Investors bemoaned Research In Motion Ltd.’s further legal losses resulting from its patent dispute with NTP Inc., sending the company’s stock down about 11 percent to $17.80 per share.
The declines follow a Virginia court’s ruling that increases the amount of damages RIM must pay NTP following a verdict against RIM. The court ruled that compensatory damages be increased by 50 percent and that RIM pay $5 million of NTP’s attorney fees. The court also upped the royalty rate RIM must pay NTP from 5.7 percent to 8.55 percent. RIM said it would record an incremental accounting provision of between $13.75 million and $14.25 million to account for the increased damage charges. RIM said it will pay out almost $59 million this year for the litigation.
RIM again reiterated that the case can be appealed.
However, RIM still faces a possible injunction, which would force the company to stop sales in the United States. The court could rule on the injunction in the coming days and weeks.
Research firm BMO Nesbitt Burns said it lowered its rating on RIM to Market Perform from Outperform due to the company’s lingering legal troubles, but it is maintaining its target share price of $18.
“We believe that it is prudent (to) take profits on RIM now given consideration for the heightened risk profile created by a rising Canadian dollar and recent NTP developments,” the firm wrote in a research note.
Separately, RIM said StarHub will begin selling the company’s BlackBerry corporate wireless access products in Singapore.
