BlackBerry maker Research in Motion Ltd. will take court action against NTP Inc after hitting an impasse in finalizing a patent dispute settlement, reopening a legal battle investors had been told was wrapped up.
RIM, which helped popularize mobile e-mailing with its thumb-operated BlackBerry, said in a statement on Thursday it will ask the court to enforce the settlement terms.
"Nobody really seems to know what this means. This is really odd ... for the short term, this will upset and disturb the market," said Duncan Stewart, a partner and portfolio manager with Tera Capital Corp.
The Canadian company agreed in March to pay $450 million to end the long-running patent dispute with closely held NTP, a U.S.-based patent holding company in return for the right to continue its BlackBerry-related business without further interference from NTP or its patents.
At the time, analysts said the settlement was good news for RIM because it removes a major legal overhang, including the risk it could be barred from selling its flagship product in the United States.
The two sides then started negotiating a final license and settlement deal.
"RIM has been negotiating in good faith to complete that process," the company said.
"However, NTP refuses to honor its obligations under the term sheet and finalize the definitive documents. As a result, an impasse has been reached with respect to the settlement."
RIM said it is reviewing any potential accounting implications of the impasse and said it is holding settlement payment until the matter is resolved.
NTP successfully sued RIM in 2002 for patent infringement. In December, a U.S. appeals court upheld the patent infringement finding against RIM, but said part of the earlier ruling was flawed and sent the case back to a lower court.
Analysts had said the December decision strengthened NTP's position and put pressure on RIM to settle.