BlackBerry has won a significant royalties award from Qualcomm. The Canadian firm’s shares were halted briefly in premarket trading ahead of the release of this news.
BlackBerry wins a $814.9 million refund from Qualcomm
The smartphone maker turned software company said a judge awarded it $814.9 million in royalty overpayments made to Qualcomm. A final hearing on the case is scheduled for May 30, and at that time, the final award will be made, including interest and “reasonable attorneys’ fees.”
The two companies agreed on April 20, 2016 to begin arbitration in a dispute about whether the chip maker’s agreement to cap some royalty payments applied to payments BlackBerry made under the terms of a licensing deal between them. In spite of the dispute, the Canadian company’s management said they will continue to work with the chip maker, particularly on automotive security products and integrated circuits for specific applications.
“BlackBerry and Qualcomm have a longstanding relationship and continue to be valued technology partners,” BlackBerry Executive Chairman and Chief Executive Officer John Chen said in a statement. “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 increases cash position
For a company like BlackBerry, a refund of $815 million amounts to quite a big deal, as its cash stood at $1.7 billion as of its last earnings report. As a result, that refund boosts its cash position by about half.
Shares of the Canadian firm surged in premarket trades, climbing by as much as 14.94% to $8.85 on the NASDAQ, while Qualcomm shares edged lower by as much as 0.9% to $54.85 in the premarket hours.
There’s also another dispute about royalty payments going on between Qualcomm and Apple right now. The iPhone maker sued the chip maker earlier this year, arguing that it was “charging royalties for technologies they have nothing to do with” and “withholding nearly $1 billion in payments.” Apple alleged that Qualcomm was retaliating for being willing to work with law enforcement agencies that were investigating it.