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Tech Industry

RIM settles NTP patent suit

BlackBerry maker agrees to pay $450 million to NTP to settle a long-running patent suit.

Research In Motion has agreed to pay $450 million to NTP to settle a long-running patent suit against the BlackBerry maker, the companies announced Wednesday.

The agreement gives wireless device and service company RIM and its customers the "unfettered right to continue its BlackBerry-related wireless business without further interference from NTP or its patents," according to a statement.

Investors applauded the settlement, bidding up shares of RIM nearly 20 percent, or $12.98, to $80.07 at midday trading on the Nasdaq.

NTP, a closely held patent holding company based in the United States, successfully sued RIM in 2002 for patent infringement. In December, a U.S. appeals court upheld the patent infringement finding against RIM, but said part of the earlier ruling was flawed and sent the case back to a lower court. The companies held settlement talks before a judge last week.

"Both sides feel they could have done better, but the nature of a settlement is that no one is 100 percent happy," said Kevin Anderson, an attorney with Wiley Rein & Fielding, which is representing NTP. "But everyone is satisfied."

RIM said the settlement included $137 million already held in escrow, while the remaining $313 million would be expensed in the fourth quarter, which ended Feb. 26. RIM representatives would not comment further. The company will offer more details during its fourth-quarter financial results call on April 5.

Financial analysts were positive on the settlement, mainly because it avoided royalties and should spur RIM's licensing agreement. Bear Stearns analyst Andy Neff said RIM's next challenge may come from software giant Microsoft, which is working on a service similar to RIM's always-on messaging service.

Microsoft representatives were not immediately available for comment.

The resolution includes past and future RIM products, services and technologies, and also covers any partner deals RIM may strike with network carriers, distributors, suppliers and software developers. RIM also is granted rights to sublicense NTP patents. The resolution covers the life of NTP's patents--which expire in 2012--associated with the patent infringement case against RIM.

NTP's agreement with RIM is nonexclusive, and attorney Anderson pointed out that NTP retains ownership of it patents. He said it is reasonable to expect additional licensees to NTP's patents in coming weeks.

Recently, NTP signed RIM rival Good Technology to a licensing agreement. Nokia, a RIM licensee, is another company licensing NTP's patents.

Under the terms of the settlement, companies that license wireless communications technology from RIM are covered under RIM's license. However, companies developing their own wireless service will still need a license from NTP.

Reuters contributed to this report.