Research In Motion's shares remained relatively stable following yesterday's announcement of a newly filed patent infringement lawsuit against the BlackBerry maker by Visto Corporation. Shares of rival Palm enjoyed a 22-cent bump at one point in noon-hour trading.
Visto filed the suit on the heels of a favorable, albeit initial, ruling against Seven Networks. In its suit against RIM, Visto seeks an injunction and monetary damages.
Visto says it is targeting RIM based on similar allegations made in its case against Seven. RIM, however, says it believes Visto's patents could be invalid. "RIM believes it does not infringe Visto's patents and will file its legal response in due course. In addition to challenging validity and infringement, RIM will now also consider asserting its own patents against Visto," RIM said in a prepared statement.
RIM recently settled an ongoing patent battle with NTP, but analysts expect the Visto/RIM suit to proceed slowly and have little impact on the company's shares. "We believe that Visto's suit against RIM is unlikely to reach trial until well into 2007 given the timelines of the Seven case and the fact that the Good and Microsoft cases appear not to have made much progress," Lehman Brothers analysts Jeff Kvaal and Tim Luke wrote in a research note.
The Lehman Brothers analysts went on to say, "We believe that Visto is attempting to build on its initial Seven success into a case against RIM, perhaps thinking that RIM is more amenable to a settlement following the NTP case."
The new lawsuit caused Caris & Co. analyst Susan Kalla to cut her RIM rating to "Average" from "Above Average." She speculated the suit could give Palm a bump.
RIM shares were up 77 cents to $73.80 at one point.