US chipmaker Qualcomm to pay $815M to Blackberry

By Barry Eitel

SAN FRANCISCO (AA) – Microchip manufacturer Qualcomm announced Wednesday it would pay $815 million to Blackberry for overpayment of royalties between 2010 and 2015.

The out of court agreement is part of a binding arbitration agreement.

Canada based Blackberry argued it paid royalties in advance to Qualcomm for patents and smartphone parts. Blackberry said there was supposed to be a cap on royalty payments that was never applied, while Qualcomm maintained payments from Blackberry were non-refundable.

"BlackBerry and Qualcomm have a longstanding relationship and continue to be valued technology partners," said John Chen, Blackberry CEO, in an announcement. "We are pleased the arbitration panel ruled in our favor and look forward to collaborating with Qualcomm in security for [microchips] and solutions for the automotive industry."

Qualcomm said it did not agree with the decision but the arbitration agreement cannot be challenged.

“The arbitration decision was limited to prepayment provisions unique to BlackBerry's license agreement with Qualcomm and has no impact on agreements with any other licensee,” Qualcomm said in a statement.

Qualcomm will also have to pay interest and attorney fees on top of the repayment. The final sum will be announced May 30.

The chipmaker finds itself the subject of an escalating legal quagmire around the globe. Apple is suing Qualcomm in three countries and charging that it overcharged for its patents. The Federal Trade Commission is also investigating the San Diego company for claims its licensing agreements involve anti-competitive practices.

Qualcomm’s licensing business bring in most of the company’s profits but that could easily change if it keeps paying out millions in lawsuits.

Shares of Blackberry jumped nearly 16 percent Wednesday amid the news to close at $8.93 per share. Qualcomm dipped more than 3 percent to close at $53.39.