A San Francisco jury piles on the woe for RIM (RIMM), ruling it must pay $147.2M in patent...


A San Francisco jury piles on the woe for RIM (RIMM), ruling it must pay $147.2M in patent litigation to Mformation over a system that manages a wireless device over a cellular network. The total amount could rise, as it comprises an $8 royalty for every BlackBerry connected to RIM's enterprise server software, and doesn't cover future or foreign damages. RIM is looking to overturn the verdict.

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Comments (18)
  • chopchop0
    , contributor
    Comments (5155) | Send Message
     
    That cash pile left from the heyday of a few years ago isn;t going to last long...
    15 Jul 2012, 09:00 AM Reply Like
  • Ronin.
    , contributor
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    Strangely, your moniker and your comment match up...
    16 Jul 2012, 02:38 AM Reply Like
  • $CLU
    , contributor
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    Google, Apple and MS are next if they haven't paid a royalty.
    No whining when it hits your favorite team next!
    15 Jul 2012, 01:30 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3130) | Send Message
     
    It makes for an odd read. The Mformation patent is from 2005 and sounds like BlackBerry Enterprise Service, or BES. RIMM introduced BES in 1999. Did the company patent it in Canada and fail to patent that in the United States, or is there some other aspect not in these reports? I did read that actual patent listing from 2005. Seems like it would be easy for Mformation to go after Microsoft or Google using the same patent, or a few others they list on their website.
    15 Jul 2012, 03:20 PM Reply Like
  • galaxy travels inc.
    , contributor
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    really with this co. if it weren't for bad news there would be no news at all......
    17 Jul 2012, 09:39 AM Reply Like
  • Tech Geeker
    , contributor
    Comments (21) | Send Message
     
    This won't be settled for a while. RIM will quite likely get it overturned, as it does not really make much sense, as HH points out above.
    17 Jul 2012, 01:55 PM Reply Like
  • Ronin.
    , contributor
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    Does it always work that way, if you appeal, you don't have to pay the judgment until years later? That seems like getting a free loan just by filing...later, I can say nevermind and just pay.
    17 Jul 2012, 05:45 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3130) | Send Message
     
    It works out to around $8 per handset device, but only those managed through BES, and only in the United States. So there is no immediate payment. Given that this was originally filed in 2008, RIMM could easily tie this up a few more years on appeal. They could also try for some form of licensing deal with Mformation, if an appeal looks unlikely to provide any relief. It's still an odd case, though given all the patent wars lately, it's not too surprising. The reaction appears to be that short players are treating it as an immediate outflow of cash, which is not true. Given that short interest is now near 86 million shares, almost any news is likely to move the shares around.
    17 Jul 2012, 06:02 PM Reply Like
  • Ronin.
    , contributor
    Comments (1556) | Send Message
     
    Well, you have to admit, losing a 147m judgment is not good news for anyone... if they sue everyone they can, it will have a more detrimental effect on those companies who are struggling. A similar effect would be if Foxconn had to charge every company that it supplies 10% more to provide the conditions necessary to comply with Chinese law, the business with thin margins will be impacted much more than those with fat margins.

     

    Herr, I have been playing this short for months now, like you, I am not wagering a lot on this one ...I don't need to rely on this piece of bad news for anything, neither do I need to convince anyone of anything, in fact, I've been trying to help some longs by pointing out that this is going lower...and that's what happened...I don't think we're done, either...

     

    ...the company has been its own worst enemy...it also lacks positive catalysts...the one hope was pushed out until next year, and I wonder if they'll even come through in January. They don't seem to want to sell, so they lower the risk for me...any bad news on the EU front, helps me...
    17 Jul 2012, 06:17 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3130) | Send Message
     
    A refresh on short interest shows over 100 million RIMM shares, or nearly 1 out of every 5 shares in the company. So with nearly half of shares held be institutional investors, retail investors at this point are just along for the ride. The August 2012 strikes at 6.00 and 7.00 are getting heavily stacked. We might actually see 6.00 in August, or near that. I think at this point it depends more if the market makers want to push shares that direction, or even lower. I definitely do not think RIMM options are a sure thing; they seem even more risky now.

