March 06, 2006

RIM Settles BlackBerry Suit

By Elena Malykhina and Chris Murphy

Courtesy of

Those BlackBerry thumbs must've been working fast when this news broke late last week. Research In Motion and NTP settled the long-running patent-infringement suit that threatened to shut down the BlackBerry mobile E-mail service. RIM paid NTP $612.5 million to settle all claims and buy a perpetual license to NTP's technology.

Late last month, U.S. District Judge James Spencer declined to issue an immediate injunction that could've forced the closure of the BlackBerry service in the United States, giving RIM a victory. But Spencer chastised the two for not having settled and warned that any court-imposed decision would be "imperfect." The companies apparently got the message, ending a dispute that plagued millions of BlackBerry users with uncertainty. RIM had set aside $450 million for the case, and the additional $162.5 million will be charged against its fourth-quarter earnings. RIM has about $1.8 billion in cash and equivalents, so the payment isn't a threat to its business.

For businesses, which are the bulk of RIM's nearly 4 million customers, the suit cast uncertainty over what has become an increasingly vital tool. Phil Go, CIO of the construction firm Barton Malow, breathed a sigh of relief last week after the ruling, since he'd started testing Treo and Samsung mobile devices with Good Technology's wireless E-mail as a safety net. Now he won't have to change his employees over. Says Go, "The consequences of a shutdown would've been significantly severe."


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