The wave of litigation in the mobile e-mail space continued last week as Visto Corp. filed a patent-infringement lawsuit against Microsoft Corp.
Visto claims the software giant violated three patents relating to wireless synchronization, managing and securing data between servers and handheld devices. The suit, filed in the United States District Court for the Eastern District of Texas, seeks unspecified monetary damages and a permanent injunction to stop the alleged infringement.
The move is in response to Microsoft’s plans to introduce a new mobile push e-mail product early next year.
“Windows Mobile 5.0 is an infringement of Visto’s intellectual property of a technology that our firm created, patented and successfully sells on the market today,” said Brian Bogosian, Visto’s chief executive officer. “Their announcement to move into our market without any regard to our patented intellectual property was what motivated” the lawsuit.
Visto has licensed its technology for white-label e-mail services to carriers including Cingular Wireless L.L.C., Sprint Nextel Corp. and Vodafone Group plc. The start-up closed a $70 million round of financing in November, and has raised at least $140 million-some say as much as $200 million-since its founding nine years ago.
Microsoft declined to comment, saying it hasn’t completely reviewed and investigated the complaint. “In the meantime, however, we wish to underscore that Microsoft stands behind its products and respects the intellectual property rights of others,” the company said in a prepared statement.
Neither company is a stranger to litigation. Visto is engaged in patent-infringement lawsuits with competitor Seven and its subsidiary Smartner. Meanwhile, Microsoft has shelled out more than $1 billion over the last three years to settle patent-infringement disputes, often fighting two dozen or more companies at a time.
“Microsoft has a long and sordid history when it comes to competing in the marketplace,” said Visto. “Courts around the world have found against them time and again.”
Bogosian said he hasn’t approached Microsoft to discuss the matter or negotiate a settlement, but said Microsoft has been familiar with Visto’s technology “for several years.” The companies collaborated earlier this year on an effort to bring Visto’s offering to devices running Windows Mobile 5.0.
Visto’s announcement came just hours after the company struck a deal with NTP Inc., which is embroiled in a high-profile legal scrap of its own with Research in Motion Ltd. NTP took an undisclosed equity stake in Visto, which licensed NTP’s patents. NTP has also licensed its offerings to Good Technology Inc. and Nokia Corp., which has since acquired wireless e-mail provider Intellisync Corp. for $430 million. RIM has been dealt a series of blows in its battle with NTP and could be forced to shut down its service to U.S. subscribers if it can’t reach a settlement. The BlackBerry maker had come to terms with NTP earlier this year, but the $450 million deal collapsed; analysts say a new settlement could cost RIM $1 billion or more.
Any figure RIM and NTP settle on could set a precedent for the industry, and could weigh heavily in how the Visto/Microsoft case progresses. Bogosian last week took a shot at RIM’s failure to license NTP patents, saying “I think it’s fair to say that at the end of the day we will have paid less than $450 million for that right in partnership with (NTP).”
While the judge in the case may be days away from enforcing an injunction that would force RIM’s hand, the company is holding out hope that the U.S. Patent and Trademark Office fully invalidates the NTP patents in question. The USPTO has already called five of the patents into question, and last week the agency rejected one of the patents for the second time. But the court continues to move forward with the case, saying that any final word from the USPTO could be months or years away.
Meanwhile, Visto and competitors including Good Technology, Seven and others are hastily working to capitalize on RIM’s woes. Fears that RIM’s service may be shut off is taking a toll on the market’s dominant player, according to Yankee Group analyst Eugene Signorini, and smaller players are promoting their wares as a dependable alternative.
“I think there are a lot of (providers) looking at RIM’s problem as an opportunity,” said Signorini, Yankee Group’s director of enterprise solutions for wireless and mobile. “They’re trying to use this as a window of opportunity to show (they) have capabilities in wireless e-mail as well.”
While Bogosian downplayed the fact that Visto’s suit against Microsoft and its partnership with NTP were announced on the same day, the two developments may be part of a larger offensive, Signorini said. Visto can approach potential customers with a service that isn’t in danger of being shut down-unlike RIM’s service-while at the same time gaining the publicity that comes with a lawsuit against the world’s biggest name in software.
“I think it’s all kind of related,” the Yankee Group analyst opined. “I think it’s kind of an intellectual-property land-grab. It’s not only about market share and customers.”
