After nine years of court battles, Palm agreed Wednesday to pay $22.5 million to Xerox in a patent infringement case over technology for writing notes on the touchscreen of a PDA (personal digital assistant).

Xerox brought the case in April 1997, claiming that the handwriting-recognition technology that Palm called Graffiti infringed a Xerox patent known as Unistrokes.

The settlement allows Palm to continue using the technology. But that license won't have much effect on retail products, since Palm has already moved on to a new technology, called Graffiti 2, said Palm spokeswoman Marlene Somsak.

"Might we go back to Graffiti? I wouldn't want to speculate. But the settlement does grant Palm complete design freedom when it comes to the selection of writing recognition software," she said.

Current Palm products using Graffiti 2 handwriting recognition include the Z22, TX and Tungsten E2 handheld organisers and the LifeDrive Mobile manager.

Palm's payment includes licensing fees for Unistrokes and two other patents, as well as an agreement for "patent peace", a seven-year mutual covenant not to sue within certain fields of use.

Palm will subtract the payment from its fourth quarter earnings, scheduled to be announced Thursday.

The case lingered so long in the courts that Palm changed ownership several times. Xerox originally sued US Robotics, a company later acquired by 3Com then spun off as Palm. Palm later sold its operating system division to ACCESS, under the name of PalmSource.

The new ruling covers Palm as well as co-defendants PalmSource and 3Com. All three companies are now released from litigation, and free to use the licensed handwriting technology.

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