In 2008, Blackberry hit the height of its popularity. Prior to the widespread use of iPhones and Android-based smartphones, Blackberry owned the market share. Looking back at Blackberry’s stock, in 2008, a single share cost as much as $140. In the past 10+ years, however, Blackberry’s stock plummeted to about $5 – $10 per share. As such, Blackberry had to adopt a new strategy to regain its former prominence. One tactic employed by Blackberry included asserting its patent portfolio against major competitors, including Facebook.

Blackberry Builds Patent Portfolio

A quick Google Patents search reveals over 11,000 granted US patents assigned to Blackberry, Ltd. While Blackberry may have lost market share over the past decade, the company still placed importance on its patent portfolio. The focus on intellectual property protection gave Blackberry options against competitors; this lead to a series of legal disputes against Facebook over the past few years. In a typical fashion, each party attacked each other – Blackberry asserted patent infringement, while Facebook asserted patent invalidity.

Both sides experienced wins and suffered losses. For example, a district court invalidated four Blackberry patents in 2019; the USPTO similarly invalidated patents through Inter Partes Review proceedings as well. However, Blackberry did not give up, noting the importance of its patent portfolio and the changing landscape for software patents.

Federal Circuit Appears Willing to Side Against Facebook

In late 2020, Blackberry appealed the district court invalidity decision to the Federal Circuit. During oral arguments, the Federal Circuit indicated that it might overturn the district court. Specifically, the Court noted the narrowness of the district court’s claim interpretation; in addition, the Court appeared to criticize the district court’s failure to properly consider the specification.

While no result appeared certain, Facebook heard enough to reconsider its situation, and the parties decided to settle their disputes. The terms of the agreement remain confidential, but the point is clear. Without its patent portfolio, Blackberry would have no way to protect its inventions. Instead, Blackberry kept its options open, and its share price shot up by 65% over the past week, in part because of the settlement.

Why can a patent be invalidated after it issues?

The US government does not want to allow invalid patents to exists. As such, methods exist to challenge an issued patent, including through an IPR.

Why did Facebook settle the dispute with Blackberry

Without being privy to the confidential terms of the agreement, Facebook likely did not want to face a potential ruling that it infringed Blackberry’s patent portfolio. As such, it makes more financial sense to settle the case and cut losses now.