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Research in Motion has reached a $612.5-million US settlement with arch rival NTP Inc., ending years of legal wrangling over patents that threatened to shut down service to its popular BlackBerry wireless devices in the United States.

The Waterloo-based maker of the BlackBerry announced late Friday that it has signed a definitive licensing and settlement agreement, ending the long dispute.

The settlement has already been approved by the court. All litigation will now cease.

"The agreement eliminates the need for any further court proceedings or decisions relating to damages or injunctive relief," the company said in an announcement after markets closed Friday.

RIM's U.S. share price quickly shot up 18 per cent in after-hours trading after the agreement was announced. The shares traded as high as $84.50 US by 6 p.m. EST Friday.

The sudden rise in the share price reflected the market's relief that RIM had finally settled, allowing it to move beyond the legal dispute and concentrate on its business.

Competitors such as Palm have made sizeable inroads into the wireless device market in recent months – a market that RIM at one time had virtually to itself.

To underline that, RIM noted Friday that its business had been hit badly by all the uncertainty caused by the dispute. It now expects to add about 625,000 new subscribers in the current quarter, down from its original estimate of up to 750,000 net new subscribers.

RIM has a total of about 4.3 million subscribers with more than three million of those in the United States.

RIM had already set aside $450 million US to pay for a potential settlement. The company has more than adequate cash reserves to handle the extra $162.5 million US that will be needed.

The additional sum will be recorded in the company's fourth-quarter financial statements, scheduled for release on April 6.

Under the settlement, NTP, a Virginia patent-holding firm, has agreed to give RIM the licence to use the technology in perpetuity.

The licensing agreement covers all patents owned and controlled by NTP and all of RIM's products, services and technology.

NTP has agreed to give RIM "an unfettered right" to continue to sell BlackBerry devices in the U.S.

The resolution permits RIM and its partners to sell RIM products and services "completely free and clear of any claim by NTP."

RIM had offered to settle the patent dispute last year with a payment of $450 million US, but NTP backed out before signing. Some analysts had surmised that RIM would have to pay more than $1 billion US before NTP would finally agree.