SAN DIEGO _ Qualcomm said Wednesday it has been ordered to pay smartphone maker BlackBerry $814.9 million in an arbitration dispute over patent royalties.
The San Diego wireless giant said the payment was ordered after both companies entered binding arbitration in a contract disagreement over Qualcomm's royalty caps.
The payment comes as Qualcomm's patent licensing business is increasingly under attack from government regulators and smartphone makers.
Qualcomm has been fined more than $850 million by South Korea's anti-monopoly regulator, which also is demanding changes in the way the company licenses patents. Qualcomm has appealed to the Seoul High Court.
The U.S. Federal Trade Commission and Apple also have sued Qualcomm over patent licenses. Both cases are pending. Investigations are under way in Taiwan and elsewhere.
While Qualcomm earns the bulk of its revenue from selling chips that power smartphones, it books most of its profit by licensing its portfolio of thousands of cellular patents. The company's patented technology is found in nearly all 3G and 4G smartphones.
Canaccord Genuity Analyst Mike Walkley called the arbitration decision "surprising" in a research note, adding that it will help bolster BlackBerry's balance sheet as it pivots to focusing on software for future growth.
Qualcomm patent licenses agreements vary with each smartphone maker. A few make bulk prepayments of royalties in advance of device sales.
According the Qualcomm, the BlackBerry dispute centered on whether Qualcomm's per device royalty cap program applied to BlackBerry's "non-refundable" prepayments of royalties on sales of BlackBerry subscription devices from 2010 through the end of 2015.
The arbitration panel's decision is binding and can't be appealed. Qualcomm said the ruling has no impact on agreements with other device makers.
Qualcomm's shares dipped $1.23 to $54.13 in early trading Wednesday morning on the Nasdaq exchange.
