RIMM Extends Patent License

Research In Motion Limited ( ) , the maker of Blackberry, has extended the terms of its patent license agreement with wireless technology developer InterDigital Inc. ( IDCC - Snapshot Report ) . The deal is believed to boost Research In Motion’s patent portfolio ahead of the much awaited launch of its BB10-based smartphone.

Per the deal, the struggling handset manufacturer has extended its worldwide, non-exclusive, royalty bearing patent license deal for a multi-year period with InterDigital’s patent holding subsidiary. Additionally, they have modified the contract to some extent by adding patent license for the LTE and LTE-Advanced products. However, the terms and financial details of the deal are yet to be disclosed.

Recently, Research In Motion ended a long-standing patent related dispute with Nokia Corporation ( NOK - Analyst Report ) , whereby the former will make an upfront payment and will also continue to make payments to the Finish handset manufacturer for the use of its patents. It seems that Waterloo, Ontario-based Research In Motion doesn’t want to remain in any patent related dispute before the launch of BB10-based device.

The beleaguered handset manufacturer has been struggling for quite some time owing to an increasing competition, primarily from Apple Inc.’s ( AAPL - Analyst Report ) iPhone and from other smartphone manufacturers, which runs on Google Inc.’s ( GOOG - Analyst Report ) Android platform. The recent launch of Microsoft Corporation’s ( MSFT - Analyst Report ) Windows 8 platform has only aggravated the problem.

The Canadian company is betting on its new Blackberry 10 OS-based devices, which are slated to release in the first half of 2013. The new smartphone with advanced feature could be a potential game changer, provided it can attract attention of more consumers.

Research In Motion doesn’t have a lot of 4G enabled devices other than its Playbook tablet. With the increasing adaptation of 4G around the world, we believe this patent deal will aid the company to enrich its 4G enabled device count.

We maintain our long-term Neutral recommendation on Research In Motion. Currently, it holds a short-term Zacks # 3 Rank (Hold).