Zi Corporation has revealed that it has received notice from Nuance Communications of a patent infringement lawsuit filed against Zi in the Federal Court in Toronto, Canada. The claim accuses Zi of infringing on the intellectual property of Tegic Communications with its Qix and eZiText products. Tegic was recently acquired by Nuance. The patents referenced by Nuance are Canadian Patent Numbers 2,399,961 and 2,278,549, both entitled: Reduced Keyboard Disambiguating System.
Commenting on the lawsuit, Zi President and CEO Milos Djokovic says:
Zi takes intellectual property rights seriously and has no reason to believe that it infringes any patent claims of Nuance. This suit, in conjunction with the motion of contempt filed by Nuance on August 19, 2008 against Zi, represents a questionable course of action by Nuance in light of its failed proposal to acquire Zi at a low valuation on August 14, 2008. The timing of these motions raises serious questions as to the real motivation of these claims and we remain disappointed that Nuance is resorting to these tactics to acquire Zi without recognizing its full value. We will vigorously defend ourselves in this litigation proceeding and continue to examine all legal remedies available to us with respect to Nuances tactics.
Zi reported on 15 August, 2008 that it had declined to enter into negotiations with Nuance for a cash offer for Zi shares at a price of $0.80 (0.45) per common share, after Zis board of directors concluded that the proposal did not recognize the full value of Zi.
Separately,  Zi has renewed its License Agreement with Nokia Corporation for a multi year period. The License Agreement provides for the deployment of Zis eZiType and eZiText product offerings on Nokias wireless phones and covers a full suite of languages. The contract includes a significant initial payment to be paid after closing, and then quarterly installments from then on during the life of the contract.                                                                                       
This is a banner day for our entire organization, says Djokovic. This renewal expresses Nokias confidence in Zi as a key supplier and opens the door for further opportunities to work with Nokia on other projects. It is also a testimony to the employees of Zi who continue to work diligently in executing the turnaround strategy this management set in motion almost two years ago.