Black­Berry signs patent deal with BLU

The Globe and Mail (Alberta Edition) - - OPINION - ALASTAIR SHARP TORONTO JAN WOLFE NEW YORK

Agree­ment with An­droid hand­set maker ends 2016 in­fringe­ment law­suits, part of an ef­fort to gen­er­ate rev­enue from its tech­nol­ogy

Black­Berry Ltd. said a li­cens­ing deal it signed with low-end An­droid hand­set maker BLU

Prod­ucts Inc. will bring it re­cur­ring rev­enue, end­ing a le­gal dis­pute over patents that ri­val Google has asked the U.S. gov­ern­ment to re­voke.

Black­Berry did not dis­close fi­nan­cial terms and its shares were lit­tle changed af­ter the news, clos­ing on Thurs­day up 0.8 per cent on the Nas­daq.

Black­Berry filed two law­suits against Mi­ami-based BLU in June, 2016, part of an ef­fort by the Cana­dian

com­pany to gen­er­ate rev­enue from its trove of tech­nol­ogy patents.

Al­pha­bet Inc.’s Google re­sponded to law­suits against a maker of phones run­ning its An­droid op­er­at­ing sys­tem by chal­leng­ing six of the patents at the U.S. Patent and Trade­mark Of­fice.

In late Au­gust and early Septem­ber, a patent of­fice ap­peal board said that Google had a “rea­son­able like­li­hood” of win­ning the in­val­i­da­tion of four patents in a full re­view.

The deal be­tween Black­Berry and BLU was likely se­cured prior to a July 19 mem­o­ran­dum of un­der­stand­ing filed with the court hear­ing their patent dis­pute. The two firms have de­clined to dis­close fi­nan­cial terms of that agree­ment.

Black­Berry chief ex­ec­u­tive of­fi­cer John Chen said on a Sept. 28 earn­ings call that his com­pany had re­ceived rev­enue from BLU, but did not elab­o­rate.

It was not clear if that pay­ment was in­cluded in that quar­ter’s earn­ings, which beat an­a­lysts’ forecast on a jump in li­cens­ing fees that in­cludes patent pay­outs and roy­al­ties on Black­Ber­ry­branded de­vices and soft­ware sold by oth­ers.

Patent li­cens­ing deals are typ­i­cally struc­tured with an up­front pay­ment to cover past sales and on­go­ing roy­alty pay­ments tied to fu­ture sales.

Mar­ket in­tel­li­gence com­pany IDC es­ti­mates that BLU ac­counts for less than 1 per cent of global smart­phone mar­ket share.

Black­Berry said in its state­ment on Thurs­day that the com­ple­tion of the BLU deal al­lows it to fo­cus on other li­cens­ing tar­gets in the mo­bile com­mu­ni­ca­tions industry.

“Any­time you have roy­al­ty­bear­ing li­censes, you are set­ting a mar­ket rate,” said David Prid­ham, chief ex­ec­u­tive of Dal­las-based patent con­sult­ing firm Do­min­ion Har­bor Group, which re­cently an­a­lyzed Black­Berry’s patent port­fo­lio on be­half of a group of hand­set man­u­fac­tur­ers.

“Do­ing so with a smaller player will be help­ful as Black­Berry turns its at­ten­tion to larger mar­ket in­cum­bents,” he said.

Black­Berry is also wag­ing two other patent law­suits, one in­volv­ing Nokia Oyj’s mo­bile net­work­ing tech­nol­ogy filed in Fe­bru­ary and an­other broadly tar­get­ing Avaya prod­ucts that was filed in July, 2016. Black­Berry (BB) Close: $14.34, up 14¢

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