Updated from 7:10 a.m. EST
Research in Motion (RIMM) will pay $450 million to technology developer NTP Inc. for a license that will give it the "unfettered right" to continue selling its BlackBerry message device.
The term sheet outlining the settlement covers all past, present and future uses of the technology by RIM and will allow the company to sublicense the property "to anyone." The agreement removes a major overhang to RIM's stock, which closed Tuesday at $67.09 and ran up Friday when word of settlement talks were reported.
RIM's shares surged $12.38, or 18.5%, to $79.47."The resolution permits RIM and its partners to sell its products, services and infrastructure completely free and clear of any claim by NTP, including any claims that NTP may have against wireless carriers, ISV partners or against third party products that use," RIM said in a release. The lawsuit by NTP has been a thorn in RIM's side for years. In 2003, after finding that RIM had violated NTP's patents, a federal court issued -- then stayed, pending appeal -- an injunction against RIM that would have prevented the company from selling its popular BlackBerry pagers and service in the U.S. In December, an appeals court overturned the $54 million judgment the lower court issued, but affirmed the lower court's ruling on 11 of 16 claims that RIM had infringed on NTP's patents. Tuesday's settlement "primarily to settlement of past damages," RIM said, and includes the 2003 judgment and money escrowed to date. RIM said it expects to expense the remaining $313 million in its fourth quarter ended Feb. 26. NTP and RIM said they will complete terms of the resolution in a definitive licensing and settlement agreement in upcoming weeks.