NEW YORK – The maker of the BlackBerry e-mail device said Friday it had settled its long-running patent dispute with the small Virginia-based firm NTP, 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 $612.5 million in a “full and final settlement of all claims,” the companies said.
Shares of RIM surged $13.78, or 19 percent, to $85.70 in after-hours trading Friday after the settlement was announced. They closed 53 cents higher at $71.92 in regular trading Friday on the Nasdaq Stock Market.
At a hearing last week, NTP 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 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 was on the low end of expectations, Thompson said, especially since RIM will not have to pay any future royalties. There had also been talk of NTP receiving a stake in RIM.
NTP was co-founded by the Thomas Campana Jr., an engineer who 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.
RIM, which is based in Waterloo, Ontario, had already put away $450 million in escrow, the amount of a settlement in 2005 that later fell apart. RIM will record the additional $162.5 million in its fourth-quarter results, it said.
The settlement ends a period of anxiety for many of the more than 3 million BlackBerry users in the United States. Uncertainty over the outcome had some customers wondering about outages or 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.”
RIM said Friday that it added 620,000 to 630,000 new subscribers in the fiscal fourth quarter, which ended in February, below the 700,000 to 750,000 it had estimated in December. It blamed the shortfall on high uncertainty among customers about the litigation.
RIM assured users it had developed new software to work around NTP’s patents. But because few details were released, analysts expressed concerns about the viability of the technology and the legal ramifications of adopting it.
With a settlement, RIM can avoid the headaches associated with introducing the new technology. Even if the software worked, it might have been challenged by NTP, introducing yet another twist to the complicated and long-running case.
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