Xerox of Stamford, Connecticut alleges that its scientists invented the “Unistroke” software that recognises one-stroke motions as characters, the basis of Palm handwriting recognition system. Xerox brought the action against Palm’s then-parent company 3Com in 1997, shortly after Xerox registered the patent in the US.
Last June, a New York federal court judge threw out the case against 3Com saying there was “no genuine issue as to any material fact.” Friday’s ruling, passed unanimously by three judges, said that Xerox has a reasonable chance of prevailing in its claims.
According to Wired, Xerox is now considering whether to push for settlement or trial. It is possible that the end result could be the need for Palm and Palm licensees such as Handspring to pay royalties to Xerox on every sale of a Graffiti-based PDA.
Meanwhile, Xerox also announced on Friday that it has dismissed KPMG as its auditor following a financial scandal over Xerox’s Mexican operations that led to the dismissal of Xerox managers and an enquiry by the Securities and Exchange Commission. In May, KPMG was accused of misapplying certain accounting rules. The company has appointed PricewaterhouseCoopers in place of KPMG.