NEW YORK (CNN/Money) - Should investors view the more than 7 percent drubbing in Research in Motion's stock on Tuesday as a buying opportunity?

After all, shares in the company behind the BlackBerry e-mail service had surged nearly 75 percent since March 11 on reports of increasing subscriber growth, new product announcements and several analyst upgrades.

Perhaps Tuesday's dip is just a small bump in a straight shot up -- or, more likely, it is a sign of the very real risks facing RIM.

The reason for RIM's drop on Tuesday was an unfavorable development late Friday in a patent infringement case against RIM.

Here's the quick background. A private holding company called NTP sued RIM in 2001, alleging that BlackBerry infringes on several wireless communications patents filed by one of NTP's owners.

NTP demanded damages as well as an injunction that would force RIM to stop selling the BlackBerry. In November of last year, a jury found in NTP's favor and ordered RIM to pay NTP $23 million in damages. RIM is appealing the verdict.

But in a post-judgment ruling on Friday, a judge ruled that RIM would have to pay an additional $8.9 million in damages and 80 percent of NTP's legal costs, which amounts to another $5 million. What's more, the judge also increased the post-judgment damages that RIM would have to pay NTP, namely a royalty on all future BlackBerry sales.

That ruling could mean that RIM will have to pay $7 million to $9 million to NTP per quarter if it loses the appeal, according to a research note by RBC Capital Markets analyst T. Michael Walkley.

The courtroom battle has already come at great cost to RIM. The company had nearly $40 million in legal expenses during its latest fiscal year, which ended in February. That amounted to 13 percent of revenues. RIM had no significant legal expenses in the fiscal year before last.

Friday's ruling is a double whammy for RIM, which is in a legal battle with another competitor, privately held Good Technology. J.P. Morgan analyst Paul Coster downgraded RIM on Tuesday and in a report he said that the NTP decision would bolster Good Technology's patent-infringement case against RIM.

Last month, Good Technology announced a partnership with Dell Computer. Dell, which also has a partnership with RIM, will be using Good's GoodLink wireless e-mail technology on its servers.

This deal was viewed as a sign of a possibly deeper alliance between the two companies, including the possibility that Good's e-mail technology would be included in future versions of Dell's handheld devices. So if RIM is unable to beat Good in court, it will likely see more competition from Dell.

Even RIM's core business has problems. The company depends on its flagship BlackBerry device for 46 percent of sales. But such hardware has much lower profit margins than service revenue and licensing its software to other companies for use in other e-mail products.

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"I continue to be skeptical about RIM's long-term prospects," said James Faucette, an analyst with Pacific Crest Securities. "The market for specialized e-mail is ultimately too limited to reach substantial levels of profitability."

According to FirstCall, analysts expect RIM to lose 19 cents a share in fiscal 2004 (which ends in February). But these estimates are based on pro forma numbers, and not generally accepted accounting principles (GAAP), so actual losses will probably be higher.

That's why trying to come up with a valuation for RIM is not easy. But in his research note, Walkley said that Research in Motion's stock is fairly valued at $15, nearly 20 percent below its current price.

This price is based on 1.5 times Walkley's fiscal 2005 revenue estimate of $445 million, plus expected cash of about $490 million. And the valuation is generous, since Walkley said that most unprofitable wireless companies trade at less than 1 times revenue. At 1 times sales plus cash, RIM would be worth about $12.

In other words, this BlackBerry isn't ripe for picking.

Analysts quoted in this story do not own Research in Motion and their firms do not have investment banking relationships with the company.

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