NCR slaps patent suit on Palm, Handspring

NCR - aka The Cash - has sued Palm and PalmOS licensee Handspring, claiming their PDAs violate its intellectual property.

Two patents are cited in the case, both of which describe a credit card-sized "portable personal terminal" used "for handling a wide variety of financial, shopping and other transactions", and were granted to NCR in 1987. The Cash maintains both Palm and Handspring new about the patents but did nothing to seek a deal to allow them to use its intellectual property.

The Cash wants "substantial" damages to be inflicted upon Palm and Handspring in punishment and compensation. It's also seeking a temporary restraint on sales of both companies' PDAs.

Palm and Handspring are the two best-selling PDA makers, at least in the retail arena, and that's probably the main reason why they have been targeted. Certainly The Cash's patents - if they apply at all - apply equally to Sony and the other PalmOS licensees, and Compaq, Casio, Hewlett-Packard and all the PocketPC partners. However, Palm launched its PDA first, and Handspring was founded by the folks who started Palm, so NCR may be targeting them as much as the companies they formed.

NCR said it is focusing on Palm and Handspring for now and would not comment on how the action might or might not be extended in the future. Presumably, it's hoping that the others will cough up royalties to avoid lawsuits of their own. Assuming, of course, that they haven't paid up already.

And well they might. The first patent, 4,634,845 and 4,689,478, which essentially extends the former, both describe a remarkably broadly Palm-like device. It can store and execute program code ("machine instructions"), "store data", interface with other systems via a "module for coupling said device with said other system to transfer data between said device and said other system". It should be "of a size enabling it to fit into a hand of said user".

"A system including a portable personal terminal which may be used for handling a wide variety of financial, shopping, and other transactions. The personal terminal is credit-card sized, is intelligent, includes a plurality of transaction totals and is constructed to be user friendly. An interface module is used to couple the terminal to other systems for on line uses." The patents also describe what amounts to an IrDA link for transmitting data.

Then again, there's nothing about a touch-sensitive display, about using a stylus with character recognition or about using the device as a personal data organiser.

As with most patent claims, there is plenty of scope for a variety of interpretations of just how close patent and Palm are. Handspring has said it will fight the case, which it damns as being without merit. Palm is evaluating the action.

Palm has been here before, of course. Last year its parent, 3Com, was sued by E-Pass Technologies, which claimed its 1994 patent for a "multifunction, credit card-sized computer that allows users to securely store a multitude of account numbers, PIN codes, access information and other data from multiple credit cards, check cards, identification cards and similar personal documents" was being infringed by Palm devices.

That suit seems to have been settled and buried, and we expect the NCR case to be settled out of court too, the usual outcome of patent infringement claims. We await the three parties to announce a technology sharing agreement. ®

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