NTP goes after Palm

After dispensing with Research in Motion, NTP has picked the next target on which to bear the weight of its push messaging intellectual property: Palm. NTP has filed a federal lawsuit against Palm, saying the wireless e-mail software it uses in its popular Treo devices and other connected handhelds infringes upon NTP’s patents.

The market takes legal threats from NTP seriously, and it punished Palm shares during Monday trading on the NASDAQ, sending its stocking price down 7.6%. In March, RIM settled a similar lawsuit with NTP for $612.5 million. RIM is now in the clear, but the courtroom fight did more than cost it a settlement. The four-year fight led to falling investor and customer confidence, threatening not only its share prices but also new customer orders. The battle also opened the door for new competitors like Visto, Good Technology, Seven, Microsoft and Nokia, many of whom have seen gains in the mobile e-mail market during RIM’s trial. Palm was one of the companies to benefit from RIM’s legal woes as it positioned Treo as an alternative to RIM’s Blackberry platform.

NTP’s suit against Palm is over seven patents, which NTP claims are infringed upon by data communications software in Palm’s Treo, Tungsten and Palm-brand PDAs. NTP officials said Monday the company tried to negotiate a royalty agreement with Palm, but failed, claiming the lawsuit was a last resort to protect NTP’s intellectual property.

NTP’s legal assaults may not end with Palm either. Several other wireless e-mail providers have sought to insulate themselves from NTP by signing royalty agreements with the patent-holding firm, including Nokia—which entered the push e-mail space with its purchase of Intellisync last year—Good and Visto, but there are half a dozen other firms that have no such agreements with NTP in place, including industry heavyweight Microsoft. NTP also isn’t the only company filing mobile e-mail lawsuits. Visto has been filing its own patent infringement suits. It has challenged RIM, Seven, Good, Microsoft and Sproqit in court and won a $3.6 million judgment against Seven.