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Palm settles Xerox patent suit

Palm plans to pay $22.5 million to settle a 1997 patent infringement suit regarding handwriting recognition software.

Palm will pay $22.5 million to settle a patent infringement suit with Xerox, the companies announced Wednesday.

The suit, which Xerox filed in April 1997, alleged that Palm's Graffiti technology infringed patents covering the copier maker's Unistrokes handwriting recognition software.

The settlement covers the licensing fee for Unistrokes, as well as two other patents, though the majority of it will be offset by Xerox's overall second-quarter legal fees, Xerox said.

A court in 2001 found Palm guilty of patent infringement for incorporating Unistrokes, which recognizes text handwritten on the screen of a handheld device, in its Graffiti software without obtaining a license. When the 1997 lawsuit was filed, Palm was a division of U.S. Robotics, and it used Graffiti in Pilot devices and software it sold to other PDA (personal digital assistant) manufacturers.

A 2003 decision by the U.S. Court of Appeals in Washington, D.C., upheld the 2001 decision, but the case was not settled until this week.

Accompanying the $22.5 million is a joint agreement to seven years of "patent peace" in which the two companies pledge not to sue each other within a mutually determined range of use.