The Blackberry Settlement & Competition Ahead

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Research In Motion (RIM) averted a court-ordered shutdown of its US Blackberry service with a $612.5 million (£350 million) settlement with NTP on Friday. The more than four-year old lawsuit stems from RIM's infringed use of NTP's patents concerning the sending of e-mails between computers and wireless devices. The companies reported it was a “full and final settlement of all claims,” according to the Associated Press.

RIM said in a prepared statement released after the markets closed on Friday, “The agreement eliminates the need for any further court proceedings or decisions relating to the damages or injunctive relief,” according to CBC News.

The settlement was considered low, as industry analysts expected RIM to be forced to settle for as much as $1 billion. RIM will not have to pay any future royalties to NTP. A judge ruled the previous $450 million settlement between NTP and RIM invalid in November 2005, as NTP failed to accept the settlement, according to Wired News.

CBC News reports that NTP has agreed to give RIM “an unfettered right” to continue selling their Blackberry wireless devices in the US. RIM and its partners are allowed to sell RIM products and services “completely free and clear of any claim by NTP,” according to the settlement.

At the time, RIM was seeking to delay the case while awaiting word from the US Patent and Trademark Office that had preliminarily rejected the patents at the center of the lawsuit. The Associated Press reports that they were about to finally reject all patents in the case.

U.S. District Court Judge James R. Spencer wrote in his opinion at the time concerning RIM's irrational execution of the lawsuit, “Drawn out discovery disputes, claim construction issues, multiple motions for summary judgment, countless pretrial motions and many evidentiary objections set the tone for a complex, contentious path toward a resolution of this case,” according to Wired News.

The Associated Press reported shares of RIM rose $.53 higher in regular trading on Friday and $12.08, to $84, in after-hours trading. Shares of Palm fell $1.47 in after-hours trading on news of RIM's settlement, according to Reuters.

Blackberry devices are also known as “Crackberries”, with their user's level of addiction to these wireless devices. Microsoft is currently entering the market with its Exchange Server e-mail software and devices using Windows Mobile 5. Used together, these technologies will allow mobile e-mail without the need for a service provider, such as RIM. Also, commitment to a mobile operator's mobile e-mail contract will be unnecessary using these technologies, according to The Independent.

An “all Microsoft” solution is available using these technologies also. The Independent reports that Nokia has announced a Blackberry-like device and a mobile e-mail server called Nokia Business Centre, aimed at small to mid-sized businesses. Nokia also completed its acquisition of US company Intellisync last month. The company provides a service similar to RIM except for Microsoft, Palm, and other smartphones.

Other US companies offering services directly to businesses or as “white label” services used by mobile operators include US companies such as Good Technologies, Seven Networks, and Visto. The Independent reports that with numerous competitors, businesses and individuals have never had a larger range of hardware and software alternatives to Blackberry devices and services than now.

RIM is a Canadian company based in Waterloo, Ontario, with more than 4.3 million users in the US, according to CBC News. The Associated Press reported RIM had developed new software to work around NTP's patents. They will be able to introduce their software innovations without legal barriers, now that their settlement with NTP has been accepted. NTP is a small patent-holding firm based in Arlington, Virginia.

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