RIM Sees $147.2 Million Patent Verdict Overturned
Embattled BlackBerry maker Research In Motion finally caught a break when a federal court judge overturned a $147.2 million verdict against the company in a patent-infringement case with Mformation Technologies.
A jury in San Francisco last month found that RIM had infringed on a patent from Mformation, which makes mobile device management software. The patent at issue involves a remote management system for wireless devices that RIM uses in its products. Mformation filed the lawsuit against RIM in 2008.
U.S. District Court Judge James Ware reportedly said in his written opinion Aug. 8 that the jury erred in its finding against RIM and that there was no evidence to back up Mformation's claim. Ware also reportedly ruled that if his ruling is overturned on Mformation's appeal, RIM will be allowed to see a new trial rather than having the $147.2 million jury award reinstated.
RIM officials applauded Ware's ruling.
"We appreciate the judge's careful consideration of this case," Steve Zipperstein, RIM's chief legal officer, said in a statement. "RIM did not infringe on Mformation's patent and we are pleased with this victory."
Zipperstein also criticized what he sees as the exploitation of the patent system "in the pursuit of other goals" beyond fostering innovation.
Mformation CEO Todd DeLaughter said the company is weighing its options going forward.
"Mformation is deeply disappointed that the court would overturn a jury verdict after a month of trial including a week of thoughtful deliberation by the jury," DeLaughter said in an email to Reuters.
The ruling comes at a good time for RIM, a one-time dominant player in the mobile phone space that has seen its fortunes fall significantly since 2007 with the rise of Apple's iPhone and the myriad devices running Google's Android mobile operating system. RIM's share price reportedly has dropped 70 percent over the past year.
RIM's difficulties have continued over the past couple of months, with CEO Thorstein Heins in May announcing another delay in the release of the much-anticipated BlackBerry 10 platform to early next year, a $518 million quarterly loss and 5,000 new layoffs.
Two weeks later, Heins and other RIM executives faced an angry group of shareholders who voiced their concerns over the company's execution and financial problems. One investor said he was "extremely critical" and "extremely angry" with the board, and that all the longtime members should not have been re-elected. "Why did they just let it get out of hand so badly and so much before they did anything about it?" the shareholder asked.
According to market research firm IDC, RIM's share of the smartphone market continues to drop as those of Google and Apple rise. In the second quarter, Android saw shipments more than double, and its market share grow to 68.1 percent. iPhone shipments increased 27.5 percent, though Apple's market share fell to 16.9 percent.
Meanwhile, sales of BlackBerry phones fell 40.9 percent over the same period in 2011-from 12.5 million units in the second quarter in 2011 to 7.4 million units in the second three months this year, according to IDC's Aug. 8 report. RIM's market share plummeted from 11.5 percent to 4.8 percent.
"The mobile OS market is now unquestionably a two-horse race due to the dominance of Android and iOS," IDC analyst Kevin Restivo said in a statement. "With much of the world's mobile phone user base still operating feature phones, the smartphone OS market share battle is far from over. There is still room for some mobile OS competitors to gain share, although such efforts will become increasingly difficult as smartphone penetration increases."