RealNetworks Loses Arbitration with VeriSign Over SMS Alliance

RealNetworks has announced that it has lost a legal action with VeriSign over an alliance between the two companies, and that contractual limitations on the financial penalties had been overturned. The alliance referred to VeriSign Metcalf Intercarrier SMS, an outsourced inter-carrier messaging solution for wireless carriers. Together with RealNetworks, it powers inter-carrier mobile messaging for eight of the top 10 wireless carriers in North America and other major operators throughout the world.

In a SEC filing, the company said that the an arbitration action had been under way, and that in May, the Arbitrator issued a ruling denying the Company's claims for relief and granting VeriSign's claims, including VeriSign's claim that the Company tortiously interfered with VeriSign's proposed sale of certain business units. Subsequent to that ruling, the Arbitrator has further ruled that the limitation of liability clause contained in the Alliance Agreement does not apply to the potential damages VeriSign incurred. In response, VeriSign has filed an amended statement of damages seeking a material amount in damages.

Real Networks confirmed that it intends to continue to defend itself vigorously with respect to this matter.

A hearing to address VeriSign's claimed damages is currently scheduled to begin next week (July 13th, 2009).

Posted to the site on 9th July 2009