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June 11, 2010

Motorola and Research In Motion say they have finally settled out of court a two-and-a-half year old patent dispute that had each claiming the other was infringing on the others patents rights.

The settlement was long seen as imminent, but up until today, both parties still had arguments about a few remaining issues.

The origins of the dispute itself began when a 2003 agreement between the two companies expired in November 2007.

Failed talks between the two mobile device makers led to the filing and counter-filing of legal claims in early 2008, and had been dragging on ever since.

Originally, Motorola was seeking a ruling that it didn't infringe on no less than five RIM patents, including two that were related to the Moto Q device, and also charged that RIM’s Curve and Pearl devices, among others, violated seven Motorola patents, including software that links devices and corporate servers.

For its part, Research In Motion claimed that Motorola infringed on nine patents and was demanding exorbitant royalties for its patents.

In resolving this patent dispute, both Motorola and RIM said they have come to a “long-term, intellectual property cross-licensing arrangement involving the parties receiving cross-licenses of various patent rights, including patent rights relating to certain industry standards and certain technologies, such as 2G, 3G, 4G, 802.11 and wireless email technology.”

A recent report from Gartner showed that RIM was the No. 4 device maker in global sales during the first quarter of 2010, selling more than 10.5 million devices and garnering a 3.4 percent of the market share.

For its part, Motorola sold just over 9.5 million devices garnering about 3 percent of the global mobile device market.

RIM’s Blackberry operating system was the No. 2 best selling smartphone OS worldwide during the first quarter of 2010, holding a little over 19.3 percent of the market share, while Google’s Android OS, which Motorola is relying heavily on to boost its sagging fortunes, held almost a 9.7 percent market share.

The two companies also said in a statement that they would transfer certain patents to the other party.

As for any financial consideration, it appears Motorola made out in the case as it will receive an up-front payment and ongoing royalties from RIM. However, neither company would disclose any numbers.

Motorola’s stock was up about 3.2 percent in early Friday trading at $7.06 per share, while RIM’s stock was up slightly as well to $59.28 per share.

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Source: Motorola & RIM.