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RIM ordered to pay over $147 million in patent lawsuit

Mformation sued RIM over remote server technology; news could not come at worse time

Financial trends and news by Steven Loeb
July 14, 2012 | Comments
Short URL: http://vator.tv/n/285e

They say that when it rains, it pours, and in my experience that has turned out to really be true. When something bad happens, it can almost seem like you are cursed, that bad luck starts piling up around you. That must be what Research In Motion (RIM) feels like after a major verdict went against the troubled company.

On Friday, a jury in a San Franciso federal court sided against RIM in a lawsuit brought by Mformation Technologies.

Edison, New Jersey-based Mformation, founded in 1999, is a mobile-device management software maker. Its mission, it says on its website, is “to enable organizations to manage and control any device — from mobile devices to wireless computing devices, consumer electronics and other machines — across any network type, anywhere in the world.”

The lawsuit against RIM stretches back to 2008, when Mformation sued RIM over patents relating to RIM’s remote management system for wireless devices, called BlackBerry Enterprise Server.

Mformation claimed that it had met with RIM and had shared details of its server technology during discussions over licensing. RIM refused to give Mformation a license, and instead updated its software with Mformation’s patented technology.

RIM claimed that it was already implementing the software before Mformation submitted its patent.

RIM is being forced to pay $8 for every BlackBerry that is connected to RIM’s Enterprise Server software. Since 18.4 million BlackBerrys are connected, that comes to $147.2 million in total.

Bad timing for RIM

This verdict could not come at a worse time for RIM.

In its most recent earnings report, RIM reported that its revenue was $2.8 billion in Q1 2013, down 33% from $4.2 billion the previous quarter, and even further from $4.9 billion in Q1 2012. RIM also announced that it would be laying off 5,000 workers and that it would be delaying the release of the BlackBerry 10 until 2013.

After the dismal news, company stock dipped 19% in a single day. It now stands at $7.24, a far cry from its peak of $143.89 in June 2008.

The company, which once had 43% of the smartphone market share, no longer even makes the top five.

While CEO Thorstein Heins insists that his company is doing fine, telling reporters, “There’s nothing wrong with the company as it exists right now,” it has come out that RIM is so strapped for cash that it is going to sell its corporate jet just to make $6 million.

Neither RIM nor Mformation were available for comment

(Image source: anitaarrkay.wordpress.com)


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