BlackBerry might not be what it was, but with a little fiscal help from Qualcomm maybe it can become a bigger part of the telecom landscape.
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Timing is an interesting thing in business as highlighted this week by a court decision to grant BlackBerry nearly $815 million in royalty overpayments made to Qualcomm.
The decision stemmed from an agreement reached between BlackBerry and Qualcomm last year that had the latter agreeing to cap certain royalties applied to payments made by BlackBerry under a licensing agreement.
Typically, when it comes to royalties and licensing I turn off all thoughts of reason and just play along. I know these things are sort of important to those that come up with awesome inventions and patent ideas, but the big turn off is that these things are important to all lawyers, which I stopped caring about in 1994.
The timing aspect of all of this comes into play as the BlackBerry of today is nowhere near the Research in Motion of yesterday in terms of its financial standing.
Back in 2006 – when RIM’s BlackBerry devices were all the rage and the only iPhone on the market was a Cisco Systems’ platform that had been lying dormant for years – RIM ceased legal wrangling and agreed to pay patent holder NTP $612.5 million to settle a case that began back in 2003. The case revolved around RIM’s use of what NTP said was patented technology crucial to the device makers mobile email service.
Now, even back in the mid-2000s, $612.5 million was a lot of money … to most people. However, to RIM that was just a fraction of what the company was worth as the company in early 2007 would hit a market capitalization in excess of $60 billion. Plus, without making the payment RIM was likely going to be forced to shutter its service, which could have altered the course of world history
Today, $815 million may not be quite as much money for some people, but for BlackBerry and its now approximately $4.7 billion in market cap, that’s a nice chunk of change. And, with BlackBerry having basically found a sort of happy place in terms of its current operations after ditching any hope of getting back into the smartphone space, that chunk of change could help the carrier jumpstart its second act.
Of course, as with all legal proceedings, this week’s court decision is merely the beginning what it likely to be a long and drawn out process. Heck, even BlackBerry is taking a low-key approach to the news, stating that while it’s “pleased” with the ruling, it’s looking forward to ongoing work with Qualcomm.
“BlackBerry and Qualcomm have a longstanding relationship and continue to be valued technology partners,” said BlackBerry CEO John Chen in a statement. “We are pleased the arbitration panel ruled in our favor and look forward to collaborating with Qualcomm in security for ASICs and solutions for the automotive industry.”
(It should be noted that while the BlackBerry response does indeed seem quite low key, it’s basically the ultimate burn for Canadians.)
And, with Qualcomm as the defendant in the case, I am guessing it’s a sure bet we have not yet heard the end of this one.
But, what if instead of fighting the case Qualcomm moved to work out some sort of arrangement that would be beneficial to both companies? Qualcomm was at one point said to be willing to make an offer to acquire BlackBerry in an attempt to bolster its extensive patent portfolio. I am not sure of the actual business case in such a move, but it could help deflect the financial impact and would garner untold accolades from Canadians.
So, come one Qualcomm, I know you have more lawyers than BlackBerry has employees, but why not let those guys get back to more important things like battling Apple and instead be part of the BlackBerry renaissance. I think that’s something all of us can get behind.
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