Friday, March 03, 2006

Why A Deal Was Reached

Analysts say the main reason for the agreement appears to be the judge’s impatience and unwillingness to wait for the US Patent Office to rule on the NTP patents. This combined with the beginnings of a slowdown in BlackBerry sales, as customers feared it would be disruptive or impossible to work around an injunction force RIM to make the agreement. NTP in turned agreed because $612.5 million is a lot of money.

Since the US Patent Office’s re-examination of the patents is unaffected by the deal, RIM may be paying for patents that will soon turn out to be invalid. As a result RIM co-CEO Jim Balsille feels that he “took one for the team” by agreeing to license patents that he feels “will not survive” but with RIM stock rising by 18.5% in after hours trading following the announcement he must be feeling better to some extent.


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