Dolby Labs has won two patent lawsuits against Research in Motion (RIM) for infringement of proprietary audio technologies. As part of the standard terms won by Dolby, RIM will now have to pay licensing fees to the company.
Dolby Labs is an American public company that was originally founded in the United Kingdom, and it specializes in audio encoding, audio compression and noise reduction technologies. On the other hand, RIM is a Canadian telecommunication device corporation that is well renowned for producing the Blackberry smartphone.
The financial details of the licensing agreement were not disclosed, but Dolby had previously estimated that they would be owed about $15 million in back royalties plus interest. Dolby filed suit against RIM in Germany and the US this year over patents on High Efficiency Advanced Audio Coding, a technology that enables high quality playback of compressed audio files in digital format.
This standard is widely used in music players, smartphones, tablets, PCs and other mobile devices. The lawsuit from Dolby alleged that RIM was using the technology without a license in its Playbook and BlackBerry devices.
The costs of the licensing agreement between RIM and Dolby are small in comparison to the impact of RIM’s patent loss against NTP several years back. RIM is currently engaged in patent spats with a number of other tech companies such as Kodak, which may end up selling some of their patents as a possible resolution. Via Licensing, a Dolby subsidiary in charge of managing various Dolby technologies, is also working with NFC, WiMAX and LTE patent issues.
The next quarterly results from RIM will show the full impact of the licensing agreement with Dolby on the company’s outlook for their financial future. The standing question is whether RIM is profitable enough today to comfortably pay out more licensing fees or whether it will have a materially adverse impact on their financial outlook.
