Updated from 1:18 p.m. ESTThe wireless email patent dispute that has ensnared Research in Motion ( RIMM) is now expanding to include software titan Microsoft ( MSFT). Redwood Shores, Calif.-based Visto, a startup that makes a platform for wireless push email that competes against RIM, announced Thursday that it has sued the world's largest software maker. Visto, established in 1996, is alleging that Microsoft's Windows Mobile 5.0 operating system for mobile devices infringes on three of its patents related to mobile access to email and data technology. Visto, which holds 25 patents and has 57 patents pending, is seeking a permanent injunction against Microsoft and monetary damages. Visto's suit against Microsoft comes one day after the company announced it had received an equity stake from NTP, the Virginia-based patent holding company whose suit against RIM threatens to shut down its popular BlackBerry service in the U.S. Visto's deal with NTP also includes an agreement to license NTP's patents. In a telephone press conference Thursday, Visto Chairman, CEO and President Brian Bogosian said the company did not attempt to negotiate with Microsoft before filing the suit and argued that the Redmond, Wash., company was well aware of Visto's products and that Visto even had been named a preferred solution for mobile operators using Microsoft's operating system in February 2004. "We looked at this very closely...we felt it was very black and white," he said. "We had very little expectation...that Microsoft would take any of our claims very seriously." Visto said Thursday that its concerns were heightened by Microsoft's recent bundling of Windows Mobile 5.0 with its Exchange server software. "This method of bundling software has led Microsoft to be prosecuted by competition authorities in the past, and in this case, potentially increases the rate and manner in which their infringement on Visto's patents occurs," Visto said in a press release.
A Microsoft spokeswoman could not be immediately reached for comment. Microsoft is currently fighting antitrust rulings in Europe and South Korea that forced the company to break up its bundles of media player software with its dominant operating system. Despite such setbacks, Microsoft boasts exponentially more resources -- $40 billion in cash and short-term investments -- to fight a small company like Visto. Bogosian acknowledged Visto faces a big fight ahead but said it has "very, very strong" balance sheet. "We are prepared financially to see this through to the end however long that takes," he said. "We expect that will be an expensive proposition." Last month, Visto secured $70 million in additional financing from new and existing investors, including Draper Fisher Jurvetson and Oak Investment Partners. The company's customers include Vodafone and Rogers Wireless, Canada's largest wireless operator. One reason for Visto's confidence comes from the fact that the U.S. Patent & Trademark Office has re-examined and approved one of the patents in question as a result of another suit filed by Visto against Seven Networks. There is one other patent that is the subject of both the Seven and Microsoft suits, which were both filed in a Texas federal court. The Seven case has been stayed for a re-examination of Visto's patents. Visto also sued a company called Smartner Information Systems earlier this year and settled a suit it filed against another company, Infowave Software. Shares of Microsoft recently fell 24 cents, or 0.9%, to $26.85. Shares of RIM recently declined 38 cents, or 0.6%, to $64.76. Get Jim Cramer's picks for 2006.