Blackberry maker RIM settles for US$612.5m

Stan Beer
Saturday, 04 March 2006 10:48

Your IT - Mobility

Who else but one of the new age internet and wireless companies like RIM could take a US$612.5 million legal hit and then see its share price skyrocket upwards by 19%?

RIM (Research In Motion Ltd), the maker of the phenomenally successful BlackBerry smartphone device, has settled a long-running patent dispute for a one-time cash settlement of US$612.5 million with small Virginia-based firm NTP Inc, whose co-founder invented the wireless email system upon which the BlackBerry system is based. The dispute threatened to escalate into a court-ordered injunction which would result in a shutdown of the entire Blackberry wireless system which has millions of users worldwide.

RIM has issued a statement which reads: "RIM has paid NTP $612.5 million in full and final settlement of all claims against RIM, as well as for a perpetual, fully-paid up license going forward. This amount includes money already escrowed by RIM to date.

"The licensing and settlement agreement relates to all patents owned and controlled by NTP and covers all of RIM's products, services and technologies. NTP grants RIM an unfettered right to continue its business, including its BlackBerry related business. The resolution permits RIM and its partners to sell RIM products and services completely free and clear of any claim by NTP, including any claims that NTP may have against wireless carriers, channel partners, suppliers or customers in relation to RIM products or services, (including BlackBerry Connect and Built-In technology), or in relation to third party products and services, to the extent they are used in connection with RIM products and services."

RIM already had US$450 million put aside in escrow for the settlement and will allocate a further US$162.5 million from its Q4 earnings.

Upon news of settlement hitting the wires, shares in RIM skyrocketed upwards by nearly US$14 to US$85.70 on the NASDAQ in after hours trading.

One person who won't be celebrating, however, is NTP co-founder Thomas Campana Jr, who developed the wireless email system that lay at the heart of the dispute. Campana died in 2004.