RIM Settlement Hits Impasse
Research In Motion (RIMM) said its $450 million patent settlement with technology shop NTP Inc. is in danger of falling apart.
According to RIM, the companies have been unable to finalize definitive documents in their agreement to end NTP's litigation over the technology underlying the BlackBerry messenger. RIM will ask a federal court to enforce the agreement, which was outlined in a term sheet reached in March.
"Since signing and jointly announcing the binding term sheet with NTP, RIM has been negotiating in good faith to complete that process," the company said. "However, NTP refuses to honor its obligations under the term sheet and finalize the definitive documents. As a result, an impasse has been reached with respect to the settlement."
RIM shares have rallied more than 25% since the agreement was struck as investors welcomed an end to the potentially disruptive litigation. In return for the $450 million, RIM was to receive an unfettered right to continue selling the message device and to license it "to anyone."The stock was down in premarket trading, recently losing $3.44, or 4.4%, to $74. In a release Thursday, RIM outlined several possible legal outcomes, the most draconian of which could be the reinstatement of a previously stayed injunction barring it from selling and operating BlackBerry service in the U.S. RIM is asking the Appeals Court to stay a previously filed appeal and send the case back to a federal district court in Virginia, where it hopes to get the term sheet enforced. "While RIM maintains that an injunction is inappropriate, given the facts of the case and recent doubts raised as to the validity of the patents in question, it will ultimately be up to the court to decide these matters and there can be no assurance of a favorable outcome of any litigation," the company said.
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