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BlackBerry patent dispute ends

The maker of the e-mail device pays $612.5-million to a small Virginia firm, averting a possible court-ordered shutdown of the system.

NEW YORK - The maker of the BlackBerry e-mail device said Friday it has settled its long-running patent dispute with a small Virginia firm, 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 Inc. $612.5-million in a "full and final settlement of all claims," the companies said.

James Balsillie, Research In Motion's co-chief executive, said the company was "taking one for the team," sparing its customers and partners the uncertainty of litigation.

"We're happy to do that to support the team, but do we feel good about it? No," Balsillie said.

At a hearing last week, NTP had 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 Research In Motion 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 is on the low end of expectations, Thompson said, especially since Research In Motion will not have to pay future royalties. There had also been talk of NTP receiving a stake in Research In Motion.

Shares of Research In Motion shot up $13.78, or 19 percent, to $85.70 during after-hours trading, when the settlement was announced. They had closed 53 cents higher at $71.92 in regular trading Friday on the Nasdaq Stock Market.

"NTP is pleased that the issue has been resolved and looks forward to enhancing its businesses," said Donald Stout, NTP's co-founder.

Thomas Campana Jr., the other founder of NTP, 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.

Research In Motion, which is based in Waterloo, Ontario, had put away $450-million in escrow, the amount of a settlement in 2005 that later fell apart. Research In Motion 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 whether they would experience brief outages or even a shutdown.

[Last modified March 4, 2006, 01:46:12]