Research In Motion the makers of the Blackberry phone have agreed to pay Motorola an undisclosed fee after being accused of infringing on several Motorola wireless patents. In the past RIM has been accused of stealing email technology and recently forked out $267.5 million to end a patent dispute with mobile-phone software maker Visto.
RIM said at the weekend that they will make an upfront payment to Motorola and pay royalties for future use of the technology. The two Companies have been suing each other since 2003. RIM will also pay Motorola’s legal costs which include litigation cases in the U.K., a dispute over imports before the U.S. International Trade Commission and half-dozen lawsuits in federal courts in the USA.
The Wall Street Journal said that disputes among makers of smartphones, which can surf the Web and play video, have increased as sales of the devices outpace the rest of the handset market. Apple’s iPhone and RIM’s BlackBerry overtook Motorola in global unit sales last quarter, according to researcher ISuppli. Motorola makes the Droid, which runs on Google Inc.’s Android software.
“It behooves them to come to terms and settle,” said Ashok Kumar, an analyst with Rodman & Renshaw Inc. in New York, who has a “market perform” rating on RIM. “The reality of the market is that eventually they will be stepping on each other’s toes.”
RIM, which had $15 billion in sales last year, said in a regulatory filing that the settlement isn’t expected to affect its fiscal first-quarter results “or to have a material impact on operating results going forward.”
Investors won’t “particularly care if there is a charge unless it’s sizable” because there is an assumption that RIM would have had to pay some royalty fees to Motorola as part of an agreement, said Nick Agostino, an analyst at Mackie Research Capital in Toronto. He has a “buy” rating on RIM. A charge of $500 million would “raise eyebrows,” he said.
RIM last year agreed to pay $267.5 million to end a patent dispute with mobile-phone software maker Visto and in 2006 paid $612.5 million to settle a suit filed by patent owner NTP Inc. over e-mail technology.