By Sophia Pearson and Rebecca Barr
May 1 (Bloomberg) -- Research In Motion Ltd. was sued by Visto Corp. for patent infringement, less than two months after settling a similar lawsuit that threatened to shut down the BlackBerry e-mail service in the U.S.
The BlackBerry infringes four patents on software for wireless e-mail, closely held Visto claims in a lawsuit filed April 28 in U.S. District Court in Marshall, Texas. Visto, based in Redwood Shores, California, asked a judge to stop Research In Motion's use of the technology and award unspecified damages.
Visto sued the same day that a Texas jury awarded it $3.6 million on infringement claims against Seven Networks Inc., a software maker based in Redwood City, California. Research In Motion, based in Waterloo, Ontario, paid $612.5 million in March to end a four-year legal battle with closely held NTP Inc.
``RIM settled once. Visto must be thinking, `why wouldn't they settle again?''' said Benjamin Bollin, an FTN Mideast analyst in Boston who rates Research In Motion shares ``buy'' and says he doesn't own them.
Research In Motion said it will challenge the validity of Visto's patents. The claims against Seven Networks cover a system that differs from the BlackBerry, the most popular handheld e-mail device in the U.S. with about 3.2 million users, Research In Motion said.
Visto Challenge
``RIM believes it does not infringe Visto's patents and will file its legal response in due course,'' the company said. ``RIM will now also consider asserting its own patents against Visto.''
Shares of Research In Motion fell $3.60, or 4.7 percent, to $73.03 at 5:20 p.m. in Nasdaq Stock Market trading. They have risen 11 percent this year, valuing the company at $13.5 billion.
``They're facing a reality that a number of successful companies see,'' said Brian Ferguson, a lawyer with McDermott Will & Emery in Washington. ``As your product starts to make money, you become more of a target for patent-infringement cases.''
NTP, based in Arlington, Virginia, owns a stake in Visto, whose mobile e-mail software is used in more than 70 devices from providers including Cingular Wireless LLC, Sprint Nextel Corp. and Vodafone Group Plc.
The Texas decision validated Visto's claim that its software ``serves as the basis for this industry's birth,'' Chairman Brian Bogosian said in a statement. The U.S. Patent and Trademark Office recently upheld one of the patents cited in the Research In Motion suit, he said.
No Shutdown
``We're asking for our rights to be respected,'' Daniel Mendez, co-founder of Visto, said today in a telephone interview. ``I wouldn't go as far as to say we want to see them shut down.''
Visto has sued other companies for patent infringement. It accused Microsoft Corp., the world's biggest software maker, of infringing three patents in December. Visto sued Good Technology Inc. in January, claiming that products and services used in Palm Inc.'s Treo devices infringed four patents.
Ferguson says the handheld-device industry will see more lawsuits as ``these products become more ubiquitous.''
``Investors thought the worst was behind them,'' Bollin said. ``Now there's a competitor in the marketplace that has won a suit and they are now going after RIM.''
The case is Visto Corp. v. Research in Motion Ltd., 06CV181, U.S. District Court for the Eastern District of Texas (Marshall).
To contact the reporter on this story: Sophia Pearson in Wilmington, Delaware, at 7613 or spearson3@bloomberg.net Rebecca Barr in New York at rbarr1@bloomberg.net
Last Updated: May 1, 2006 17:53 EDT
HOME
