BlackBerry’s $815 Million Arbitration Win Won’t Solve All Its Problems

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BlackBerry Ltd. (NASDAQ: BBRY) announced Wednesday morning that the company had won a $814.9 million judgment in an arbitration ruling related to overpayment of royalties to Qualcomm Corp. (NASDAQ: QCOM). The interim decision will be finalized following a May 30 hearing to award interest and attorney’s fees.

In its announcement, BlackBerry said it had agreed last April to arbitration in the dispute over whether Qualcomm’s agreement to cap certain royalties applied to payments made by BlackBerry under a license agreement between the parties.

Qualcomm earns much of its profit from royalty payments from all mobile device makers because it owns a number of patents that cover basic mobile technology. The dispute with BlackBerry is unique, according to Qualcomm, and will have no effect on any of its other licensing agreements. Qualcomm also noted that the arbitration panel’s ruling is not appealable.

BlackBerry CEO John Chen said:

BlackBerry and Qualcomm have a longstanding relationship and continue to be valued technology partners. We are pleased the arbitration panel ruled in our favor and look forward to collaborating with Qualcomm in security for ASICs and solutions for the automotive industry.

BlackBerry has shed its mobile hardware business and now focuses on enterprise software development. The Canadian firm does not face an easy path there, however, going up against competitors like Oracle and Microsoft.

For the moment though, BlackBerry is seeing a solid bump in its share price. The stock traded up more than 18% in the first half-hour of trading Tuesday morning to $9.10, in a 52-week range of $6.23 to $9.19, a new high posted this morning. The 12-month consensus price target is $7.90.