April 12 (UPI) -- BlackBerry Ltd. was awarded $814.9 million from Qualcomm Inc., ending a dispute over royalty payments.
Both sides agreed to a binding decision by an arbitration panel and the award was announced Wednesday by Qualcomm and BlackBerry. A final award that includes interest and attorneys' fees will be issued after a hearing on May 30.
BlackBerry shares climbed 16 percent to $8.94 at 1:30 p.m. in New York on Nasdaq. Qualcomm's stock price declined 3.1 percent to $53.64 on Nasdaq.
The refund, which is about 20 percent of its current market cap, will allow the Canadian-based company to shift from its failing cellphone business to making software.
BlackBerry had $286 million in revenue last quarter, according to its financial filing on March 31.
"With BlackBerry planning to invest for growth in its software businesses, the surprising arbitration award and $815 million in cash from Qualcomm will bolster BlackBerry's balance sheet and increase the likelihood of acquisitions to augment growth," Canaccord Genuity technology analyst Michael Walkley wrote Wednesday in a report obtained by Bloomberg. He raised his BlackBerry price target to $9.50 from $8.
In 2010, BlackBerry signed a non-refundable agreement with Qualcomm to cover royalty payments through 2015. It shipped far fewer phones than it expected, leading it to seek a refund on some of the payments.
"While Qualcomm does not agree with the decision, it is binding and not appealable," Qualcomm said in a statement. "The arbitration decision was limited to prepayment provisions unique to BlackBerry's license agreement with Qualcomm and has no impact on agreements with any other licensee."
Qualcomm, based in San Diego, owns patents that cover the fundamentals of cellphone technology and receives a portion of the selling price of handsets from phone makers, regardless of whether the chips are used.
The chipmaker is the biggest producer of semiconductors that run smartphones
Other lawsuits and regulatory actions have targeted Qualcomm's licensing business.
Apple has accused Qualcomm of illegally trying to control the market for phone components. Qualcomm in a counter suit last week said Apple wants to pay lower fees by ending the chipmaker's dominance. Apple is Qualcomm's biggest customer.