3Com distances itself from Palm’s Graffiti patent woes

The company announced, in response to media and investor inquiries, that it is indemnified by Palm with respect to any potential liability from the current patent litigation between Xerox and Palm. The patent litigation relates to alleged infringement of a handwriting recognition patent allegedly covering Palm's use of Graffiti in its handheld computers.

Xerox originally filed its patent infringement lawsuit against US Robotics Corporation in April, 1997, before 3Com acquired that company and its subsidiary, Palm. In 2000, 3Com spun off Palm as an independent, publicly traded company. As part of Palm's separation from 3Com it agreed to indemnify and hold harmless 3Com against any damages or losses from the Xerox lawsuit.

Xerox alleges wilful infringement of its patent, entitled “Unistrokes for Computerised Interpretation of Handwriting.” Xerox is seeking damages and hopes to permanently ban Palm from infringing the patent in the future.

In 2000, the District Court dismissed the case, ruling that the patent is not infringed by the Graffiti handwriting recognition system used with Palm handheld computers. Xerox appealed the dismissal. On 5th October 2001, an appeals court amended the ruling and remanded the case to the District Court for further proceedings. On 20th December 2001, the District Court granted Xerox's motion for summary judgment that the patent is valid, enforceable, and infringed. 3Com and Palm filed a Notice of Appeal on 21st December 2001.

In connection with Palm’s separation from 3Com, Palm agreed to indemnify and hold 3Com harmless for any damages or losses which might arise out of the Xerox litigation.