Qualcomm's Patent Strategy Results in an $814.9 Million Payout to BlackBerry
Although John Chen of BlackBerry still sees Qualcomm as a partner, the chip maker and telecommunications company has just been given a preliminary order to pay BlackBerry $814,868,350 in royalty overpayments.
BlackBerry no longer manufactures or designs phones, rather the company focuses on marketing the BlackBerry security software program to major companies. According to David Kleidermacher at BlackBerry, the company's software is "the highest ranked solution for every use" when it comes to ensuring security.
So, what about Qualcomm's royalty overpayment? That's just an added bonus to BlackBerry's financial portfolio, which Engadget notes "made more cash from royalties than phones."
Last quarter, BlackBerry managed to make $286 million in revenue, so Qualcomm's payout is more than what BlackBerry should expect to make in half a year, giving the now software security company plenty of time to sit back and relax for the next few months.
In 2016, BlackBerry began a dispute with Qualcomm over royalty payments. The security software company claimed Qualcomm's agreement "to cap certain royalties applied to payments made by BlackBerry under a license agreement between the parties" should apply to a licensing deal for BlackBerry device sales between 2010 and 2015.
The final order will be issued after a hearing on May 30. Qualcomm noted in a company press release that they do not "agree with the decision," but since it is an arbitration decision, Qualcomm is bound to the order without appeal.
Despite the large payout, John Chen, Executive Chairman and CEO of BlackBerry, still believes in maintaining a relationship with Qualcomm:
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.
Qualcomm is currently facing a number of lawsuits over its aggressive patent strategy that many have called anti-competitive. Apple recently claimed the company overcharged for Qualcomm parts. The Federal Trade Commission also filed an antitrust suit against Qualcomm with almost identical reasons to Apple's. One thing's for sure, though: BlackBerry's win sure isn't helping the major telecommunications giant look good in the face of all this trouble.