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U.S. Court of Appeals Remands Xerox Infringement Claims to Lower Court for Further Proceedings

SANTA CLARA, Calif., Oct. 8, 2001 –– Palm, Inc. (Nasdaq: PALM) today announced that the United States Court of Appeals for the Federal Circuit has reversed a lower court dismissal of a patent infringement lawsuit brought by Xerox Corp. against Palm and also rejected a motion for summary judgment brought by Xerox in the matter. The lawsuit alleges that Palm's Graffiti(R) handwriting recognition software infringes a Xerox U.S. patent relating to computerised interpretation of handwriting. In June 2000, the District Court issued an order dismissing Xerox's claims. The Appeals Court reversed that order and sent the case back to the United States District Court for the Western District of New York for further proceedings.

"Although the case will be returned to the District Court, the Appeals Court did confirm the lower court's denial of Xerox's motion for summary judgment ," said Carl Yankowski, Palm's chief executive officer. "Palm continues to believe that the Graffiti(R) software does not infringe the patent and that Palm has other defenses supporting its stance. Palm intends to continue to vigorously defend itself."

Safe Harbor Statement

This press release contains forward–looking statements within the meaning of the federal securities laws, including statements regarding Xerox's infringement claims and Palm's defenses to such claims. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially, including the risk that the Graffiti(R) software may be found to infringe the Xerox patent. A detailed discussion of other risks and uncertainties that could cause actual results and events to differ materially from such forward–looking statements is included in Palm's most recent filings with the Securities and Exchange Commission, including Palm's annual report on Form 10–K for the fiscal year ended June 1, 2001 and Palm's Registration Statement on Form S–4 filed on Oct. 5, 2001. Palm undertakes no obligation to update forward–looking statements to reflect events or circumstances occurring after the date of this press release.

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Palm OS and Graffiti are registered trademarks and Palm is a trademark of Palm, Inc.

About Palm, Inc.

Palm, Inc. is a pioneer in the field of mobile and wireless Internet solutions and a leading provider of handheld computers, according to IDC (December 2000). Based on the Palm OS® platform, Palm's handheld solutions allow people to carry and access their most critical information with them wherever they go. Palm(TM) handhelds address the needs of individuals, enterprises and educational institutions through thousands of application solutions.

The Palm OS platform is also the foundation for products from Palm's licensees and strategic partners, such as Franklin Covey, HandEra (formerly TRG), Handspring, IBM, Kyocera, Sony, and Symbol Technologies. Platform licensees also include Acer, Garmin, Nokia and Samsung. The Palm Economy is a growing global community of industry-leading licensees, world-class OEM customers, and more than 160,000 innovative developers and solution providers that have registered to develop solutions based on the Palm OS platform. Palm went public on March 2, 2000. Its stock is traded on the Nasdaq national market under the symbol PALM. More information is available at www.palm.com

Palm OS is a registered trademark, and Palm is a trademark of Palm, Inc. or its subsidiaries.