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The thumbs of nearly 3.2 million BlackBerry users in the United States can continue tapping
out those wireless e-mail messages without fear of interruption.
Just days before a judge was expected to issue an injunction shutting the
popular e-mail service, the patent holder, NTP, dropped its infringement
lawsuit against the device maker, Research in Motion, in exchange for $612.5
million.
The announcement followed three days of negotiations as well as several
setbacks for NTP at the United States Patent and Trademark Office.
R.I.M.'s decision to settle was immediately welcomed by customers and
investors; its shares rose as much as 19 percent, to $85.40, in after-hours
trading. But R.I.M.'s executives seemed less enthusiastic.
"No question, we took one for the team here," R.I.M.'s chairman
and co-chief executive, Jim Balsillie, said during a conference call. He added
that it was "not a good feeling to write this kind of check."
If the injunction had been imposed, the best case for R.I.M.'s customers
would have been the installation of alternative e-mail software that, according
to R.I.M., would have worked around NTP's patent claims. But the process would
have been costly, time-consuming and, R.I.M.'s assertions aside, still clouded
by legal questions.
"There's been a collective sigh of relief," said Ellen Dailey, an
analyst with Forrester Research. "R.I.M. knew that by
not settling they were going to put tremendous pressure on their
customers."
John Sicher, the publisher and editor of Beverage Digest, said he had been
looking for something to replace the BlackBerry. "I am very relieved and
pleased that I can now stop my search for alternatives," said Mr. Sicher,
a BlackBerry user for about three years.
Large corporate BlackBerry users were also happy. "It was going to be a
nightmare because we have 3,000 BlackBerry users," a spokeswoman for United Parcel Service, Donna Barrett, said.
The deal was brokered during three days of talks at a Manhattan office of Citigroup, NTP's banker. While Friday's settlement is
higher than a $450 million deal that the companies attempted a year ago, it is
well below analyst estimates that in some cases topped $1 billion.
Susan Kalla at Caris & Company, who predicted an amount more in line
with Friday's figure, praised R.I.M.'s decision to settle the case, which dates
back to November 2001.
The settlement was announced a week after Judge James R. Spencer of Federal District Court
in Richmond, VA,
heard a request from NTP for an order cutting off service to all BlackBerry
users in the United States
except for government and emergency account holders. A jury found in 2002 that
R.I.M. had infringed five NTP patents. All appeals of that decision failed.
At the hearing, Judge Spencer chided the companies for not being able to
settle the dispute.
"Judge Spencer's guidance last Friday was very helpful," James
Wallace, a lawyer for NTP, wrote in an e-mail message when asked what spurred
the settlement.
Early this week, the prospects for a deal looked dim. On Monday, the
companies issued barbed e-mail messages attacking each other's positions. But
people close to the negotiations said that two executives with Citigroup Global
Markets, Joseph Mooney and Jerry Cincotta, persuaded R.I.M. to meet with them
on Wednesday.
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AT&T Is Said to Be Near Deal for BellSouth
AT&T Corp. is planning to acquire BellSouth Corp., according to several people
familiar with the negotiations who asked not to be identified because of the
sensitivity of the talks.
A merger of two of the four remaining Bell
phone companies would represent a huge step toward recreating the monopoly that
existed in the phone business before the old AT&T was broken up in 1984.
The companies are expected to announce a deal as early as Monday.
AT&T is expected to pay about $65 billion for BellSouth, the country's
third largest phone company, which operates in a nine-state region in the
Southeast. The price represents a 25 percent to 30 percent premium for
BellSouth shareholders.
The combined company would have more than $125 billion in sales, 70 million
local-line phone customers and nearly 10 million broadband subscribers.
Spokesmen for AT&T and BellSouth declined to comment.
A deal between AT&T, formerly known as SBC Communications, and BellSouth has been
talked about for months. Together, the companies own Cingular Wireless, the
country's largest cellphone carrier, and they jointly own Yellowpages.com, an online
directory business.
In November, SBC became the country's largest phone company when it acquired
AT&T and took its name. BellSouth has largely avoided mergers and
acquisitions in recent years.
Any deal would have to be approved by regulators. That process would most
likely take about one year to complete.
Though the combined company would dwarf its next nearest competitor, Verizon Communications Inc., regulators have
shown growing tolerance in recent years for ever-larger mergers. In addition to
SBC's purchase of AT&T, Verizon beat out Qwest Communications for control of MCI Inc. in a protracted fight last year.
Regulators approved both deals with relatively few restrictions attached,
despite growing concerns among consumer groups and independent phone companies
that competition is being stifled.
A deal between AT&T and BellSouth could pressure Verizon to consider
buying Qwest, the last of the four big Bell
companies.
"We
learn more by looking for the answer to a question and not finding it than we
do from learning the answer itself. "
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