Palm and Xerox Settle Dispute

[Linley Meslier]

SUNNYVALE, Calif., Jun 28, 2006 (BUSINESS WIRE) -- Palm, Inc., (Nasdaq:PALM) today announced that it has settled a patent infringement lawsuit filed by Xerox Corporation nine years ago. Xerox issued a companion news release today.

In April 1997, Xerox sued a predecessor to Palm, Inc., claiming that the handwriting-recognition technology marketed as Graffiti(R) and formerly used in Palm OS(R) handheld devices infringed a Xerox patent known as the Unistrokes patent.

The agreement affords Xerox and Palm "patent peace." Palm will pay Xerox $22.5 million for a fully paid-up license for three Xerox patents, including Unistrokes, and a seven-year mutual covenant not to sue for patent infringement within mutually agreed fields of use. Palm will account for the license as a charge against earnings in its fourth quarter of fiscal year 2006. Under the settlement, Palm's co-defendants, including PalmSource, Inc., a wholly owned subsidiary of ACCESS Co., Ltd., and 3Com Corp. will receive a full and unconditional release from the litigation, and each is entitled to a fully paid-up license to the Unistrokes patent.