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RIM ordered to pay $147.2-million (U.S.) in patent litigation case

Thursday RIM managed to shock Bay Street analysts with its dismal performance.

Matthew Sherwood/The Globe and Mail

Research In Motion Ltd. has been ordered by a U.S. court to pay $147.2-million (U.S.) in a patent litigation case against the mobile device management company Mformation, a development that comes as the Waterloo, Ont.-based smartphone maker struggles with a global restructuring and 5,000 layoffs.

The ruling came on Friday from the U.S. District Court for the Northern District of California, and simply piles onto the host of other challenges facing RIM as its new management team attempts to make the company leaner, slim its product portfolio, halt declining revenues and launch a new crop of BlackBerry 10 devices early in 2013 that are meant to save the company.

Mformation sued RIM in 2008, bringing claims on a patent for a process that remotely manages a wireless device over a wireless network, a court filing says.

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RIM said in a release on Saturday that it "does not believe that the Mformation patent in question is valid," and that the trial judge "has yet to decide certain legal issues" that could impact the outcome of the verdict released on Friday.

"RIM is disappointed by the outcome and is evaluating all legal options," the company said.

Amar Thakur, an attorney for Mformation, said the jury directed RIM to pay an $8 royalty for every BlackBerry device connected to RIM's enterprise server software, which brings the total award to $147.2-million. The verdict only covers U.S. sales through trial, Mr. Thakur said, and not future or foreign damages.

For years an important part of the high technology landscape, patent litigation is becoming increasingly common and volatile as mobile devices increasingly adopt a full touchscreen form factor and software-user interfaces become more similar.

Huge companies such as Apple Inc., Google Inc., Samsung Electronics, Nokia Corp. and RIM are constantly in court with each other, trying at times to profit from a rival's products success or seeking to ban the sale of a product in a certain jurisdiction.

Companies also purchase unsuccessful patents from other firms in order to protect themselves in the future; Nortel Networks Corp., which was dismantled entirely, and Motorola, which was bought by Google, were both prized for their vast wireless patent portfolios.

Mformation, a global firm headquartered in New Jersey, is a major player in the mobile device management space, the rapidly-growing area of helping corporations and government securely manage the thousands of mobile devices, including tablets, that are proliferating within their companies.

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RIM, of course, has long been the dominant smartphone within companies and government departments. But as the BYOD – bring your own device – trend accelerated in workplaces and many employees opted for Android devices or iPhones, RIM acquired the mobile device firm Ubitexx and charged headlong into offering services to help companies manage not just BlackBerrys, but other devices, with a new service called BlackBerry Mobile Fusion.

With a report from Reuters

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