RIM to Settle with NTP for $612.5 Million

Research In Motion announced late Friday that it had reached a settlement with patent firm NTP to end a never-ending legal battle that threatened to shut down BlackBerry service in the United States. RIM will pay NTP $612.5 million in a "full and final settlement of all claims."

RIM's stock surged 14 percent in after-hours trading following the announcement. At the same time, the company warned that fourth-quarter earnings would fall short of expectations due to disappointing new subscriber numbers. RIM said the litigation had affected new signups.

In a conference call with reporters, RIM CEO Jim Balsillie said the settlement did not leave him with "a good feeling," but argued the company had few options.

"It's a lot of money for patents that will not survive for sure," Balsillie said. "We are caught in an ambiguous time in the patent laws and the courts. No one feels good about this, but we are happy to put it behind us."

In deciding not to enforce an injunction that would halt BlackBerry service last Friday, U.S. District Judge James Spencer chastised the two sides for not making more effort to settle the matter out of court. Spencer said he hoped to have a decision on the injunction "as soon as reasonably possible."

However, the judge reminded RIM that it had already been found guilty of patent infringement. Spencer said, "the simple truth, the reality of the jury verdict has not changed." RIM was found guilty in July 2002 of infringing on NTP's wireless patents.

The comment from Spencer led to public statements being issued this week by both companies saying they were willing to sit down at the bargaining table once again.