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Palm to pay $22.5 million over Xerox suit

Handheld computer and phone maker Palm Inc. Wednesday said it will pay $22.5 million to Xerox Corp. to settle a long-standing patent dispute.
/ Source: Reuters

Handheld computer maker Palm Inc. said Wednesday it would pay $22.5 million to Xerox Corp. to settle a patent infringement suit filed in 1997.

The dispute stems from a suit Xerox filed against a predecessor company to Palm Inc., charging that the handwriting-recognition technology sold as “Graffiti” and formerly used in some Palm devices infringed on a Xerox patent for a system known as Unistrokes. Palm replaced Graffiti with an updated system called Graffiti 2 in 2003.

The $22.5 million payment covers a fully paid-up license for three Xerox patents, including Unistrokes, Palm said. The two sides also agreed to “patent peace,” or a seven-year mutual covenant not to sue within mutually agreed fields of use.

Palm said it would account for the license as a charge against earnings in its fiscal fourth quarter results.

Xerox said net proceeds of the payment would be mostly offset by costs related to the settlement of other legal matters.