BlackBerry settles arbitration with Qualcomm, will receive $940 million for contract dispute over patent royalties

“BlackBerry Curve 8520 Keypad” by langleyo. Licensed under CC BY-ND 2.0.

On Friday, May 26th, Canadian telecommunications company BlackBerry Ltd (NASDAQ:BBRY) announced that it had reached an agreement with San Diego, CA-based semiconductor designer Qualcomm, Inc. (NASDAQ:QCOM) to resolve arbitration proceedings over tech royalty payments made between the companies. Terms of the agreement involve Qualcomm paying BlackBerry a total of $940 million to account for net royalties due to BlackBerry during 2016’s calendar year and 2017’s first quarter. The announcement indicates that the payment were to be made before or on May 31st.

This settlement amount is more than $100 million greater than the original $814.9 million binding interim arbitration award which Qualcomm was ordered to pay BlackBerry this April. The dispute arose over a contract dispute relating to Qualcomm’s voluntary per unit royalty cap program and if that program applied to BlackBerry’s non-refundable prepayments of royalties for sales of subscriber units from 2010 through the end of 2015. At the time of the April arbitration award, business news outlet CNBC reported that BlackBerry CEO John Chen said that BlackBerry will continue to work collaboratively on tech development projects with Qualcomm, despite the contract dispute.

The first half of 2017 has seen a great deal of business turbulence affecting Qualcomm, especially where its patent licensing activities are concerned. In January, both the Federal Trade Commission (FTC) and Cupertino, CA-based consumer tech giant Apple, Inc. (NASDAQ:AAPL) filed lawsuits against Qualcomm for violations of fair, reasonable and non-discriminatory (FRAND) licensing obligations of its baseband processor and cell phone semiconductor device patents. Qualcomm struck back against Apple this April with a lawsuit alleging that Apple engaged in tortious interference to encourage regulators in multiple foreign jurisdictions to fine Qualcomm for its licensing activities.

For BlackBerry, recent months have seen that company increase its patent assertion activities after the company announced last September that it would stop designing phones for sale on consumer markets. This February, BlackBerry filed suit against Finnish telecom firm Nokia (NYSE:NOK) over Nokia’s use of Long Term Evolution (LTE) and other cellular communications technologies which have been developed by BlackBerry. More recently, BlackBerry argued in a case before a Northern Texas bankruptcy court to lift a Chapter 11 bankruptcy stay shielding Santa Clara, CA-based communications firm Avaya Inc. from patent infringement proceedings. As a defendant, BlackBerry did settle a patent infringement case this January brought by Delaware-based MAZ Encryption Technologies over encryption technologies.


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