Report: NTP offers RIM a deal at 5.7% of revenue

The new settlement also involves fixed lump sum payment, according to CNBC

NTP has offered Research in Motion (RIM) a new settlement deal that asks for 5.7% of RIM's future revenue from US BlackBerry sales, the Wall Street Journal reports, citing an unnamed source.

The two companies announced a US$450 million settlement deal earlier this year in their dispute over whether RIM's BlackBerry handhelds and wireless email system infringes upon patents held by NTP. However, that settlement collapsed in June, setting up court hearings that could lead to the reimposition of an injunction on sales of the BlackBerry in the US.

A RIM executive confirms that the companies have been in talks recently in front of a court-appointed mediator, but does not comment on the substance of those talks. NTP's lead counsel declines to comment on any talks between the two companies.

Television business news channel CNBC reports that NTP co-founder Don Stout received a settlement offer from RIM Thursday night, but that NTP considered it "unacceptable".

Representatives from NTP and RIM did not return calls seeking comment.

RIM's fiscal 2005 revenue was US$1.35 billion, US$914 million of which was garnered from US BlackBerry users, according to the company's fiscal 2005 annual report. If the 5.7% figure is accurate, NTP would have earned US$52.1 million during RIM's 2005 fiscal year, which ended on 26 February.

However, RIM's business is growing as the BlackBerry handhelds become a fixture among corporate executives. The US$450 million settlement announced in January was for a perpetual licence to NTP's patents, rather than an ongoing royalty. CNBC reports that the new settlement talks also involve a fixed lump-sum payment, in addition to the 5.7% royalty rate, citing their own unnamed source.

Few legal analysts believe RIM will risk letting the US District Court for the Eastern District of Virginia impose an injunction on BlackBerry sales that could shut down the service and a new settlement has been widely expected.

Investors pushed RIM's stock (RIMM) up US$3.38, or 5.56%, to close at US$64.13 on the Nasdaq stock market Friday, on reports of a possible settlement.

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