RIM could face billion-dollar patent liability with BlackBerry

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Research In Motion Ltd. may have to pay $550-million (U.S.) more than it has set aside to settle claims that its BlackBerry e-mail device infringes another company’s patents. Liability for infringement could reach $1-billion, said ThinkEquity analyst Pablo Perez-Fernandez. RIM has reserved only $450-million to cover damages for infringement and licensing fees until the patents run out in 2012. The $1-billion estimate followed the refusal on Oct. 7 by a U.S. appeals court to overturn an August jury finding of infringement of the patents, which are owned by NTP Inc.

RIM faces a court order halting BlackBerry service in the United States if it can’t get the verdict thrown out. More than 70 per cent of the company’s $1.35-billion in annual revenue comes from the United States. It has $2.5-billion in cash, marketable securities, short- and long-term investments and the money set aside for the litigation, Mr. Perez-Fernandez said.

“They can come up with a billion if they have to,” said Mr. Perez-Fernandez, who rates the Waterloo, Ont.-based company’s shares “sell” and does not own them. “When the $450-million settlement was announced, it was clear it was a discount.”

Read the rest at Globe and Mail …