BlackBerry Awarded $814.9 Million in Arbitration Against Qualcomm -- 2nd Update

By Imani Moise

BlackBerry Ltd. said Wednesday that it will receive a $814.9 million refund from Qualcomm Inc. after entering into binding arbitration to settle a licensing-agreement dispute.

The award is a big boost for BlackBerry: It amounts to nearly-two thirds of the revenue the firm generated in 2016 and put a charge into its stock early Wednesday, when shares climbed as much as 18%. It ends a yearlong dispute over whether Qualcomm's cap on royalty payments applied to an agreement it had with BlackBerry.

A final award including interest and attorneys' fees will be issued after a hearing next month.

"BlackBerry and Qualcomm have a longstanding relationship and continue to be valued technology partners," BlackBerry Chief Executive John Chen said.

Qualcomm said it doesn't agree with the decision, but it cannot be appealed. The company said the arbitration decision is limited to prepayment provisions unique to its license agreement with BlackBerry and has no impact on any other license.

Qualcomm, which has developed technology deemed essential to cellular communications, collects royalties on every mobile phone sold. It generally charges royalties for its intellectual property based on a percentage the average selling price of a device. The company has said its royalty rate can be as much as 5%, but reported its average royalty rate as 2.9% in its most recent fiscal year, as implied by its total royalty revenue and internal research on the number of devices shipped and their prices.

However, Qualcomm has also said that it caps the price basis on which it calculates royalties. It has not disclosed the dollar amount of the cap.

Qualcomm has come under fire from antitrust regulators in China, Europe, South Korea and the U.S. Earlier this year, Apple Inc. claimed Qualcomm abused its market position to impose costly terms on customers. Qualcomm has since fired back, defending its business model and seeking damages from Apple over withheld payments for technology used in iPhones.

Qualcomm shares recently traded 2.5% lower.

Ted Greenwald contributed to this article.

Write to Imani Moise at imani.moise@wsj.com

(END) Dow Jones Newswires

April 12, 2017 11:08 ET (15:08 GMT)

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