The word "blackout" may bring to mind the August night nearly three years ago when roughly 50 million people in New York and several surrounding states suddenly found themselves without any power at all.But a new kind of blackout could affect CPA firms and thousands of other businesses across the nation - the BlackBerry blackout.
CPAs and other BlackBerry customers are nervous as a protracted patent dispute between Research in Motion Ltd. - the Waterloo, Ont.-based parent company of BlackBerry portable e-mail devices - and NTP Inc., an intellectual property owner company in Arlington, Va., drags on.
NTP filed suit against RIM in 2001 for patent infringement related to how the BlackBerry devices send and receive e-mails using radio frequency wireless communications.
In 2002, NTP won an injunction banning sales of the device in the U.S., but that injunction was stayed pending the outcome of an appeal by RIM. At press time a final hearing was scheduled for February 24.
If RIM loses, it could signal the end of the BlackBerry e-mail service in its current form in the U.S., affecting roughly 3.6 million users and their businesses.
"They're not losing face yet. We're still purchasing BlackBerries every week," said Matt Camden, chief information officer for Chicago-based tax and business advisory consulting group UHY Advisors. "We have new hires and those that want to upgrade their BlackBerry devices. We're not ignoring what is happening, but at the same time, we've got work to do. Since the first time we became concerned, we've still purchased about 50 BlackBerries."
However, CPAs and other personal digital assistant customers are starting to question the stability of RIM and the BlackBerry product after years of legal wrangles with NTP and others, as well as advancements in PDA operating systems.
Some CPAs are turning to more advanced operating systems, such as the Microsoft Windows Mobile operating system found on PDA models like the Palm Treo, and Verizon's Bluetooth-enabled devices like the XV6600 and XV6700.
"This lawsuit has certainly made IT managers take another look at their solutions vendors and question their strategies to make sure they're the right partner, with strategies in place to ensure continuity for their businesses," said Jimmy Johnson, senior manager of public relations at Palm. "Our open platform approach allows us to cater to almost any situation."
Jim Bourke, CPA, CITP and director of MIS at the New Jersey-based firm of WithumSmith+Brown, has been using Palm Treo devices for several years. Today, he uses the Treo 700w with Verizon Wireless cellular service.
"The whole firm is on Treos," Bourke said. "We wanted an open platform, so if we were not happy with Verizon's service we could jump to Sprint or another service. There's not a gambit of options out there for BlackBerry devices," said Bourke. "I'm not saying Treo has better technology, but it meets my needs and I'm happy."
Blackberry devices do offer a number of cell phone provider options, but the providers depend on the model.
The design of the operating system on a BlackBerry remains simple, but it prevents the adding on of outside software, whereas the Windows Mobile operating system on devices like the Treo and Verizon's PDAs allows users to add on software, create and edit documents or spreadsheets, and synch directly to their Outlook account.
"I've added e-books, games and my time and billing system, and installed custom applications. There are a number of development tools that use the Windows Mobile platform," said David Cieslak, CPA, CITP and principal of the Encino, Calif.-based Information Technology Group, who uses the Palm Treo 650 smartphone.
"Blackberry is attractive to those who use it simply because it's a fixed platform," he said, "but it has limitations too. For more techie, geeky people, I don't see many BlackBerries being used. But if you don't need anything above and beyond what the BlackBerry offers, that is the ideal platform."
Hold the phone, and your breath
For those CPAs using a BlackBerry today, a switch to a Windows Mobile device would not be an easy one, said WS+B's Bourke. And many firms, like UHY Advisors, are waiting to hear the final results of the litigation before deciding to make such an expensive change.
A switch may not be necessary, even if an injunction is served to RIM, as the company said that it has a workaround system in place.
"RIM's software workaround designs are ready and will be implemented if necessary. There is, however, no injunction order currently in place and it is far from clear whether existing customers would even be subject to any potential injunction. In the event of an injunction barring the sale of RIM's current product designs, RIM would pre-load the new software workaround on devices prior to shipping to customers," said Mark Guibert, vice president of corporate marketing at RIM.
Though a Blackberry customer for many years, UHY's Camden has not heard enough about the workaround system to satisfy his or his firm's questions or put their minds at ease. "I received no details as far as how to manage the workaround. It's supposed to be some sort of magic trick - the technology is going to be turned off but still work."
RIM was founded in 1984 by two high school colleagues from Waterloo - Mike Lazaridis and Douglas Fregin. Five years later, the two turned a few Hewlett-Packard palmtop computers into wireless e-mail devices for a Canadian company. Since then the two worked on, and created, what we know as the BlackBerry today - a low-power, battery-operated e-mail device that sends and receives e-mails using a radio frequency receiver and electronic processor.
Meanwhile, Thomas Campana Jr. was the principal founder and owner of NTP Inc. before his death in June 2004. Campana developed a system to deliver e-mails through multi-frequency pagers in the 1980s. This became known as the push delivery of e-mails, where a device can receive but not transmit e-mails. In 1991, he applied for three patents, with five more patents deriving from the original three, totalling eight patents. Today, only five of the eight are still valid in the lawsuit.
Since the case was first filed, a number of injunctions, appeals and agreements have taken place, with all being struck down. The latest such unsuccessful attempt to end the dispute was an appeal by RIM in January to the U.S. Supreme Court to review the lawsuit.
The U.S. Patents and Trademark Office is also involved, and found one of the five patents involved in the case invalid. At press time, it was possible that RIM could emerge victorious if the Patent Office finds enough NTP patents invalid.
"It's hard to imagine, no matter what happens, that they would rule to cease and desist the use of BlackBerries. Let's face it - most people use BlackBerries," said Mike Dickson, CPA, CITP and president of Business Technology Group LLC, in Columbus, Ohio.
Said Camden, "If RIM waits long enough to have the judge turn the service off ... there are firms that have thousands of BlackBerries. They would be so pissed at RIM that they would throw them out and never do business with them again."
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