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It's a slugfest. Typo, an L.A. based start-up, debuted a $99 bluetooth keyboard case for the iPhone 5 and 5S at the Consumer Electronics Show last week.  The product bears a striking resemblance to BlackBerry’s iconic keyboard and has been generally well received by devotees of QWERTY keyboards.  Typo claims to have sold out its first batch through preorders.

BlackBerry filed suit in the Northern District of California on January 3rd, even before the CES began.   It alleges infringements of three separate patents and an attempt to create commercial confusion based on the similarity of Typo’s product to the distinctive keyboard of BlackBerry’s Bold and Q10 models, (a legal claim known as “trade dress infringement”).  In addition, BlackBerry cites violations of California’s unfair business law.  All these claims focus on the sculpted shape of the keys and “guitar frets” between the rows of keys, features that make thumb-typing easier.  It’s a scorched-earth defense that asks for everything but the first-born child, including:

  • injunctions preventing further patent infringement,
  • treble damages,
  • punitive damages,
  • costs,
  • attorneys’ fees,
  • an accounting,
  • restitution, including disgorgement of Typo’s wrongfully-obtained profits and
  • destruction of the offending products.

The situation may be complicated by the fact that Typo was paid when the products were preordered.  They've already collected their money.  In addition, fulfillment of the orders will require the products to be imported from China where they were manufactured.  Time for some import/export law.

Typo vows to vigorously defend its product.  After all, a black keyboard is a black keyboard.

What They’re Saying

Commentators have settled on three themes:

  • Typo’s keyboard is nearly indistinguishable from BlackBerry’s and virtually guaranteed to create market confusion.  Fairness suggests that BlackBerry has a valid point.
  • The device is a great, and we all want one.
  • Finally, BlackBerry, described as an “ailing smartphone maker losing relevance” seems back on its heels since its aborted attempt to go private last year.  The aging lion doesn’t look good.

Unless you’re just into lawsuits as blood sport, the really interesting issue is what small businesses and innovators can to take away from this spectacle.

Three Business Lessons

  • Legal remedies to market problems are too slow.  Typo made its money before BlackBerry got to court.  Typo may have anticipated litigation and treated it as just another cost of doing business.  It's going to be difficult for BlackBerry to claw back the ill-gotten gains.  On the other hand, consider how weakened BlackBerry’s claim would have been without patent protection.  An ounce of planning is worth a pound of cure, even if it doesn’t prevent all the harm that comes with a law suit.  This works for both parties, here.
  • Business solutions work better than legal remedies. Perhaps BlackBerry should simply buy Typo.  Alternatively Typo, although it may lose this round in court, might simply re-frame its niche as something broader, like detachable keyboards for electronic devices.
  • Perception is everything when dealing with consumers.  How does BlackBerry win if it manages to prevent consumers from getting a good product they want and have already paid for?  Is there going to be a bonfire to destroy the Typo keyboards?  Should Typo sell tickets?  BlackBerry certainly has to defend its intellectual property because every innovator must.  That alone won’t help it regain market share, though.  The real remedy for the real problem lies in product development and promotion.

The problem with law is that it looks backward.  Business looks forward.  This may be an industry in which a nimble and edgy offense is better than an aggressive defense.

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