RIM-NTP: It's All Over But the Writing of the Check
Attention, Blackberry users in the U.S.: four years of war are over on the Research in Motion-NTP front with a win-win settlement. RIM has agreed to pay NTP US$612.5-million for a license that covers “all the current NTP patents involved in the litigation as well as any future NTP patents.” As important, RIM has “the right to grant sublicenses under the NTP patents to anyone for products or services that interface, interact or combine with RIM's products, services or infrastructure.” Needless to say, it's a huge - albeit expensive - victory for RIM, which can now focus on battling Microsoft, Palm, Nokia, etc. rather than NTP. Of course, it's also good news for NTP's 20 or so investors, who will walk away with a cool $20-million each. The question that has to be asked if how this dispute ever got this far. Did RIM simply mis-read NTP? Did NTP show more staying power than a little patent-holding company was ever expected to have? Another thing to consider is why this battle carried on for almost a year after a $450-million settlement blew up last year? Was another year of legal turbulence really worth $162.5-million for RIM? All in all, it's a good day all around, and you can expect many bottles of champagne to be popped all around Waterloo tonight as a huge, dark cloud has finally been lifted. Is there a lesson to be learned from all of this acrimony? Will this encourage patent holders to press forward knowing there is a big pot of gold at the end of the rainbow? Will it jump-start the patent troll business where holding companies snap up patents so they can squeeze targets for payment?
Update: A good explanation why a
settlement came to fruition is RIM's preliminary fourth-quarter results, which
suggest RIM will add 620,000 to 630,000 subscribers - far below the 700,000 to
750,000 range provided in December. The reason? “Uncertainty surrounding
the NTP ligitation caused corporate and retail customers in the United States
to defer BlackBerry purchase commitments” For more comments, check out TechDirt and Jim Estill, who sits on RIM's board but, unfortunately, offers only a smidgen of comments to accompany a Reuters story. His comments does make you wonder about the role the RIM board played.
Tags: RIM, Research in Motion, NTP, Blackberry
March 3rd, 2006 at 5:53 pm
Actually - the cheque has been written.
Jim Estill - http://jimestill.blogspot.com/
RIM Board Member
March 3rd, 2006 at 11:46 pm
I'd hardly say RIM has walked away with a victory. Balsillie himself lamented the fact the company had to give in and “take one for the team,” adding that “it never feels good.” If victory means RIM bought its way out of a dilemma it had a role in creating, maybe you can call it as much, but that's not how history will remember it. All said, add me to the list of people who are happy this mess is over. I will say, however, that Balsillie must be smoking something if he thinks — as he claimed at the conference call today — that RIM carrier partners were loyal and happily supportive. That's a load.
Also, Mr. Estill, where was the board when this was all going down? Why didn't the board act in the interest of investors and encourage an earlier settlement? And what role did this board play in the settlement announced today? I think you guys — the board — got off way too easy.