Palm to appeal patent infringement case against Xerox

Friday, December 21st 2001, 12:00 am

By: News On 6

ROCHESTER, N.Y. (AP) _ Palm Inc. said Friday it will appeal a federal court ruling that it infringed on a Xerox Corp. patent for a handwriting-recognition system used in tens of millions of Palm handheld electronic organizers.

Xerox successfully argued that its scientists invented the ``Unistroke'' software that recognizes one-stroke motions as characters. The Stamford, Conn.-based office equipment company now wants to force Palm and its former parent, 3Com Corp., to pay a windfall in license fees.

Palm, based in Santa Clara, Calif., denied that its Graffiti handwriting technology used in Palm, Handsprings and other handheld devices infringes the Xerox patent. It pledged to appeal U.S. District Court Judge Michael Telesca's ruling here Thursday that Xerox's parent ``is valid and enforceable.''

``Palm will defend itself vigorously and does not intend for this litigation to affect its business strategy or business model nor that of its licensees,'' said Eric Benhamou, chief executive of the struggling handheld computer maker.

Xerox has moved aggressively to defend against what it sees as technology pilfered from its labs, especially after letting go of inventions such as the computer mouse and laser printer.

The court feud dates back to April 1997, four months after Xerox earned a patent for handwriting recognition. The ruling ends the liability portion of the lawsuit, clearing the way for Xerox to seek damages.

The court would also decide whether Palm can continue to use the technology.

Computer networking company 3Com, which spun off its high-flying hand-held computing device maker last year, maintained that it won't have to pay damages. When it spun off Palm, ``we made sure we would be separated from any consequences'' of the lawsuit, said spokesman Brian Johnson.

The technology in dispute allows users to make simple strokes to enter letters and numbers, enabling them to write words and sentences easily. The invention became a wildly successful part of Palm computers, a machine later copied by Hewlett-Packard Co., Handspring Inc. and others.

Judge Telesca initially denied Xerox's claims in June 2000. But the U.S. Court of Appeals in Washington, D.C., reversed his ruling in October and sent it back to him. Telesca gave no indication of when damages might be decided.

Palm remains the worldwide leading maker of personal digital assistants but is struggling to return to profitability. The economic slump in 2001 led to a sudden drop in demand and a huge inventory glut. In November, the company cut its work force by 16 percent, or 250 employees.