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Palm, Xerox Settle Patent-Infringement Suit

Palm has agreed to pay Xerox $22.5 million to settle a 9-year-old patent-infringement suit.
Palm Inc. on Wednesday said it has agreed to pay Xerox Corp. $22.5 million to settle a 9-year-old patent infringement suit.

Xerox sued Palm in April 1997, claiming the handwriting recognition technology marketed as Graffiti and used in Palm OS handheld computers infringed a Xerox patent. The technology is no longer used in Palm devices.

The settlement gives Palm a fully paid-up license for three Xerox patents, including the so-called "Unistrokes" patent, and a seven-year mutual pact that provides limited protection against patent-infringement suits from either company.

In addition, Palm co-defendants PalmSource Inc., a subsidiary of Access Co. Ltd., and 3Com Corp., received an unconditional release from the litigation. Palm, based in Sunnyvale, Calif., will account for the license as a charge against earnings in its fourth quarter of fiscal year 2006.