The dispute arose in April 1997, when Xerox sued US Robotics – later acquired by 3Com, the then owner of Palm. Over the course of the dispute, Palm has spun off a software arm, known as PalmSource and, while retaining liability for the dispute, has re-named itself palmOne.
The claim related to allegations by Xerox that the Graffiti handwriting recognition technology then used in the popular PDAs produced by Palm infringed a Xerox patent granted in January of the same year.
Xerox alleged wilful infringement of its patent, entitled "Unistrokes for Computerised Interpretation of Handwriting," and sought to prevent Palm infringing the patent in the future, in addition to seeking damages.
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 had a valid and enforceable patent, which was infringed by the Graffiti technology.
Palm appealed the ruling in 2002, but was unsuccessful and was ordered to post a $50 million bond to Xerox. Palm requested a further appeal and in February last year had mixed success when the appeals court reaffirmed the earlier ruling but ordered a lower court to examine whether the patent itself was valid.
On Friday Judge Michael A Telesca ruled in favour of palmOne, declaring that the Grafitti patent was invalid because, "The prior art references anticipate and render obvious the claim." Or, in other words, the Unistroke system had already been invented by someone else.
The judge then dismissed the action.
"This is a terrific outcome," said Todd Bradley, palmOne President and CEO. "We've persevered for years to achieve this result and the vindication palmOne deserves."
Palm announced in January last year that it had abandoned its Graffiti handwriting recognition software to switch to a new system, a decision that many believe was prompted by the company's wrangle with Xerox. Meanwhile, Xerox has vowed to appeal the latest ruling, according to reports.