Firm grip

Toronto, March 4 (Reuters): The BlackBerry wireless e-mail service avoided a shutdown in the US when device maker Research In Motion Ltd. on Friday agreed to pay NTP Inc. $612.5 million to settle a patent dispute, sending RIM shares up 19 per cent in after-hours trade.

The increasingly acrimonious fight took a toll on the Canadian company’s bottom line, and it cut its profit forecast for the quarter. RIM said customers delayed buying BlackBerry products, the handheld units popularised by executives typing out messages with their thumbs while on the go.

But RIM said the deal would let it keep developing new products, and analysts pushed the profit warning aside to focus on the long-awaited settlement.

“RIM (is) freeing themselves of all these contingent, legal liabilities and this black cloud that has been overhanging the stock,” said John Bucher, analyst with Harris Nesbitt Corp.

The agreement between RIM and NTP ends a more than four-year US court battle over NTP claims that RIM had infringed on its patents with the BlackBerry, which has become the communications device of choice among many executives, politicians and Hollywood celebrities.

RIM said all terms of the agreement have been finalised and a US court dismissed NTP's litigation on Friday afternoon. “It is very important that we got the scope that we wanted and this scope relates to all of NTP patents and it covers all RIM’s products and services and technologies,” Jim Balsillie, co-chief executive of RIM said on a conference call.

He said the deal would clear up “noise and distraction” that had dogged the company and would restore “clarity and certainty” to RIM’s businesses.

That ‘noise and distraction’ led RIM to cut its forecast for its fourth-quarter earnings before patent litigation provisions to 64 cents to 66 cents a share. It had previously forecast 76 cents to 81 cents a share and analysts surveyed by Reuters Estimates had expected, on average, 79 cents.

RIM also cut its forecast for net subscriber additions in the quarter to 620,000 to 630,000 from its previous forecast of 700,000 to 750,000.

Balsillie later said he didn’t think the company lost any competitive positioning. “I think we didn’t go as fast as we wanted, but most of our customers said ‘you know I think it will all pop back.’ They didn’t go to alternative solutions,” he said.

“There was some drag this quarter, but fundamentally it will just rebound right back, really starting Monday,” he added.

Analysts called it “very positive for RIM” as competitors were unable to capitalise on RIM’s misfortunes because their technology “is just not in the same league.”