The clear winners of the settlement deal are RIM investors, seeing how the stock is almost up 20% in after hour trading. However, things get a little greyer when deciding who won between RIM and NTP.
NTP got a bigger pay day than the original $450 million which it was close to settling last year. But the original deal included royalty fees for each Blackberry sold, instead of the one time $612.5 million. That’s $162.5 million dollar difference which NTP would probably have easily surpassed throughout the lifetime of its patents. And this is nothing compared to what they have got if NTP was awarded the 8.55% royalty fees in 2002 by Judge Spencer. There was no reason why Judge Spencer wouldn’t have kept his original verdict making NTP even richer but it was probably too much money for NTP to walk away from another time. Still this is such moot point considering NTP still got $612.5 million for patents that were deemed invalid by the USPTO.
With RIM, they settled for a lot less than the $1 billion that most experts predicted which helped RIM’s stock explode. Probably little comfort, seeing how RIM could have settled with NTP for the measly sum of $20 million at the time when RIM was still calling their devices pagers. That is the one mistake they made, albeit a very big mistake it was better than settling for the initial 5.7% royalty fees verdict rewarded to NTP in 2001 or the 8.55% in 2002. With revenues of $560 million last quarter, that would have meant a payment to NTP in the range of $25 million for just 3 months. Jim Balsillie’s ego may be a bit deflated but in the long run this was the best for RIM and he probably knows it seeing how he’s a lot richer – on paper anyways.
So we are putting the question out to our readers. Whether you think RIM or NTP won, or perhaps it was fairly even for both sides.
