RIM's patent payment may spawn more suits

Research In Motion Ltd. could face more legal action now that it has agreed to pay Visto Corp. $267.5-million (U.S.) to settle a prolonged patent infringement case, patent experts say.

RIM has become something of a target for patent holders since 2006, when it paid $612.5-million to settle a patent dispute involving NTP Inc. That case dragged on for five years and nearly shut down BlackBerry service in the U.S.

"NTP was just a massive case in the history of our industry," said Lewis Zaretski, vice-president of ThinkFire Services, a New Jersey-based patent brokerage. "It made a lot of people think, 'Hey maybe I can make $600-million too.' "

California-based Visto, a privately held wireless e-mail company, sued RIM for patent infringement two months after the NTP settlement. Visto filed its suit in a Texas court known for large patent awards and RIM shot back with a counterclaim. The legal war escalated with both sides trading lawsuits in Texas, California, Canada and Europe.

Visto, whose software is used by Vodafone Group PLC, Deutsche Telekom AG's T-Mobile and Sprint Nextel Corp., claimed that RIM was using its technology without a licence. RIM argued that the Visto's patents contained no new inventions.

Yesterday, RIM and Visto announced a ceasefire. RIM agreed to pay $267.5-million to license Visto's patents and settle all patent litigation between the firms.

In exchange, RIM gets a perpetual and fully paid license on all Visto patents, as well as a transfer of certain Visto intellectual property.

The settlement comes just days after a jury in Texas handed down the largest award ever in a patent infringement case - $1.67-billion. That case involved a unit of Johnson & Johnson that claimed that Abbott Laboratories Inc. violated a patent in developing a popular arthritis drug, Humira, which generated more than $4-billion in sales last year. The jury awarded Johnson & Johnson $1.17-billion in lost profits and $504-million in royalties.

Mr. Zaretski said such large awards have prompted many investors to buy patents or invest in companies that hold patents.

One example is Altitude Capital Partners, which was created in 2005 to "invest in portfolio companies that have valuable patents, trademarks/brands, copyrights, royalty streams, trade secrets, and other intangible assets."