RIM results hit by NTP patent spat

RIM results hit by NTP patent spat


Overall impact 'greater than previously anticipated'

Canadian vendor Research In Motion has revealed that its preliminary operating results for the quarter ended 4 March have been hit by uncertainty caused by the ongoing NTP litigation.

The company, which settled with NTP for $612.5m last week, said that net subscriber additions for the fourth quarter are expected to be in the range of 620,000 to 630,000, well below the 700,000 to 750,000 range provided in December.

Uncertainty surrounding the NTP litigation prompted corporate and retail customers in the US to defer BlackBerry purchase commitments, the company said, adding that "overall impact was greater than previously anticipated".

Revenue for the quarter is expected to be flat, with the third quarter in the range of $550m to $560m. This is lower than the $590m to $620m provided in December, and compares with revenue of $404.8m in the same quarter last year.

Customer uncertainty mainly affected software and hardware revenues, but service revenues during the quarter were slightly lower than expected due to the lower subscriber account additions in the quarter.

"The settlement, while appearing sizable, solves a significant problem for RIM," said Michael Stolarski, an attorney at intellectual property law firm Brinks Hofer Gilson & Lione.

"RIM was facing a possible injunction and shut down of its business. Its proposed workaround to the alleged infringement was reported as not being user-friendly, and efforts at the US Patent Office were not likely to avert the problem it was facing with the court.

"A settlement of this size reaffirms the fundamental value of patents in the marketplace and the need for companies to address these issues as part of their overall business plans."