SUNNYVALE, Calif.--(BUSINESS WIRE)--June 28, 2006--Palm, Inc., (Nasdaq:PALM) today announced that it has settled a patent infringement lawsuit filed by Xerox Corporation nine years ago. Xerox issued a companion news release today.

In April 1997, Xerox sued a predecessor to Palm, Inc., claiming that the handwriting-recognition technology marketed as Graffiti(R) and formerly used in Palm OS(R) handheld devices infringed a Xerox patent known as the Unistrokes patent.

The agreement affords Xerox and Palm "patent peace." Palm will pay Xerox $22.5 million for a fully paid-up license for three Xerox patents, including Unistrokes, and a seven-year mutual covenant not to sue for patent infringement within mutually agreed fields of use. Palm will account for the license as a charge against earnings in its fourth quarter of fiscal year 2006. Under the settlement, Palm's co-defendants, including PalmSource, Inc., a wholly owned subsidiary of ACCESS Co., Ltd., and 3Com Corp. will receive a full and unconditional release from the litigation, and each is entitled to a fully paid-up license to the Unistrokes patent.

About Palm, Inc.

Palm, Inc., a leader in mobile computing, strives to put the power of computing in people's hands so they can access and share their most important information. The company's products for consumers, mobile professionals and businesses include Palm(R) Treo(TM) smartphones, Palm handheld computers, and Palm LifeDrive(TM) mobile managers, as well as software, services and accessories.

Palm products are sold through select Internet, retail, reseller and wireless operator channels throughout the world, and at Palm Retail Stores and Palm online stores (http://www.palm.com/store).

More information about Palm, Inc. is available at http://www.palm.com.

Palm, Treo and LifeDrive are among the trademarks or registered trademarks owned by or licensed to Palm, Inc. All other brand and product names are or may be trademarks of, and are used to identify products or services of, their respective owners.

CONTACT: Palm, Inc.
Sandy O'Halloran, 408-617-7639 (investor relations)
sandy.ohalloran@palm.com
Marlene Somsak, 408-617-7451 (media relations)
marlene.somsak@palm.com

SOURCE: Palm, Inc.