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NCR's lawsuit against Palm and Handspring, filed earlier this week as a patent dispute, is already sending ripples through the handheld market.

NCR claims to hold two patents governing the creation and sale of handheld devices dating back to 1987, according to documents filed in U.S. District Court in Delaware. NCR is asking the court to order Palm and Handspring to stop selling their handheld devices.

Handspring believes the claims by NCR are without merit, and it plans to work with Palm to defend itself against them, says Brian Jaquet, a company spokesperson. Palm has no immediate comment.

But NCR wants Palm and Handspring to compensate NCR for damages related to past and future sales of devices that allegedly infringe on NCR patents, the lawsuit says.

NCR Cites Early Work, Not Products

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 not seeking action against Microsoft or its partner manufacturers of the Pocket PC, the Palm device's primary rivals in the handheld market.

In its early research and patent filing, NCR wanted to create a device that lets users execute shopping transactions and enter information for appointments, to-do lists, and addresses. That's just like the 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.

When asked whether NCR plans to extend the lawsuit to other handheld makers, company spokesperson John Hourigan declines to comment.

Even though it claims to hold the patents, NCR has not released 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 says.