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Since it was introduced, in 1999, the BlackBerry, a handheld device that provides wireless e-mail access, has become not only an enormous financial success--nearly three million Americans now use one--but also the quintessential symbol of today's connected world. Last month, though, it became clear that a patent-infringement case could force the BlackBerry's manufacturers, a Canadian company called Research in Motion, to kill the service in the United States by the end of the year. Then the BlackBerry will become the quintessential symbol of something else: a patent system that is out of control.
The trouble for R.I.M. started in 2001, when it was sued by a small Virginia company called N.T.P. for infringing on five patents that described the design and operation of a primitive wireless e-mail network. In 2003, a judge granted an injunction saying that R.I.M. needed to cut a deal with N.T.P. or shut down the BlackBerry service. R.I.M. appealed, but to no avail. The injunction is still in place, and R.I.M.'s only chance of keeping the BlackBerry alive is to pay N.T.P. an enormous ransom--informed estimates run as high as a billion dollars. What's more, there's speculation that, once R.I.M. settles, N.T.P. could go after the cellular companies--Cingular, T-Mobile, and so on--that offer the BlackBerry.
Fair enough, you might say. After all, we want to reward innovation and protect people from having their ideas stolen. Unfortunately, the real innovations in this case are not technological but legal. N.T.P. is a company without employees or products. It never tried to build a real business around its patents, and it never licensed them to others, until R.I.M. demonstrated just how lucrative wireless e-mail could be. No one alleges that R.I.M. used N.T.P.'s patents to build the BlackBerry; it invented its system from scratch. N.T.P., holding the patent on an idea and a crude design, waited until another company created a successful business based on similar ideas, and then headed to court. It is not alone in such endeavors. There are many companies, known unaffectionately as "patent trolls," that thrive by suing other companies. Close to three thousand multimillion-dollar patent lawsuits (some valid, some questionable) are now filed annually--a number that has more than doubled in the past fifteen years--and many of them rely on what a federal judge termed "a combination of blitzkrieg and Shermanesque tactics."
Over the past two decades, the U.S. has taken the view that the stronger patents are, the better. But patents, by their nature, are imperfect. They may encourage innovation, but, by allowing the patent holder complete control of an invention, they also limit it. Patents reward some inventors at the expense of others: more than one person can have an idea, but only one can patent it. That may be why, in a study of a hundred and fifty years of patent protection, Josh Lerner, of the Harvard Business School, found that countries that introduced stronger ...