Please ensure Javascript is enabled for purposes of website accessibility

When $612 Million Isn't Enough

By Dave Mock – Updated Apr 5, 2017 at 4:41PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Wireless email patent holder NTP is now after wireless carriers.

So much for the notion of paying someone to make them go away. After Research In Motion (NASDAQ:RIMM) settled with wireless email patent holder NTP for $612.5 million in March 2006, most people would have thought that would be the last they heard of the small private company. But the lawyers are back from their vacation and going after even deeper pockets.

In a recent federal court filing, NTP now wants to take on the four main U.S. wireless carriers -- AT&T (NYSE:T); Verizon Wireless, which is a joint venture between Verizon Communications (NYSE:VZ) and Vodafone; Sprint Nextel (NYSE:S); and Deutsche Telekom's T-Mobile USA -- for allegedly violating eight of its patents. Even though RIM's BlackBerry devices are exempt from the suit, carriers typically offer other wireless email services on handsets from Nokia (NYSE:NOK) and Motorola (NYSE:MOT). NTP is now claiming that it should earn a fee from these services as well.

While the carriers have yet to comment on the lawsuit, investors should expect a long and protracted fight. The carriers will likely drag out the litigation as long as possible while attempting to invalidate NTP's patents. RIM already got most of the way there, persuading the U.S. Patent and Trademark Office (USPTO) to invalidate NTP's patents (on a preliminary basis) at the center of its lawsuit before settling. Since NTP appealed the patent invalidation, the patents were still enforceable in the courts pending a final decision from the USPTO.

The highly contested Patent Reform Act -- recently approved by the House and now making its way through the Senate -- contains provisions that seek to weed out "obvious" inventions that are not worthy of a patent. Also, several precedent-setting lawsuits may make it much more difficult for NTP to make this lawsuit stick. The Supreme Court's decision in 2006 in eBay (NASDAQ:EBAY) v. MercExchange makes it harder for patent holders to win injunctive relief -- the award that forces the infringing party to stop selling the disputed invention.

With the trend in patent reform and recent decisions placing more scrutiny on patent quality and litigation, NTP's patents may not survive long enough to see another fat check from wireless service providers.

More mobile Foolishness:

eBay is a Motley Fool Stock Advisor selection. To see what other stocks Tom and David Gardner think will beat the market, take a free 30-day trial.

Fool contributor Dave Mock wonders what the prior art for the invention of the doggy diaper looks like. He owns shares of Motorola. Dave is the author of The Qualcomm Equation. eBay is a Stock Advisor recommendation. The Fool's disclosure policy wields the power of injunctive relief, but uses it only for good, not evil.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Nokia Corporation Stock Quote
Nokia Corporation
NOK
$4.26 (-4.05%) $0.18
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
VZ
$39.52 (-1.03%) $0.41
Sprint Corporation Stock Quote
Sprint Corporation
S
AT&T Inc. Stock Quote
AT&T Inc.
T
$16.01 (-1.42%) $0.23
eBay Inc. Stock Quote
eBay Inc.
EBAY
$38.19 (-0.29%) $0.11
BlackBerry Stock Quote
BlackBerry
BB
$5.07 (-3.24%) $0.17
Motorola Solutions, Inc. Stock Quote
Motorola Solutions, Inc.
MSI
$228.76 (-1.41%) $-3.26

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.