A Dutch semiconductor company said on Tuesday it had filed a patent infringement suit against Research In Motion Ltd, adding to the BlackBerry maker's troubles and sending its shares tumbling. An affiliate of NXP Semiconductors NV alleges that versions of RIM's BlackBerry phone and PlayBook tablet infringed on patents issued to it between 1997 and 2008. The patents in question relate to design, data transmission and other features of the devices.
NXP demands a halt to the alleged infringements and seeks to recover what it claims as lost profit, reasonable royalties and triple damages for willful infringements. It has not specified a dollar amount it is seeking from the struggling smartphone maker, whose share price has dropped about 80 percent in the past year as its market share has eroded.
"It's a lawsuit aimed at extracting some money from RIM at a time when RIM is most vulnerable," said Alex Poltorak of General Patent Corp, a firm that provides patent consulting.
RIM is no stranger to patent litigation. It was almost brought to its knees by a five-year patent fight that began in 2001 and at one point threatened to shut down RIM's U.S. operations. RIM eventually paid out more than $600 million to NTP Inc, a patent holding company, to settle the case. NXP filed its lawsuit on Monday in the U.S. District Court in Orlando, Florida. RIM plans to hold its annual BlackBerry World conference there in early May.
A RIM spokeswoman declined to comment on Tuesday, citing the Canadian company's policy of not discussing litigation. Litigation has become a major weapon in a global patent war being waged among makers of mobile phones, tablet computers and their operating software in a market worth billions of dollars. Apple, Microsoft, Oracle and numerous hardware companies using Google's Android software are locked in court battles over patents aimed at extracting licensing fees from their rivals.
RIM teamed up with Apple, Microsoft and others to outbid Google for a trove of patents sold last year by bankrupt network equipment company Nortel Networks. Google later bought Motorola Mobility in a move many suggested was a play for its patents.
Based in Eindhoven, Netherlands, NXP was spun off from Koninklijke Philips Electronics NV in 2006. It said it now owned 11,000 issued or pending patents, and generated $4.2 billion of annual revenue. Up against fierce competition from Apple Inc and phones running on Google Inc's Android, RIM has watched its once-dominant market share erode and sales performance decline.
Last week, RIM said it will stop issuing financial forecasts and that it was reviewing strategic options, such as entering partnerships and joint ventures. Thorsten Heins, who became chief executive in January when the company's longtime co-CEOs resigned under pressure, would not rule out a possible sale of the company.
General Patent Corp's Poltorak said RIM may seek a quick settlement in the NXP case as pending litigation could complicate any sale talks. Two sources told Reuters last week that RIM has avoided talks with potential suitors since Heins took over.
In afternoon trading on the Nasdaq, RIM fell $1.10, or 7.6 percent, to $13.27; and NXP fell 67 cents, or 2.6 percent, to $25.45.