RIM's $147.2M lawsuit loss comes at 'worst time'
Delaware company wins jury verdict in patent case
Just as the dust began to settle from its tumultuous annual meeting, Research in Motion was hit with another setback Friday when a Northern California jury ordered the troubled BlackBerry maker to pay $147.2 million in a patent lawsuit.
The Waterloo, Ont.-based company was fresh out of Tuesday's meeting — which saw board members take some heat even as they hung on to their seats — when the verdict came down in the suit, which was over a remote management system for wireless devices.
Legal disputes over intellectual property are common in the tech sector. Here are some past actions RIM has faced:
- 2011: A unit of audio equipment maker Dolby Laboratories Inc. sues over digital audio technology.
- 2010: Motorola and Eastman Kodak try to have U.S. BlackBerry imports blocked.
- 2009: Prism Technologies LLC files suit over components in the BlackBerry Curve 8330.
- 2006: RIM agrees to pay $612.5 million US to settle a lawsuit brought by NTP Inc.
The decision comes at the worst time for RIM, which reported a first quarter loss and delayed the release of its much-hyped BlackBerry 10 operating system until next year, an analyst said.
While the technology giant is no stranger to patent lawsuits, which are considered par for the course in the sector, this particular case didn't garner much attention until the verdict, Carmi Levy said Saturday.
"There's never a good time to lose a $147-million judgment in court, but there certainly is a worst time and this clearly is it for RIM," he said in an interview.
"Beyond the money, there's a huge psychological impact to losing a case like this," he said.
" It's yet more salt in the wound at a time when critics are looking for excuses to pile on against RIM, and now they're found another."
Levy said fighting the verdict — a move RIM said it is considering — will divert key resources the company should be using to refocus and get back on track.
The company is sitting on roughly $2 billion in cash reserves, Levy said.
RIM considering appeal
Research in Motion said it is "disappointed" the jury sided with Delaware-based Mformation Technologies and is "evaluating all legal options."
"RIM has worked hard for many years to independently develop its leading-edge BlackBerry technology and industry-leading intellectual property portfolio, and RIM does not believe that the Mformation patent in question is valid," the company said in a statement Saturday.
Earlier in the week, shareholders at RIM's annual general meeting expressed their frustration, and some pushed for a major shakeup of the company's board of directors.
The meeting was the first opportunity since last summer for most of the company's investors to speak directly to RIM's executive team, including new chief executive Thorsten Heins.
The company's stock, which traded for more than $30 a share less than a year ago, have recently dropped below $8.