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Trademark was used by firm for six decades; meanwhile RIM employees start drunken airplane brawl, riot

It's déjà vu all over again.  Embattled Canadian smartphone maker Research in Motion, Ltd. (TSE:RIM) is back in court facing claims that it illegally used another trademark, just weeks after it was forced to rename its next generation operating system after supposedly failing to check whether the name it picked was trademarked.

I. RIM Allegedly Look to Trample on Small Firm's Trademark Rights

Jim MacLeod, president and chief executive officer of a broadcasting representation group in Canada named BBM Canada recalls the moment of his disturbing discovery.  He was travelling on business in New York City in 2010, when he flung open the curtains of his hotel room and observed a glaring billboard advertising RIM's new BBM -- BlackBerry Messenger service.

Impossible, he thought.  After all, BBM had been around for six decades and was a well known name among the Canadian communications market.  Was it really possible RIM had just scooped up his firm's name without authorization?

Rim BBM ad
BBM Canada's CEO reportedly learned about RIM's infringement after observing one of its billboards advertising the service.  Allegedly RIM refused to negotiate with BBM, who had used the trademark name for six decades. [Image Source: Flickr]

Well it turns out that RIM appears to have known about the conflict.  In 2010 when it applied for the trademark, the Canadian Intellectual Property Office sent it a complaint letter warning that the name "was not registerable."

But RIM defied logic and decided to use the trademarked acryonym anyways.

It began to market its service under the BlackBerry Messenger name, using the BBM for a shorthand.  Today that service is a key selling point for many of RIM's 50 million customers, as its unified messaging allows customers to drop pricey text-messaging plan add-ons and message with the protection of secure encryption.

BBM -- the company -- had a rich history.  It was founded in 1944 as the Bureau of Broadcast Management to help network and advocate for television broadcasters and advertisers.  It later changed its name BBM Bureau of Measurement and then BBM Canada.  Today it holds and actively operates out of the domain name bbm.ca, uses "BBM" in its logo, and operates employee email from a bbm.ca address.

If Mr. McLeod's claims are to be believed, RIM not only was grossly negligent in failing to clarify the ownership of the term BBM; it was outright arrogant, hoping to trample the smaller firms intellectual property rights.  Mr. McLeod recalls that he reached out to RIM, offering to rebrand his company if RIM was willing to cover the costs -- a pretty incredible gesture given the firm's six decades of using the name.  RIM refused.  And Mr. McLeod says he reached out to BlackBerry requesting a meeting with an executive.  Again, RIM allegedly met his request with a cold rejection.

II. BBM to RIM: "No more Mr. Nice Guy"

Now those moves may come back to haunt RIM.

No longer looking to make peace, the scorned BBM Canada filed a lawsuit against RIM back in Aug. 2010.  It is seeking an injunction to prevent RIM and its employees from using the trademark, and is also seeking monetary compensation for the abusive -- infringement and punitive damages.

Mr. McLeod says its imperative for the court to make an example of RIM and show that big companies can't just trample the rights of smaller businesses and steal their trademarks.  He states, "We don’t want to pile on the troubles of RIM – this predates RIM’s troubles – but from our point of view, this is a very serious situation.  If the big guy who can throw the most money at it can take your trademark, why do you even have trademark law?"

Again -- as with most of RIM's recent troubles -- the source of trademark mess allegedly comes from incompetent management of RIM's upper executive echelon.  Canada's The Globe and Mail reports sources as saying that RIM's legal department gave warnings to the managers about the naming conflicts, but that high level parties chose to ignore that warning. 

RIM co-CEO Jim Balsillie
RIM's legal staff tried to warn it about the recent trademark conflicts, reportedly, but the executives refused to listen (co-CEO Jim Balsillie pictured). [Image Source: Reuters]

It's hard to measure exactly how much business may be lost if RIM is forced into another costly renaming, but it's clearly the last thing a company who has seen sliding profits, subscriber numbers, and cash reserves needs.  If nothing else, a renaming would be ablow to consumer confidence in the brand, creating confusion and frustration.

And the most troubling thing is that if Mr. McLeod is being honest in his commentary, this was all utterly avoidable.  There's two sides to every story, but it's hard to escape the fact that it sounds like RIM's upper management was grossly arrogant and negligent here.

It's incidents like these that reminds one of the recent "Open Letter" published by a departing "high ranking employee", who wrote complaining of the company's poor management, commenting, "I have lost confidence. While I hide it at work, my passion has been sapped. I know I am not alone..."

III. RIM Employees Start Drunken Airline Brawl; RIM Employees in Indonesia Arrested for Provoking a Riot

Piling on the bad news for RIM, two employees recently created a public controversy when they engaged in physical combat with airline employees, forcing a flight to be diverted.  The inebriated business travellers -- George Campbell, 45, of Conestogo, Ont., and Paul Alexander Wilson, 38, of Kitchener, Ont. -- were handcuffed to their seats and the flight to Beijing was diverted to Vancouver, so the men could be arrested.

Blame it on the alcohol
RIM employees channel Jamie Foxx: "Blame it on the goose, gotcha feeling loose; Blame it on the 'tron, catch me in a zone; Blame it on the a-a-alcohol." [Image Source: Globe and Mail]

The pair plead guilt to mischief, and were sentenced to $72,000 USD each in restitution and a year of probation.  

An embarassed RIM stated, "RIM expects that its employees conduct themselves in a manner reflective of our strong principles and standards of business behavior.  RIM does not condone behavior that conflicts with applicable laws and employees are expected to act, at all times, with integrity and respect. The individuals involved in this incident are no longer employed by RIM."

Several RIM employees are also facing charges in Jakarta, Indonesia, including Canadian Andrew Cobham.  They decided to offer a 50 percent off discount to the first 1,000 purchasers of the BlackBerry Bold 9790 at its Nov. 25 debut.  The result was a stampeding riot, which left dozens injured, with several people fainting.

The Canadians could spend up to nine months in Indonesian prison for committing "negligence leading to injury".  RIM appologizes for the mayhem and injury it created commenting, "RIM is actively co-operating with the authorities who are investigating this incident.  We are also undertaking our own investigation to prevent any recurrence of this sort of situation."

In other recent news market research reports indicate that RIM's U.S. market share has plunged from 50 percent in 2006 to 8 percent at last count.  Meanwhile RIM announced it was delaying its next generation BB 10 product (formerly known as BBX) half a year.

Sources: The Globe and Mail [1], [2]



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This article is over a month old, voting and posting comments is disabled

RE: LOL
By retrospooty on 12/24/2011 7:13:27 AM , Rating: 3
I dunno... Maybe Pirks is right, Jason only reports the negative news on RIM and ignore the poritive... RIM's stock went up 12% the other day, climbing back up to 1/11th of its previous value...... Oh , wait. It was on takover talks from Microsoft, Nokia and Amazon.com LOL

http://www.fool.com/investing/general/2011/12/21/r...


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