RIM Must Pay $147 Million Over Mformation Patent

Research in Motion Ltd., the BlackBerry device maker seeking a comeback after falling behind Apple Inc. and Google Inc. (GOOG), was found liable by a federal jury for $147.2 million in damages for infringing patents held by Mformation Technologies Inc.

Jurors determined that closely held Mformation, based in Edison, New Jersey, proved at trial in federal court in San Francisco that RIM software enabling companies to manage workers’ BlackBerry devices remotely from a server infringed Mformation’s inventions. The software is called BlackBerry Enterprise Server.

Mformation, a maker of mobile-device management software, sued RIM in 2008, alleging infringement of two patents. The company claimed it disclosed details of the technology to RIM during licensing discussions. After refusing to take a license, the BlackBerry maker modified its software to include the patented systems, Mformation said in its complaint.

RIM denied wrongdoing and said the patents were invalid, according to court filings.

Mformation proved that RIM should pay a royalty of $8 each on 18.4 million units for a total of $147.2 million, the jury found yesterday after a trial that lasted three weeks.

Past Sales

Amar Thakur, Mformation’s attorney, said the jury’s damage award is for royalties on past sales of devices to nongovernment U.S. customers. Damages for future sales outside the U.S. and government customers could increase the amount by two to three times, he said in an interview after the verdict.

RIM Chairwoman Barbara Stymiest said July 10 that the company is considering all strategic options even as it pushes for a January release of the BlackBerry 10. The release of the BlackBerry 10 operating system, the linchpin of its comeback plan, has been delayed twice. In June, RIM reported a first- quarter loss excluding restructuring expenses that was more than five times bigger than what analysts had predicted.

Sales tumbled 43 percent to $2.8 billion, and the company said it would cut 5,000 jobs, about a third of its workforce. RIM’s stock has lost about 95 percent of its value since peaking in 2008. RIM’s share of the global smartphone industry fell by more than half to 6.4 percent in the first quarter, according to research firm IDC. Google’s Android increased to 59 percent, while Apple accounted for 23 percent.

‘Single Patent’

“While the verdict is in favor of MFormation on some claims of the single patent remaining in suit, five of eight claims were found to be invalid,” Crystal Roberts, a spokeswoman for Waterloo, Canada-based RIM, said in an e-mail. “The court still has to decide the question of ‘Obviousness’ with respect to the validity of the only patent in suit.”

Roberts said RIM has a pending request before the court to reverse yesterday’s verdict.

The case is Mformation Technologies v. Research in Motion Ltd. (RIM), 08-04990, U.S. District Court, Northern District of California (San Francisco).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.