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Archive for Saturday, March 4, 2006

BlackBerry patent battle resolved

Settlement includes $612.5 million payment

March 4, 2006

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— The maker of the BlackBerry e-mail device Friday said it settled its long-running patent dispute with a small Virginia-based firm, averting a possible court-ordered shutdown of the BlackBerry system and a disruption of wireless service for millions of users.

Research In Motion Ltd. has paid NTP Inc. $612.5 million in a "full and final settlement of all claims," the companies said.

James Balsillie, RIM's co-chief executive, said the company was "taking one for the team," sparing its customers and partners the uncertainty of litigation.

"We're happy to do that to support the team, but do we feel good about it? No," Balsillie said.

At a hearing last week, NTP had asked a federal court in Richmond, Va., for an injunction blocking the continued use of key technologies underpinning the BlackBerry wireless e-mail service.

At the hearing Friday, Judge James R. Spencer expressed impatience with RIM and urged a settlement.

"He basically questioned the sanity of RIM, and said it wasn't acting very rationally," said Rod Thompson, patent attorney at Farella, Braun and Martel in San Francisco. "His prodding of the parties worked."

The settlement is on the low end of expectations, Thompson said, especially because RIM will not have to pay any future royalties. There had also been talk of NTP receiving a stake in RIM.

Thomas Campana Jr., the other founder of Arlington, Va.-based NTP, in 1990 created a system to send e-mails between computers and wireless devices. Campana died in 2004. He is survived by his wife, who owns a large stake in NTP.

The settlement ends a period of anxiety for many of the more than 3 million BlackBerry users in the United States. Uncertainty about the outcome had some customers wondering whether they would experience brief outages or even a shutdown.

"I'm relieved," said Matt Lattman, a management consultant in Boston. "I've had it for about a year, and at this point, I can't imagine life without it."

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