Patent fight prompts Avistar to slash staff, China plans

Microsoft's patent dispute with Avistar has prompted San Mateo-based UC services company to announce plans to cut its workforce by 25 percent by the end of the first quarter and drop plans to initiate a China-based development program. Avistar has been struggling through some tough financial straits this year; its stock is off nearly 50 percent from its 52-week high and it only last week reached compliance with Nasdaq listing standards that require it to have a minimum $25 million in market value of listed securities.

Microsoft in February launched a challenge [1] of all Avistar's U.S. patents for instant messaging, video conferencing and online collaboration. "This single action against Avistar's complete U.S. patent portfolio represents over 5 percent of the entire 2007 third-party re-examination challenges at the USPTO," said Avistar CEO Simon Moss, who took over as CEO of Avistar Jan. 1. While Avistar says it hopes to reach licensing agreements with Microsoft, the reality is that the challenge could be a crippling blow and Avistar is scrambling to protect its financial position.
 
The announcement comes on the heels of Avistar's launch of a videoconferencing system [2] designed and priced for small to mid-size meeting rooms. The C3 Teamroom MP offers multi-party calling, automated track-the-talker camera adjustment, presence-awareness, click-to-call connection, integrated IP network bandwidth management technology, and interconnectivity with third party IP videoconferencing systems.
 
"C3 Teamroom MP takes the high-end functionality of our successful C3 desktop videoconferencing software for unified communications, and packages it for the meeting room at a price that will upset the competition," Stephen Epstein, chief marketing officer at Avistar, said in a statement.
 
For more on the patent dispute:
- Read the release [3] 

For more on Avistar's new video conferencing system:
- Read the release [2] 

Related article:
Microsoft challenges Avistar patents [1]