Palm appeal dismissed in Xerox suit but door still open

An appeals court judge handed Xerox Corp. a partial victory in a continuing lawsuit against Palm Inc. on Friday, but left the door open for Palm to appeal a previous ruling. The long-running lawsuit centers on the Graffiti input technology that is a central part of Palm's PDA platform.

The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., rejected an appeal by Palm lodged after a lower court ruling in December 2001. That ruling found that a patent held by Xerox regarding input technology was "valid and enforceable" as part of the case, in which Xerox sued Palm and 3Com Corp.

The appeals court also found that the lower court ruling did not sufficiently analyze issues related to whether Xerox's patent is enforceable, Xerox said. That part of the case was returned to Judge Michael Telesca of the U.S. District Court for the Western District of New York in Rochester for further study. Telesca was the judge involved in the December 2001 ruling.

Palm could not immediately be reached for comment on Thursday's decision.

Almost exactly one year ago, Judge Telesca ordered Palm to pay a US$50 million bond as insurance in the dispute.

On Thursday, Xerox asked the judge to block sales of Palm PDAs. It made the same request a year earlier, when Palm was instructed to pay the bond, but was turned down then because Telesca said that continued sales of PDAs by Palm would not irreparably harm Xerox.

The case dates from April 1997 when Xerox sued U.S. Robotics, which was later acquired by 3Com. Xerox contended that the Graffiti input technology infringed on patents the company held for its Unistrokes handwriting recognition software. 3Com spun off Palm in early 2000.

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