Update: RIM Settles Patent Dispute, Partners Delighted

RIM has paid NTP $612.5 million to settle the case, staving off a potential court-ordered injunction could have shut down Blackberry service to RIM's 3.3 million U.S. customers. The settlement includes a perpetual, fully-paid up license, and ends all legal proceedings, according to a statement issued Friday by RIM .

The licensing and settlement covers all of NTP patents and covers all of RIM's products, services and technologies, as well as protecting RIM's partners from any future legal action, according to RIM.

Dan Croft, president and CEO of Mission Critical Wireless, a Lincolnshire, Ill.-based solution provider, is delighted that a settlement has been reached. "Now we can go back to concentrating on helping enterprises become more productive through wireless technology and not on the status of legal proceedings," Croft said.

Steve Beauregard, president of Regard Solutions, Santa Monica, Calif., received a flood of emails from customers within minutes of Friday afternoon's settlement announcement. "There has been real nervousness with regards to the possible shutdown," he said. "We're thrilled to resume directing our energy toward building enterprise-class applications on what we consider the best of breed wireless platform on the market."

Although RIM last month announced it had developed a workaround that didn't violate NTP's patents, many industry observers suggested that RIM was oversimplifying amount of difficulty an injunction would have caused for businesses.

In an interview with CRN earlier this week, Patty Wilkey, director of global desktop and mobility at EDS, Plano, Texas, said the workaround would likely require upgrades to the ROM of each Blackberry device, which could take between 30 minutes to an hour for each device. The Blackberry Enterprise Server would also have to be shut down, equipped with the patch and then restarted, Wilkey said.

RIM Friday also revised an earlier quarterly forecast of earnings between 76 and 81 cents per share on revenue between $590 million and $620 million, saying it now anticipates earnings of 64 cents to 66 cents per share on revenue of $550 million to $560 million.

Taking some of the sting out of the settlement is the fact that RIM had already set aside $450 million for the settlement, and the Waterloo, Ont.-based company plans to record the additional $162.5 million in its fiscal Q4, which ended on Feb. 26. RIM's Q4 earnings call is slated for April 6.

Investors shrugged off the charge, pushing RIM shares up $13.26 to $85.18 in after hours trading Friday.