The patent dispute had threatened to end RIM's popular BlackBerry e-mail service to millions of users in the U.S. and has been the subject of a contentious, four-year patent battle between the two companies.
Under the terms of the settlement, which was announced late in the day, RIM will make a one-time payment to NTP. In return, NTP has granted RIM a license that enables RIM to continue its BlackBerry service.
"We are pleased to have reached an amicable settlement with RIM," said Donald E. Stout, NTP's co-founder. "We believe that the settlement is in the best interests of all parties, including the U.S. government and all other BlackBerry users in the United States. NTP is pleased that the issue has been resolved and looks forward to enhancing its businesses."
Government BlackBerry users had fretted that losing their service could cause them problems, and had asked a federal judge last week to be exempt from any order to shut down the service.
According to NTP, the deal covers all current NTP patents involved in the litigation as well as future NTP patents. "All of RIM's past and future products, services and technologies will be covered as well as all RIM customers and providers of RIM products and services, including wireless carriers, distributors, suppliers and ISV partners," NTP said in a statement. "The agreement permits RIM and its partners to sell its products, services and infrastructure completely free and clear of any claim by NTP...."
Despite the bitter legal fight, many analysts had expected a last-minute settlement, believing RIM wouldn't want to risk either a service shutdown or force their customers to download a software workaround.
"It's great to have moved beyond the legal battle," said John Halamka, CIO at CareGroup Healthcare System in Boston, which supports about 500 BlackBerry users, including doctors and nurses. "I only hope that this does not lead to more suits of this nature, since innovative companies could spend more time in the courts than on creating new products."
Halamka tried other technologies in the event RIM shut down service, but said BlackBerry was the most robust.
He sent his comments to Computerworld via his own BlackBerry.
In a separate earnings statement, RIM said it attracted 70,000 fewer new subscribers than expected during the quarter ending March 4, primarily due to "uncertainty surrounding the NTP litigation" causing corporate customers as well as consumers to defer BlackBerry purchases.
"While some uncertainty was anticipated in December, the overall impact was greater than previously anticipated," the Ontario-based company noted, likely giving impetus for a settlement.
Revenues were flat for the fourth quarter compared to the third, and less than expected: about $550 million to $560 million, compared to the $590 million to $620 million forecast earlier. Sales were sill higher than the $405 million from a year ago.
Final quarterly results are scheduled to be announced on April 6.
Just one week ago, U.S. District Judge James Spencer had expressed skepticism about RIM's argument that a BlackBerry shutdown would hobble critical public services and infrastructure. He noted that the company had told investors that a software work-around it had devised would avoid disruptions to users.
Spencer had also said at last week's hearing that there was no escaping that RIM had been found to be infringing on NTP's patents. Spencer went on to say that the two sides should have settled out of court.
Canada-based RIM has been locked in a court battle for more than four years with privately held NTP, which successfully sued RIM for infringing on its patents.
NTP last week had asked Spencer for an injunction against BlackBerry service in the U.S. with a 30-day grace period for users and the immediate imposition of $126 million in damages for past infringement.
RIM and NTP reached a tentative deal valued at $450 million last year, but that agreement fell apart, and analysts had estimated any new settlement could cost RIM $1 billion.
The small portable BlackBerry e-mail devices are used by more than 3 million U.S. subscribers, including government officials and lawmakers.
RIM has challenged the validity of NTP's patents in an administrative proceeding at the U.S. Patent and Trademark Office but the process is lengthy.
Computerworld's Matt Hamblen contributed to this report.