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The company claims Palm's mobile devices and services infringe seven NTP patents and seeks uspecified monetary damages arising from that infringement.

The infringement claims are around the mechanisms used within email services where they use wireless communications to supply services to mobile processors.

NTP is no stranger to patent suits, most notoriously because of its long drawn out tussle with Research In Motion. That suit, first filed in 1999, was resolved earlier this year, with RIM agreeing to a $612.5 million bill

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for a licence to use NTP's patents, despite doubt as to their validity.

It is this shadow which Palm is relying on in its terse response to the suit. It says that the USPTO has re-examined the patents in question and found them invalid and that some of the patents asserted by NTP are unrelated to Palm's activities.

'Palm has been in occasional contact with NTP concerning a license to these patents. When Palm last communicated with NTP many months ago, however, each of the patents already was the subject of re-examination proceedings by the PTO. Palm is disappointed that, after many months of silence and repeated rejections of NTP's claims by the PTO, NTP has chosen to sue on patents of doubtful validity,' it said in a statement.

'Palm respects legitimate intellectual property rights, but will defend itself vigorously against the attempted misuse of the patent and judicial systems to extract monetary value for rights to patents that may ultimately have no value at all.'

Palm stock dive 8.1 per cent on the news, or $1.24, to $14.17 in afternoon trade on Nasdaq yesterday.