Visto Licenses NTP Patents

Wireless email provider Visto Corp., one of a handful of startups attempting to challenge BlackBerry-maker Research In Motion Ltd. (RIM) (Nasdaq: RIMM; Toronto: RIM), said today that it has signed a license agreement with NTP, which claims to hold key patents relating to mobile email systems.

Financial terms of the deal were not disclosed, but the license allows Visto access to NTP's full patent portfolio, and gives NTP an equity stake in Visto.

Today's agreement is expected to increase the pressure on RIM to settle with NTP. The two firms reached a $450 million settlement agreement earlier this year, but that deal fell into dispute and was invalidated two weeks ago by U.S. District Judge James R. Spencer. (See Users in Blackberry Jam.)

The patent conflict has raised the possibility that the BlackBerry email service could actually be shut down by a court-ordered injunction in the case. With today's deal, Visto becomes the third mobile email provider to sign licensing agreements with NTP. Nokia Corp. (NYSE: NOK) and mobile computing provider Good Technology have both licensed patents from NTP.

In a conference call with investors and press today, Good Technology Inc. president of worldwide sales and marketing Terrence Austin said that his company has seen a "tremendous uptick" in interest from BlackBerry customers seeking an alternative solution in case RIM loses the legal battle.

Alluding to RIM's legal troubles, Visto CEO Brian Bogosian said in a statement that the deal will ensure his company's technology will be a "viable alternative long after other players have seen their solutions silenced."

Reuters reported last week that NTP had rejected a new settlement offer from RIM, terming it "unacceptable," and that the two sides were not in further talks. Regardless of the outcome of the patent dispute, competitors like Visto and Good maintain that their open solution, based on multiple device manufacturers and industry standards, will inevitably win out over RIM's proprietary approach.

"RIM's strategy is fundamentally flawed," says Visto co-founder and senior vice-president Daniel Mendez. "They're doing things that are mutually exclusive, manufacturing devices and providing software, which by its nature ought to be independent of the devices and data sources."

While Good Technology aims directly at large enterprises with its branded GoodLink service, Visto employs a "white-label" approach, selling to operators who rebrand the service and provide it to customers.

While Judge Spencer's Nov. 30 ruling was seen by many observers as a significant boost for NTP in its effort to enforce its patents -- which have been termed invalid in preliminary rulings handed down by the U.S. Patent and Trademark Office -- Mendez denies that it had any influence on Visto's decision to sign a license with NTP. "We've been in talks with them for many months," he says.

Realizing that Spencer's ruling dramatically raises the stakes for RIM's ability to guarantee uninterrupted service, research firm Gartner Inc. said last week that "Customers should place mission-critical BlackBerry deployments on hold until RIM's legal position is clarified." Rob Sanderson, an analyst with American Technology Research, wrote in a note after the Visto announcement today that he expects a settlement soon in the RIM-NTP struggle and that, "The most common 'whisper number' on settlement [between RIM and NTP] seems to be $1 billion, though we consider this aggressive."

-- Richard Martin, Senior Editor, Unstrung