“We reject the claim and will vigorously defend ourselves,” TomTom spokesman Taco Titulaer said, adding that Microsoft sent a letter to TomTom’s U.S. office informing it of the action.

Microsoft said it was taking the legal steps against TomTom, which makes portable navigation devices for cars and mapping software for handheld computers, after the two failed to reach a patent-licensing agreement after more than a year of talks.

“When a reasonable business agreement cannot be reached, we have no choice but to pursue legal action to protect our innovations and our partners who license them,” Horacio Gutierrez, deputy general counsel of Intellectual Property and Licensing at Microsoft, said in a statement.

Microsoft filed a complaint in a U.S. District Court in Washington and at the International Trade Commission.

Shares in TomTom were down 6 percent at 3.10 euros at 1113 GMT (6:13 a.m. EST), near an all-time low of 2.81 euros and compared with a 0.3 percent rise in the Amsterdam AEX index.

“We fear this news could depress the TomTom share price for a long time,” RBS analyst Wim Gille said.

Martijn den Drijver, analyst at SNS Securities, said given that TomTom rival Garmin has already licensed technology from Microsoft, it is likely that TomTom will settle the case and pay a license fee.

“A prolonged legal battle at this point, with an uncertain outcome, does not make sense,” he said in a note.

Microsoft said the patents involved in the case related to innovations in car navigation technology and other computing functionality that Microsoft has licensed to other companies.

TomTom reported this week a 989 million euro ($1.3 billion) fourth-quarter net loss as it made a 1 billion euro writedown on digital map supplier Tele Atlas, which it acquired last year.

The company is now exploring options to prevent a breach of its loan covenants.

($1=.7853 Euro)

“Creditors will act quickly and definitively if they perceive that management is (not) acting … in the best interest of the estate,” the paper quoted Edward Weisfelner, a partner with Brown Rudnick LLP – the law firm representing the creditor group – as saying.

The satellite radio company said in response that its management is “continually working to ensure the best possible outcome for the enterprise,” the Journal reported on its website on Sunday, adding that a final decision on Sirius’ future is expected on Monday.

Liberty Media Corp is in talks with Sirius to invest but not take it over, a source said on Friday, as Sirius tries to stave off a bid by EchoStar Corp.

The talks with Liberty are seen as a last-ditch attempt by Karmazin to hold off EchoStar, which holds $175 million in Sirius convertible bonds due on February 17.

Sirius said it had refinanced some debt that was due in December, but added that it still might have to file for Chapter 11 bankruptcy protection if talks toward refinancing other debt did not yield results by Tuesday.

The fix “addresses a significant portion of outages that customers otherwise might have experienced,” said Liz DeCastro, a spokeswoman for closely held Iridium.

Details were not disclosed.

The crash, about 485 miles above the Russian Arctic on Tuesday, destroyed the derelict Russian craft and one of the 66 cross-linked satellites that make up the Iridium mesh.

The company, based in Bethesda, Maryland, said it was preparing to activate one of its orbiting spares to restore the network fully.

The constellation provides voice and data services for areas not covered by ground-based communications. It counts about 300,000 clients worldwide, including the U.S. Department of Defense, maritime users and scientists at the South Pole.

Iridium declined to say if it was considering action against Russia for any negligence. Operators are expected to bring dying spacecraft back to Earth or park then in orbits out of the way of operational satellites.

“Of course, we’re still looking at the matter,” DeCastro said.

The company said Thursday it had no advance warning of the impending collision.

The reports come as Sirius XM faces heavy debt payments ahead, and amid widespread views that a deal with Ergen is the most likely and preferable scenario for the satellite radio provider to avoid bankruptcy.

The New York Times reported that Sirius was in preliminary talks with media mogul John Malone’s Liberty Media, while the New York Post said Karmazin asked DirecTV to buy it. Liberty Media controls DirecTV.

The Times, quoting people briefed on the negotiations, said it was not clear how advanced the talks between Sirius XM and Liberty were.

The Post, quoting sources, said Karmazin prefers a deal with DirecTV, as merging with Ergen would force him to give up control.

DirecTV declined to comment, while Sirius XM and Liberty Media officials were not immediately available for comment.