RIM and Motorola have avoided extending a costly and lengthy court battle by settling a patent infringement case.
The Waterloo, Ont., BlackBerry maker has agreed to make an upfront payment as well as continuing royalties to Motorola as part of a licensing agreement, the two companies said Friday. Neither firm disclosed details of the financial settlement.
The deal entails "a long-term, intellectual property cross-licensing arrangement involving the parties receiving cross-licenses of various patent rights," RIM said in a regulatory filing with the Securities and Exchange Commission. The licences relate to a number of technologies vital to the design of smart phones, including 3G cellular technology, Wi-Fi networks and wireless e-mail.
Motorola had brought a case against RIM before the International Trade Commission in the U.S. earlier this year. The company alleged RIM infringed on technology patents related to wireless networks. The two firms also fought before courts and regulatory bodies in the U.S. and the United Kingdom.
In effect, the cross-licensing agreement indicates both companies consider the technology at stake vital to the design and manufacturing of their devices.
In Friday's regulatory filing, RIM said it does not expect the settlement to impact its operating results for the first fiscal quarter of 2011, or beyond.
Both RIM and Motorola have staked their future success on the smart phone market, with varying degrees of success. The BlackBerry maker currently boasts several of the best-selling smart phones in North America. However much of RIM's success has been mostly due to corporate and government clients, rather than the growing ranks of consumer smart phone users. Motorola has focused on developing phones powered by Google's Android operating system, but has lost market share to RIM in the past few years. Both companies are in stiff competition with Apple for dominance in the lucrative consumer smart phone sector.
Investors appeared pleased with the settlement, which reduces the level of uncertainty around the companies' business strategies. RIM shares rose 37 cents to $61.39 Friday. Motorola shares rose 27 cents (U.S.) to $7.11 (U.S.).
Such patent disputes have become fairly common in the technology industry. In 2008, Canadian firm Wi-LAN Inc. filed a patent-infringement lawsuit in the U.S. against both Motorola and RIM. In January, Eastman Kodak Co. sued Apple and RIM, alleging technology in the companies' smart phones infringed on its patents.