NCR filed a lawsuit last week that could send ripples through the handheld market. The company alleges it possesses patents to the types of devices developed by Palm and Handspring.

In a statement released this morning, Palm asserts its belief that NCR's claim "has no merit".

NCR claims to hold two patents governing the creation and sale of handheld devices dating back to 1987, according to documents filed in US District Court in Delaware. Researchers from NCR developed devices for handling and transmitting data in a manner similar to that of current handheld devices such as the Palm Pilot or the Handspring Visor, the lawsuit says.

NCR is asking the court to order Palm and Handspring to stop selling their handheld devices. NCR wanted to create a device allowing users to enter information for appointments, to-do lists, addresses and to execute shopping transactions - just like handhelds that have flooded the market since then. NCR also contends that it developed the idea of using docking stations where information could be exchanged between a handheld and other machines.

According to the lawsuit, Palm and Handspring should compensate NCR for damages related to past and future sales of devices that allegedly infringe on NCR patents. Handspring believes the claims by NCR are without merit and it plans to work with Palm to defend itself against them, said Brian Jaquet, a company spokesman.

In the statement, Palm contends that it was not approached by NCR prior to the lawsuit's filing. Stephen Yu, Palm's general counsel says the company "will defend itself vigorously".

NCR would say little to elaborate on the charges. When asked whether NCR plans to extend the lawsuit to other handheld makers, company spokesman John Hourigan declined to comment.

Even though it claims to hold the patents, NCR did not release consumer handheld devices of its own. The company specializes in developing technology for cash registers, ATMs (automated teller machines) and other point-of-sale hardware. NCR is concentrating on increasing the amount of information available using its point-of-sale devices, Hourigan said.