The dispute started in April 1997, when Xerox sued US Robotics, later acquired by 3Com, then owner of Palm. Xerox claimed that the Graffiti handwriting recognition technology used in Palm devices infringed a Xerox patent received in January the same year.
Xerox alleged wilful infringement of its patent, entitled "Unistrokes for Computerised Interpretation of Handwriting", seeking damages and to ban Palm from infringing the patent in the future.
Although the case was initially dismissed in 2002, Xerox's claims were reconsidered following an appeal. In December 2001, a US federal court ruled that Xerox's patent is valid, enforceable, and infringed by Palm's Graffiti.
Palm appealed the ruling. In 2002, the company lost the appeal and was ordered to post a $50 million bond to Xerox. Palm has requested an appeal, and a decision on whether this will be allowed is expected within the next four months.
Palm is now claiming that its new system supports a more "natural" alphabet and is easier for new users of its handhelds to learn. Graffiti, still used in most Palm devices, required users to be familiar with an alphabet specifically developed for small screens.
PalmSource, the company's software arm, said yesterday that it has signed an agreement with Communication Intelligence Corp (CIC), to license CIC's "Jot" handwriting recognition software.
The new system, "Graffiti 2 powered by Jot", will replace the original Graffiti in all Palm handhelds shipped later this year, according to the company. The new system is similar to that used in Microsoft's PocketPC handhelds, which is also provided by CIC.