BlackBerry-maker Research In Motion Ltd. (RIMM) finally has something to cheer for as the Canadian company received favorable ruling from the U.S. District Court for a patent infringement case involving New Jersey-based technology firm Mformation Technologies.
It all began in 2008, when Mformation Technologies, known for providing mobile device management software solutions to its clients, took Research In Motion to U.S. District Court in Northern California for infringing its patents.
Mformation asserted that Research In Motion used its unlicensed technology in BlackBerry Enterprise Server, which the Waterloo, Ontario-based handset manufacturer had picked up during a meeting related to this technology with Mformation.
Research In Motion was found guilty by the court in July and was asked to pay a royalty of $8 for each of its 18.4 million units, hence amounting to a total of $147.2 million.
However, lack of proper evidence against Research In Motion has earned the company an overturning of last month’s verdict by the U.S. District Court.
Recently, Research In Motion Ltd. reported poor financial results for the first quarter of fiscal 2013 where both its top and bottom lines missed the Zacks Consensus Estimate. Moreover, its smartphone and Playbook tablet device sales drastically fell by 40.9% and 48%, respectively as compared with the corresponding quarter last year.
Stiff competition from Apple Inc’.s (AAPL) iPhones and Google Inc’.s (GOOG) Android-based devices has resulted in grim results. The company has also delayed the launch of its upcoming BlackBerry 10-based smartphones, and followed it with a job cut of at least 5,000 employees. Taking into consideration all these headwinds, we believe the company’s future looks bleak.
Research In Motion shares currently retain a Zacks #4 Rank, which translates into a short-term Sell rating. Longer-term, we are maintaining our Neutral recommendation on the stock.
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