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US Federal Court Remands Xerox Infringement Suit to District Court for Determination of Validity



February 21, 2003 -- Palm, Inc. (Nasdaq: PALM) today announced that the United States Court of Appeals for the Federal Circuit affirmed a decision by the District Court of the Western District of New York that Palm infringed a Xerox Corp. patent. But the Court of Appeals also remanded the case back to the District Court to examine the validity of the patent in question.

Xerox filed the suit in April 1997 alleging that Palm's Graffiti(R) handwriting recognition software infringed a Xerox United States patent relating to computerised recognition of handwriting.

In remanding the case to the District Court, the Court of Appeals yesterday asked the lower court to conduct a complete validity analysis of Xerox's patent in question. While the Court of Appeals affirmed the District Court's conclusion that Palm infringes the claims of the patent, it noted that the infringement was based on a broad construction of the patent, which "has implications for the issue of validity." The Court of Appeals stated in its opinion that Palm "has made strong arguments that the asserted claims, as construed, are invalid . . ."

"We are delighted that the Court of Appeals has overturned the summary judgment with respect to the validity of the patent," said Eric Benhamou, Palm chairman and chief executive officer. "This ruling recognises the strength of Palm's arguments with respect to the fundamental question of validity."


About Palm, Inc.

With shipment of more than 20 million Palm handheld computers, many carried in pockets, purses and briefcases around the world, Palm delivers devices that make it easy for people to use and keep track of what matters to them.

Information about Palm, Inc. is available at http://www.palmone.com/aboutpalm.

Palm OS is a registered trademark of PalmSource, Inc., a subsidiary of Palm, Inc. Other brands may be trademarks of their respective owners.





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