RIM, Dolby friends again

by Gaurav Kheterpal on September 13, 2011

In June, Dolby Laboratories filed patent infringement lawsuits in the U.S. and Germany against the company for patent infringement. The lawsuits sought recovery of financial damages and injunctions to halt sales of “many RIM products” that Dolby claims infringes its patents.

As I mentioned back then, the Dolby lawsuit couldn’t have been more ill-timed for RIM as the Canadian smartphone giant was forced to issue a dramatically scaled-back profit forecast, sending its shares into a free-fall mode. Legal trouble is the last thing RIM needs on the path to recovery.

As expected, the Waterloo giant has agreed to pay patent royalties to San Francisco’s Dolby Laboratories to end a legal battle over technology to improve audio quality. As a result, all cases have been dismissed based on agreement between the parties.

In its lawsuits, Dolby alleged that RIM violated patents for using “highly efficient digital audio compression technologies which allow manufacturers and consumers to provide and enjoy high quality audio while using extremely limited amounts of transmission and/or storage space for such audio.” The company claimed that RIM uses this patented technology in BlackBerry smartphones as well as the PlayBook tablet.  The company filed lawsuits in US (US District Court for the Northern District of California) and Germany (District Court of Mannheim in Mannheim, Germany) after failing to reach an agreement with RIM.

“We are pleased to welcome RIM into Dolby’s family of mobile technology licensees,” Dolby executive vice president and general counsel Andy Sherman said in a statement. “We believe in and will continue to protect the value of our intellectual property.”

As per the settlement, RIM has now licensed Dolby’s High Efficiency Advanced Audio Coding that’s used for playback of digital music and high-scale audio compression. In fact, licensing agreements form a giant share of Dolby’s revenue. The company already has licensing deals with Apple, Samsung, HTC, LG, and Nokia. RIM has now signed a license agreement with Via Licensing Corp., a company designated to handle Dolby patents.

Though Dolby is best known as the inventor of surround sound, it’s increasing under pressure from lesser-known rivals such as Beats Audio. In fact, Dolby suffered a major setback when Microsoft announced that it would not be licensing Dolby’s playback technology in Windows 8. To make the audio landscape even more interesting, HTC invested $300 million in Beats Audio and announced that it will launch a line of devices integrated with Beats sound innovations would be launched this fall.

None the less, the settlement is good news for RIM, Dolby as well as the lawsuit-savvy tech industry in general. What do you think?

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Written by: Gaurav Kheterpal. www.digitcom.ca. Follow TheTelecomBlog.comby: RSS,TwitterFacebook, or YouTube.

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