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RIM Settles With NTP

Posted on Thursday 17 March 2005

In a stunning reversal of its previous stance, Research In Motion settled its patent lawsuits with NTP yesterday, agreeing to pay US$450M in exchange for a license to use and further sublicense technology covered by NTP’s patents.

The move will clear the way for the launch of products from other manufacturers who have licensed RIM’s BlackBerry system. Nokia, HTC, PalmSource and Motorola have all licensed BlackBerry for use with their own products. These companies and other licensees have not launched their devices in the US because of the NTP lawsuit. The settlement should also revive rumors of RIM as a takeover target.

The settlement amount is believed to be the largest voluntary payment in a patent suit. RIM said it will use $137M already escrowed as part of the payment, and will likely expense the rest during its fourth quarter. The company reported cash and investment reserves of $1.64B as of the end of November 2004. Investors were understandably elated by the news, driving RIM’s share price up 18% at the close of yesterday’s market.

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