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BlackBerry Patent Dispute Is Settled

With sufficient incentives for both sides to resume negotiations, RIM and NTP officials earlier this week still characterized themselves as being far apart. The companies reached a tentative settlement last spring for $450 million, but that agreement fell apart and the companies continued to spar in public and in court.

That prompted much anxiety among some users and information technology managers at companies that rely on BlackBerry communications.

After the judge's admonishment last week, NTP and RIM spent much of Monday fighting over negotiating terms. RIM wanted to make sure that any settlement would protect wireless carriers and other relevant parties from further litigation. NTP wanted to secure the right to license its patents to other parties, and to get a nonrefundable payment from RIM.

On Wednesday, RIM's attorneys and Stout and his attorneys flew to New York to meet at the offices of Citigroup Global Markets, NTP's banker.

On the NTP side, Stout was joined by his attorney, Jim Wallace, and bankers Joseph Mooney and Jerry Cincotta of Citigroup.

RIM co-chief executive Jim Balsillie, who last week said he didn't think it was necessary to "pay for patents that are invalid," stayed in contact with company lawyers Ronald Star and Marty Glick by phone during the negotiations, which continued past midnight on Thursday.

The deal was signed late yesterday at the legal offices of Skadden, Arps, Slate, Meagher & Flom LLP, RIM's securities attorneys.

Patent lawyers said yesterday that they weren't surprised to hear that RIM had settled. "The writing was on the wall," said John M. DiMatteo, an intellectual-property lawyer in New York. "It wasn't a question of 'if.' It was just a question of how much."

Intellectual property attorney Donald R. Steinberg said the size of the settlement might spur more lawsuits from patent-holding companies, but that in most cases, a settlement is often desirable because it limits risk on all sides.

"There was some risk to NTP that the patents would ultimately be invalidated and then they wouldn't get anything," he said. "And there was risk to RIM that the patents . . . would be upheld and they would be enjoined, and in essence they would have to pay more money to get out of the injunction."

Knowing that, many users expected the two sides to settle.

"I never thought BlackBerry would ever shut down," said Patrick Heffernan, 36, a Treasury Department director who said he starts and ends each day by checking his BlackBerry. He wasn't surprised by the settlement, because in Washington, he said, BlackBerrys are ubiquitous and he was confident that the companies would make a deal. "I figured that everyone has a price."

Officials of companies that rely heavily on the devices were relieved when they heard of the settlement.

"This is such great news," said Israel Carunungan, a director at publisher Hanley Wood Magazines, where more than 100 employees use BlackBerrys. "I've been following the case closely because the BlackBerry is so essential for business."

Staff writers Cecilia Kang and Arshad Mohammed contributed to this report.


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