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Here’s How BlackBerry Plans to End Its Patent Dispute With This Google Android Phone Maker

October 12, 2017, 4:03 PM UTC

BlackBerry said a licensing deal it signed with low-end Android handset maker BLU Products will bring it recurring revenue, ending a legal dispute over patents that rival Google has asked the U.S. government to revoke.

BlackBerry did not disclose financial terms and its shares were little changed after the news, rising 0.5% in late Thursday morning Nasdaq trade.

BlackBerry (BBRY) filed two lawsuits against Miami-based BLU in June 2016, part of an effort by the Canadian company to generate revenue from its trove of technology patents.

Alphabet’s Google (GOOGL) responded to lawsuits against a maker of phones running its Android operating system by challenging six of the patents at the U.S. Patent and Trademark Office.

In late August and early September, a patent office appeal board said that Google had a “reasonable likelihood” of winning the invalidation of four patents in a full review.

The deal between BlackBerry and BLU was likely secured prior to a July 19 memorandum of understanding filed with the court hearing their patent dispute. The two firms have declined to disclose financial terms of that agreement.

BlackBerry Chief Executive Officer John Chen said on a Sept. 28 earnings call that his company had received revenue from BLU, but did not elaborate.

It was not clear if that payment was included in that quarter’s earnings, which beat analysts’ forecast on a jump in licensing fees that includes patent payouts and royalties on BlackBerry-branded devices and software sold by others.

Patent licensing deals are typically structured with an upfront payment to cover past sales and ongoing royalty payments tied to future sales.

Market intelligence company IDC estimates that BLU accounts for less than 1% of global smartphone market share.

BlackBerry said in its statement on Thursday that the completion of the BLU deal allows it to focus on other licensing targets in the mobile communications industry.

“Anytime you have royalty-bearing licenses, you are setting a market rate,” said David Pridham, chief executive of Dallas-based patent consulting firm Dominion Harbor Group, which recently analyzed BlackBerry’s patent portfolio on behalf of a group of handset manufacturers.

“Doing so with a smaller player will be helpful as BlackBerry turns its attention to larger market incumbents,” he said.

BlackBerry is also waging two other patent lawsuits, one involving Nokia Oyj’s mobile networking technology filed in February and another broadly targeting Avaya products that was filed in July 2016.