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RIM And Motorola Finally Come To An Agreement

June 12, 2010

Research In Motion Ltd (RIM) has reached a technology licensing agreement with ongoing cellphone rival Motorola, ending more than two years of litigation.

Motorola shares rose 4 percent on Friday as investors turned their focus to the value of the company’s technology patents, for which RIM will make a one-off payment and pay ongoing royalties.

USA’s Motorola and Canada’s RIM have been battling it out over technology patents since a pact between the two expired in December 2007. They said they have now come to a cross-licensing deal on intellectual property, allowing them to exchange technology and transfer patents.

The new pact is seen as taking away the distraction and time-consuming litigations and to help both companies concentrate on competing together against other rivals such as Apple Inc, maker of the popular iPhone.

Analysts said it will be difficult to measure what the deal will mean to either company’s bottom line, as the two did not disclose financial terms.

The pact covers several different types of high-speed wireless technologies including Wi-Fi and the emerging fourth generation (4G) network standards.

Verizon Wireless has said that both Motorola and RIM could be among the first companies to sell 4G handsets in early 2011.

Although RIM has a strong following among business customers, both it and Motorola have lost out to rivals such as Apple’s iPhone in recent years.

The pact follows a complaint filed by Motorola against RIM in January at the U.S. International Trade Commission to prohibit BlackBerry sales in the United States, traditionally RIM’s most important market.

Motorola had said most RIM products infringed its patents.

Before the announcement of the deal, Motorola’s shares had fallen 7 percent since mid-April. RIM shares have fallen 20 percent since mid-April.

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