The patents, which NCR says it received in 1987, relate to handheld devices that perform financial transactions such as shopping via a communications network. Dayton, Ohio-based NCR filed the suit Wednesday in U.S. District Court in Delaware.
"Palm and Handspring knew about the NCR patents; however, they chose not to seek licenses from NCR," the lawsuit contends.
Both Palm and Handspring can incorporate wireless capabilities for connecting to the Web into some of their handhelds.
An NCR representative confirmed the filing of the suit but wouldn't comment further.
Handspring representative Brian Jaquet said the company has received a copy of the suit and is working with Palm to defend against it. "The claims are without merit," Jaquet said. A Palm representative wouldn't comment on the suit.
Founded in 1884 as National Cash Register, NCR has reinvented itself. The company now sells software and hardware such as scanners and ATM machines for the retail and financial industries.
Santa Clara, Calif.-based Palm set its sights on retailing earlier this year at the Consumer Electronics Show in Las Vegas when it announced the eWallet. The eWallet feature will allow Palm owners to use their PDAs (personal digital assistants) to buy products and services.
"The handheld will be transformed into a wallet this year," Palm CEO Carl Yankowski said at CES. "It will act as a debit card in your Palm with a secure (infrared) connection which will replace a card swipe."
Wireless shopping and banking have been identified by analysts as two potentially profitable niches for manufacturers of PDAs.
"Shopping and banking are something that consumers do every day, and if PDA makers can enable consumers to do this wirelessly on their devices, it only makes them more compelling," IDC analyst Alex Slawsby said Thursday.
PDAs are one of the more popular device categories in the technology market. Handheld shipments nearly doubled to 9.4 million in 2000, compared with 5.1 million the previous year, according to Gartner. Both Gartner and IDC expect annual PDA shipments to be around 30 million worldwide by 2004.
Palm and Handspring are the No. 1 and No. 2 handheld makers, respectively. Palm accounted for about 60 percent of all handhelds sold at U.S. stores in January, and Handspring had a quarter of the market, according to PC Data. Mountain View, Calif.-based Handspring licenses Palm's operating system, as does Sony.