Shares of BlackBerry inched upward after the company said Qualcomm would pay $940 million to settle a licensing dispute.
An arbitration panel ruled last month that BlackBerry had overpaid Qualcomm in royalty payments from 2010 to 2015 under terms of a licensing deal. Qualcomm was ordered to pay the Canadian company roughly $815 million plus attorneys’ fees and interest.
“Following a joint stipulation by the parties, the arbitration panel has issued a final award providing for the payment by Qualcomm to BlackBerry of a total amount of U.S.$940 million including interest and attorneys’ fees, net of certain royalties due from BlackBerry for calendar 2016 and the first quarter of calendar 2017,” BlackBerry said in a brief press release. “Qualcomm will pay the full amount of the final award on or before May 31, 2017.”
BlackBerry is becoming increasingly active in patent litigation following its exit from the handset manufacturing business. Earlier this year it filed a lawsuit claiming Nokia is infringing on as many as 11 of its patents in offerings to carriers including AT&T and T-Mobile. Last August it filed a 105-page patent lawsuit against Avaya, then followed that two weeks later with a suit claiming Blu Products was infringing on 15 of its patents.
The arbitrator’s decision marked a big win for BlackBerry as it moves to expand its software development and licensing businesses, Maynard Um of Wells Fargo Securities wrote last month.
“The magnitude of the award was the big surprise to us and we think is clearly positive for the company,” Um said in a research note. “BlackBerry’s net cash/investments balance at the end of (the fiscal fourth quarter) was $1.1 billion, and the award should grow its balance to at least $1.92 billion (BlackBerry’s initial expectation is that there will not be any tax impact), which, at yesterday’s close, would account for nearly half of its market cap.”
Meanwhile, Qualcomm remains engaged in a high-profile patent dispute with Apple. The iPhone vendor filed a $1 billion lawsuit against Qualcomm in January over patent royalties, just days after the dominant chipmaker was sued by the Federal Trade Commission on charges of anticompetitive practices. The suit contends that Qualcomm insists on onerous royalties for its technologies and demands royalties for technologies it didn’t develop, such as Apple’s Touch ID.
Qualcomm hit back at Apple last month, claiming in a countersuit that the iPhone vendor “breached” and “mischaracterized” agreements with the chipmaker and interfered in deals with Qualcomm licensees.
Shares of BlackBerry climbed roughly 1% Friday morning following the news of Qualcomm’s settlement.