The maker of the BlackBerry e-mail device said it settled its long-running patent dispute with a small Virginia-based 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 (RIM) has paid NTP Inc US$612.5 million in a "full and final settlement of all claims," the companies said on Friday.
James Balsillie, RIM'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, Virginia, for an injunction blocking the continued use of key technologies underpinning the BlackBerry wireless e-mail service.
At the hearing on Friday, Judge James Spencer expressed impatience with RIM 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 RIM will not have to pay any future royalties. There had also been talk of NTP receiving a stake in RIM.
Shares of RIM shot up US$13.78, or 19 percent, to US$85.70 during after-hours trading, when the settlement was announced. They had closed US$0.53 higher at US$71.92 in regular trading on Friday on the NASDAQ Stock Market.
"NTP is pleased that the issue has been resolved and looks forward to enhancing its businesses," Donald Stout, NTP's co-founder, said in a written statement.
Thomas Campana Jr, the other founder of Arlington, Virginia-based 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.
RIM, which is based in Waterloo, Ontario, had already put away US$450 million in escrow, the amount of a settlement last year that later fell apart. RIM will record the additional US$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 US. Uncertainty over the outcome had some customers wondering whether they would experience brief outages or even a shutdown.