The long-running BlackBerry saga appears to be over.
Research In Motion and NTP have agreed to settle the patent dispute over the BlackBerry device for US$612.5 million, the companies announced in a press release on Friday. Under the agreement, RIM will receive a license to NTP's patents going forward, they said.
The agreement involves a one-time payment to NTP, RIM co-CEO Jim Balsillie said during a Friday afternoon conference call. Even if the U.S. Patent and Trademark Office eventually overturns NTP's patents, NTP will not have to repay the US$612.5 million. "There is no provision for the PTO re-exam. This is a full and final settlement," he said.
"It's very important we got the scope we wanted. The scope relates to all of NTP's patents and relates to all of RIM's products," Balsillie added. "We really did this to give certainty, and calmness and comfort to our ecosystem."
RIM and NTP briefly agreed to settle the case for US$450 million in March of 2005, but that deal later fell through. RIM thought the companies had come to a final agreement, but NTP believed the matter had never been finalized, and the litigation continued.
Dennis Kavelman, RIM's chief financial officer, said RIM was feeling the effects of enterprise customers waiting for resolution in the case before expanding their current BlackBerry usage or upgrading to new hardware and software.
Balsillie expressed his frustration with Judge James Spencer's inclination to move forward with the case and not wait for the USPTO to complete its re-exam. "It was surprising and disappointing that the court wasn't going to put much weight on the final office actions."
"It's a lot of money for patents that will not survive, for sure, but that doesn't do us any good if there's a court that doesn't wait."
The agreement comes one week after the companies argued over whether Judge Spencer should impose an injunction on the sale and support of BlackBerry devices in the U.S. During that hearing, Spencer expressed his frustration that the companies hadn't settled their dispute, and promised to rule promptly on the injunction.
Patent lawyers agreed that strong words from Judge Spencer last week hinted at an injunction in RIM's future and played a major role in the speedy resolution.
The judge "did say that although he is not issuing an injunction today, RIM shouldn't take any comfort in thinking he'd never issue an injunction, so he kept that option open and was strongly encouraging the parties to settle," said George Chen, a patent attorney with the firm Bryan Cave in Phoenix, Ariz.
The judge's ready acceptance of the parties' settlement and dismissal of their case on Friday "is indicative of the fact that he was sitting on an injunction, ready to go," said Paul Andre, an intellectual property partner at Perkins Coie in Silicon Valley. In situations where an injunction appears imminent and the patent holder is willing to grant licenses, it's fairly standard for parties to settle, he said.
Trading in RIM stock was halted prior to the announcement. When the shares started trading again in the after-hours market they immediately jumped US$10.43, or 14.5 percent, to US$82.35.
Months of uncertainty regarding the BlackBerry took a financial toll on RIM, the company said in Friday's press release. RIM said after trading Friday that sales for its fourth fiscal quarter, which ends Saturday, would be in the range of US$550 million to US$560 million--lower than the US$590 million to US$620 million guidance the company had provided in December. But sales were still well above RIM's US$404.8 million total for the same quarter a year ago.
Play video
There are currently no comments for this post.