July 16, 2009 / 12:06 PM / 8 years ago

UPDATE 2-Research In Motion, Visto settle patent dispute

* BlackBerry maker to pay Visto $267.5 mln

* RIM to get license for all Visto patents

* Deal seen ending RIM's last major patent-related battle (Recasts, adds analysts' comments, background; in U.S. dollars unless noted)

By Pav Jordan

TORONTO, July 16 (Reuters) - Research In Motion RIM.TO RIMM.O has settled a long-running patent dispute with tiny tech company Visto Corp, the last vestige of a patent controversy that once looked capable of shutting the BlackBerry maker down.

Waterloo, Ontario-based RIM said it will pay Visto $267.5 million to settle all outstanding patent litigation over technology, ending their years-long feud.

RIM shares were up 2.51 percent in Toronto on Thursday at C$80.35, also boosted by strong sales its new new BlackBerry Tour smartphone model, analysts said.

Under the terms of the deal, RIM will receive a perpetual and fully paid license on all Visto patents as well as the transfer of some intellectual property from Visto.

"This settlement is significant because it removes the last major patent-related sword of Damocles that's been hanging over RIM for virtually the entire decade," said Carmi Levy, an independent technology analyst based in London, Ontario.

The settlement brings to an end a string of related wireless suits, Levy said, which saw NTP, the company that is part owner of Visto, settle patents with RIM for over $600 million in a 2006 agreement.

"This settlement with Visto is significant in that it removes what is likely the final patent-related claim against RIM, thus allowing it to proceed in-market without having to worry about diverting its attention away from its core market. As competition intensifies in the global smartphone market, this is an important point, as RIM can hardly afford to lose focus," Levy said.

RIM said it expects most of the $267.5 million will be expensed as a one-time item in the second quarter of fiscal 2010. The remainder will be classified as an intangible asset.

Analysts said the settlement, while large, is far from insurmountable for RIM, which took angel investment cash and created the multibillion-dollar maker of the ubiquitous BlackBerry, and now earns more than $600 million per quarter.

"For me, I'd rather have the risk removed than not. Any time you remove risk from a story and the fundamentals continue to be good, the stock is going to react positively," said Peter Misek, a Toronto-based analyst who covers RIM for Canaccord Adams.

"This was the last big amount of litigation that was sitting over top of them."

Canaccord Adams upgraded RIM to "buy" from "hold" last week, citing a recent slump in the smartphone maker's stock price and double digit growth in BlackBerry sales for June, despite the recession.

Under the terms of the settlement with Visto, both sides also agreed to drop all outstanding worldwide litigation.

The two sides have been involved in lawsuits over BlackBerry technology in a number of countries.

The settlement is expected to be completed next week.

Earlier this year, RIM won a U.K patent lawsuit against Visto over its e-mail technology. ($1=$1.12 Canadian) (Additional reporting by Scott Anderson; editing by Rob Wilson)

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