Visto claims that Microsoft's Windows Mobile 5.0 infringes on three of its patents that provide users with access to corporate e-mail servers on their mobile devices. The suit, filed in the U.S. District Court for the Eastern District of Texas, asks the court to force Microsoft to stop selling the software immediately and to award monetary damages.
The company said it is especially concerned about the situation since Microsoft announced that it would bundle Windows Mobile 5.0 with its Exchange Server, the leading e-mail management software.
The Visto patents in question focus on three areas of mobile communications, including remote access, security, and synchronization between mobile devices and e-mail servers.
Microsoft is readying a new service pack for Exchange, but in order to get all the new mobility features, users will have to also deploy Windows Mobile 5.0. Visto has likened this situation to when Microsoft bundled its Internet Explorer browser and its Windows Media Player with its Windows operating system, both actions resulting in high-profile antitrust suits against the software giant.
In each of these situations, Microsoft was sued by smaller competitors, such as Netscape and RealNetworks. For the past decade, courts in the United States and abroad have deemed these practices anticompetitive. While many of the smaller companies have received multimillion-dollar settlements, they have lost significant momentum in the market. Meanwhile, Microsoft has walked away with the lion's share of profits in many of these emerging markets.
"Innovative companies have been pummeled out of existence or into minor players after Microsoft decided to enter their markets," Brian Bogosian, Visto's CEO, said in a statement. "Netscape and RealNetworks are among the best known examples. Courts around the world have ruled time after time against Microsoft, saying that it has acted either inappropriately or in violation of the law, especially concerning how they have treated competing companies. We will not let that happen to Visto."
Visto's technology is used by several cellular operators, including Cingular, Sprint Nextel and Canada's Rogers Wireless, to provide mobile e-mail services to consumers.
The lawsuit against Microsoft comes a day after Visto announced a deal to license mobile e-mail technology from NTP, which is suing Visto's archrival, Research In Motion, for violating its patents. RIM is now facing a potential shutdown of its popular BlackBerry service in the United States, after a federal judge rejected a $450 million settlement reached earlier in the year between RIM and NTP.
Microsoft was unavailable for comment.
During a conference call with analysts and reporters on Thursday, Bogosian admitted that his company did not approach Microsoft before filing the lawsuit. But he said that Microsoft has been well aware of the company and the technology it developed more than a decade ago.
"It's clear that Microsoft has known about Visto for years," he said. "And given Microsoft's track record, we didn't think they'd take us seriously before. Now they will."
Visto is embroiled in another lawsuit with competitor Seven Networks for allegedly infringing on its patents. Some of the patents mentioned in the Microsoft case are also involved in the case against Seven, Bogosian said.
He added that Visto, which recently raised $70 million in funding, is prepared for a long, hard fight that could potentially cost millions of dollars. The company's investors, which include Oak Investment Partners and Draper Fisher Jurvetson, support the company's efforts, he said.
