Judge Michael Telesca of the US District Court for the Western
District of New York ruled in the lawsuit originally filed by Xerox
that the company's “656 patent is valid and enforceable,” and that
the “Graffiti product infringes” it.
Xerox will seek damages in the next phase of the trial. The
trial court will determine the amount of damages for past
infringement of the patent and Palm's ability to continue to use
the technology. If the court deems the infringement wilful, it can
triple the amount of damages due to Xerox. Both Palm and 3Com are
jointly and separately liable.
“Either Palm will have to cease production of its handheld
organiser or license the technology from Xerox," said Christina
Clayton, Xerox general counsel.
In April 1997, Xerox sued US Robotics, later acquired by 3Com,
claiming that the handwriting recognition technology marketed as
Graffiti and used in Palm handheld devices infringed a Xerox patent
received in January the same year.
The news is another heavy blow for Palm which on Wednesday
announced a second quarter loss of $54.2 million on revenues of
$290 million. The loss was marginally less severe than had been
anticipated. Last year, Palm reported revenues of $522 million for
the same quarter.
Palm later announced that it will appeal the decision. Eric
Benhamou, chairman and CEO of Palm, said last night: “We assert
that the Graffiti handwriting technology does not infringe the
Xerox patent and that Palm has strong arguments to support its
defence. 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.” Its best known licensee is Handspring,
maker of the Visor range.
