Money Matters - Simplified

RIM fined $147.2 million over patent violation lawsuit

The jury found RIM guilty and awarded the firm $147.2 million in damages over patents owned by Mformation Technologies.

In a patent dispute, Research In Motion (RIM) is said to have infringed upon Mformation Technologies said a San Francisco court on Friday.

The jury found the troubled Blackberry maker guilty and awarded the firm $147.2 million in damages over patents owned by Mformation Technologies.

It was determined that RIM's BlackBerry Enterprise Server (BES) violates a patent held by Mformation related to remote management system for wireless devices.

The jury has directed RIM to pay an $8 royalty for each of the 18.4 million units sold. The payout only covers devices available at the time of filing, not future royalties or international sales.

Mformation founder and CTO Rakesh Kushwaha said in a statement, "Mformation created the mobile device management category in the late 1990s and was innovating in this area well before most of the market understood the fundamental importance of wireless mobility management."

"Our patents are a core part of our innovative products, and are fundamental to the methods used for device management in the market today."

The jury has directed RIM to pay an $8 royalty for each of the 18.4 million units sold. The payout only covers devices available at the time of filing, not future royalties or international sales.

Lawsuit filed in 2008
Mformation Technologies sued RIM in 2008, accusing the smartphone maker of violating two patents after being briefed about technology details during licensing discussions.

After declining to license the technology, RIM modified its software to include the patented systems.

RIM is disappointed by the outcome and is weighing strategic legal options. As the trial judge has yet to decide on certain legal issues that may overturn the verdict, RIM will await the motion before deciding whether to pursue an appeal.

The company said in a statement Saturday, "While the verdict is in favor of MFormation on some claims of the single patent remaining in suit, five of eight claims were found to be invalid."

"Research In Motion has worked hard to develop its leading-edge BlackBerry technology and has built an industry-leading intellectual property portfolio of its own. The company's policy is not to comment on pending litigation, and therefore we will await the court's final legal rulings to comment further."

RIM losing market pulse
Dogged by product delays and disappointing earnings, RIM is fast losing its grip on the smartphone market. The company’s stock has fallen more than 70 percent in the past year.

RIM is facing stiff competition from Samsung’s Galaxy series and Apple’s iPhone line that have been best sellers last year.

The Canadian company recently reported a first-quarter loss of US$518 million.

In an effort to cut costs, the Blackberry maker is reviewing a number of strategic options like laying off 5000 workers, entering partnerships and joint ventures including putting itself up for sale.