     

    If the $8 per device in the United States went through, then the average selling price would be closer to 185.00 per handset, after subtracting out that licensing. It's not like RIMM would pay up front and be done with it. The judgment implies a recurring expense, and not a one time fine. This might be about a 0.5% to 1% hit on hardware profit margins. The news has far more short term sentiment impact than longer term profit impact, and even then there is so far no indication that long term profits would suffer from this judgement. Once again it is buy on the rumor and sell on the news mentality.
    17 Jul 2012, 09:33 PM Reply Like
  • Tech Geeker
    , contributor
    Comments (21) | Send Message
     
    Most of these lawsuits are utter garbage from companies looking for a handout. It's really sad how many companies exist for the sole purpose of patent lawsuits. These companies are run by the slimiest of the slime. These guys need to be behind bars. The other sad thing is that most of these lawsuits are ridiculous and will never win, but the company being sued usually settles out of court to avoid all the lawyer and court fees. Again, slime-balls!
    18 Jul 2012, 12:56 AM Reply Like
  • Ronin.
    , contributor
    Comments (1556) | Send Message
     
    You think I should be worried about a short squeeze with that high short interest?

     

    Perhaps there is overreaction. I tend to think that investors are fed up, and it doesn't take much for some to say that enough is enough. What is tha last good news that you remember? To me this will be a textbook case in business what NOT to do...

     

    I doubled my NOK short, and almost did the same for RIMM...I just reinitiated the position, so I will get a little buffer before doubling down. Maybe you should join me on this side Herr. You do enough study on these companies to know what I am saying...make some pocket change while you're at it, why not?
    18 Jul 2012, 12:13 AM Reply Like
  • Herr Hansa
    , contributor
    Comments (3130) | Send Message
     
    I don't really do momentum plays and I tend to favor the energy sector much more heavily. Retail investors are really just along for the drive, though sometimes we can manage to get into the passenger seat. Unfortunately with options we could end up in the passenger seat, or even in the trunk. It's much more of a guessing game. Obviously the quick get out of plays long before options expiration date, but that is much more time consuming. I prefer get rich slow to get rich quick, because it actually has worked for me.

     

    Good news? In the fast moving technology sector, that gets drowned out quickly. At this point, until BB10 devices actually launch, there is not much that would move shares. Even with the QNX division generating revenues from GM and Chrysler, while adding on Nissan, Toyota, and Honda, along with Audi, BMW, and Porsche, those details are now just a footnote. Much like investors in Pfizer just look at Viagra sales, anyone interested in RIMM only wants news about BlackBerry.

     

    The trick for those along for the ride with options is to guess if the driver takes shares to 6.00 or lower, or decides to do a U-turn and squeeze the passengers. All it would take is one prominent analyst changing their opinion. Much too volatile with this level of really high short interest. Those volume spikes for a few days were due to options activity. It would not surprise me if program trading was part of that too.
    18 Jul 2012, 02:14 AM Reply Like
  • Herr Hansa
    , contributor
    Comments (3130) | Send Message
     
    Just to add to this, I indirectly shorted the EUR for about two to three months, and managed a 25% gain on that play. I felt fairly good to get out of that when I did at a nice profit. I know a few people who held on longer and did not do quite as well. Timing is a series issue when trying to make shorter term moves. It's like catching knives being thrown at you.
    18 Jul 2012, 02:17 AM Reply Like
  • Ronin.
    , contributor
    Comments (1556) | Send Message
     
    I enjoy the challenge, and things have gone well for the most part...although I have taken a ride in the trunk a couple of times before, lol...

     

    I find the energy sector more difficult to navigate, so I suppose it goes to show that we all have our own methods and vehicles. I used to trade stocks daily, but gradually moved to options. Never did Forex trades before. Eventually, I will take the round trip and transition back to being more conservative with stocks...maybe in a couple more years...

     

    Always appreciate your thoughts and feedback Herr...good luck with your trades!
    18 Jul 2012, 02:41 AM Reply Like
  • Daniel Jackson
    , contributor
    Comments (20) | Send Message
     
    It will be years before this is resolved. Standard practice.
    19 Jul 2012, 11:03 PM Reply Like
  • galaxy travels inc.
    , contributor
    Comments (342) | Send Message
     
    due to the state of affairs the co. rimm is in they may expedite
    19 Jul 2012, 11:59 PM Reply Like
  • Daniel Jackson
    , contributor
    Comments (20) | Send Message
     
    That won't happen.
    20 Jul 2012, 08:08 AM Reply Like
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