a district court in Delaware; the Regional Court in Dusseldorf, Germany; and the International Trade Commission. After coming to terms with Apple last year, and currently in bed with Microsoft, the Android-focused manufacturers seem like a natural target for Nokia... but RIM? That's just mean.

Patent litigation is the new competitive strategy, and the International Trade Commission is the new US Patent Court. None of this is news to IP and tech followers, but the unfolding drama of the mobile market continues to provide us with examples of how the once-mighty are bringing out their final weapons, last resorts in a grab for fading glory -- while those behind the scenes are making deals to position themselves to strike at the first sign of weakness.

A thrilling tale, certainly, but complicated by the shifting roles and loyalties of all involved. With Apple and Google dominating the mobile market, manufacturers such as RIM and Nokia are left alternately squabbling with each other over shrinking territory, while Microsoft (never yet mighty in the mobile sphere) keeps hope alive for a come-from-behind victory.

Any discussion of Research in Motion at this point runs a high risk of kicking them when they're down. Once synonymous with smartphones, the BlackBerry manufacturer has become synonymous with failure and desperate moves over the past six quarters.

When co-CEOs Mike Lazaridis and Jim Balsillie ran the company, BlackBerrys evidenced a similarly successful split personality: a cutting-edge enterprise tool that captured a surprisingly trendy zeitgeist. Rock-solid "push" messaging for business and government cemented sales, while marketing virtually took care of itself when celebrities (and those who love them) discovered that they simply HAD to have one. With an iconic appearance and a variety of uses, the first generation of smartphones belonged to CrackBerry -- even Barack Obama campaigned with a BlackBerry glued to his ear.

One can theorize that the company continued to believe in playing to their existing strengths for too long; certainly, the iPhone's stellar success (and Android's rapid pursuit) showed as early as 2007 that the future was in multitouch and apps. By the time that RIM accepted a "transformational" approach (first touchscreen models  in 2008, App World debut in 2009, first WebKit browser in 2010, and the disappointing PlayBook in 2011), the damage had already been done. The trendy fans had fled, the President was seen with Apple devices, and even the professionals were discovering that Apple and Google offered more flexibility for business usage.

RIM was essentially coasting on embedded corporate and government customers, but on borrowed time -- and holes in both security and service were becoming undeniable. Diehard fans still praised BlackBerry Messenger, but even this efficient and secure free communications service became a well-publicized liability when the London riots of 2011 became known as the "BlackBerry Riots" in the UK press. What had seemed like one of the few bright spots in RIM's quarterly reports -- the continued popularity among teens in the UK -- was interpreted by the media and Parliament as a scapegoat for urban violence, and a likely tool for terrorism.

Reeling from negative publicity, and unable to mollify shareholders, RIM was then struck by a devastating four-day service outage in October 2011. The calls for executive restructuring became constant and insistent, and Lazaridis and Balsillie celebrated the new year by stepping aside as CEOs. And yet replacement CEO Thorsten Heins keeps insisting that he'll "stay the course," which would seem laughably absurd if it wasn't so patently mendacious.

RIM CEO Heins holds up a prototype of the BlackBerry 10 at BlackBerry World event this week.There's QNX, and the forthcoming BlackBerry 10 OS based on QNX, but there's also noise about RIM focusing on HTML5 to interest cross-platform developers who would otherwise be nonplussed about investing coding time in the company's products. There's wild theories about renting out BlackBerry nodes and licensing the OS, there's continued executive restructuring, and there's the (unfunny?) observation that the only movement created by RIM's recently-announced new product line and development tools was a 6 point drop in the already-plummeting price of RIM's stocks.

RIM is desperate, and desperate companies do strange things. The only question now is if RIM will follow Hewlett-Packard's lead (fumbling QNX as HP did WebOS while wondering whether behind-the-scenes enterprise revenue can take the place of consumer love, or move toward Kodak-land with nothing but patent troll litigation to sustain them while they sink money into last gasps at cutting-edge relevance. 

Nokia's image is subtly different; market share as well as the fortunes of the Symbian OS have both suffered considerably, but somehow the company has largely escaped becoming much of a laughing stock -- possibly because, even at the height of its dominance, Nokia devices never attained the pop culture status of BlackBerrys. Paris Hilton never flashed a Nokia 6190 for the paparazzi, for instance.

Still, the company's recent performance has been called "overwhelmingly grim," and the Symbian OS has been dead for all intents and purposes since the beginning of 2011. Since then, Nokia has embraced the burgeoning Windows Phone OS, becoming the most active smartphone manufacturer to do so. Nevertheless, legacy Symbian devices still outnumber Windows Phone devices worldwide by about 4 to 1 at the time of this writing, perhaps attesting to little more than the lingering remnants of Nokia's days of dominance. The US, of course, is a different story -- even now, RIM's dwindling 16% of the US market might seem like a major player to Nokia.

About a year ago, Nokia tried the same litigation tactic against Apple that it is currently pursuing against RIM (et al), and with many of the same patents. Cupertino was (eventually) willing to recognize Nokia's claim, which undoubtedly emboldened further litigation. Android was clearly next in line, but Google itself has a very limited presence in the actual manufacturing end of mobile devices.

Interestingly, Samsung seems to have escaped Nokia's attention -- for now. It's hard to believe that Apple, BlackBerry, and HTC are all using Nokia patents, but the world's top mobile device manufacturer is not. It's easier to believe that Samsung is among the "40 companies" already licensing Nokia's patents, although this (like so many non-PR-worthy deals) remains unconfirmed. What is perhaps easiest of all to believe is that Nokia knows better than to antagonize Samsung in an intellectual property power play; when it comes to potential litigation, Nokia and Samsung are the Google and Apple of the mobile patent world.  

But there's no doubt that Microsoft and Nokia have a good thing going. Nokia's latest litigation conspicuously omits HTC's Windows Phone devices, making it a rather tidy (although unconfirmed) attack on Android's dominance. Having sufficiently battered themselves on Apple's currently unassailable castle garden walls, the barbarians are now setting their sights on a more open target. Google's loose alliance of manufacturers can be picked off one by one, while Apple smugly asserts a unified front (not to mention plenty of litigious 'barbarian assistance' of its own).

Oddly, the possibility that Microsoft gave a tacit thumbs-up to the suit is undermined by the company's own patent arrangements with certain manufacturers of Android phones -- most notably, ViewSonic and HTC, although a possible source of enlightenment might come from a closer examination of the deal. Vlad Savov of Engadget may have been right on the money (pun intended) when he wrote that "it seems like Microsoft's agreement with HTC is as much of a threat to Google as Apple's lawsuit -- Redmond's basically saying you can't sell an Android device without paying a license fee, and we'd bet those fees are real close to the Windows Phone 7 license fee. Clever, clever."

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