Suit settled for $22.5 million

Xerox Corporation and Palm, Inc have settled the patent infringement lawsuit that Xerox filed nine years ago.

In April 1997, Xerox sued a predecessor to Palm, Inc, claiming that the handwriting-recognition technology marketed as Graffiti and formerly used in Palm OS handheld devices infringed a Xerox patent known as Unistrokes, received on January 21, 1997.

Xerox said that the settlement serves to avoid further costs and distractions from the protracted legal appeals.

Under the settlement, Palm will pay Xerox $22.5 million, which includes licensing fees for Unistrokes and two other patents. The agreement also calls for "patent peace," a seven-year mutual covenant not to sue within mutually agreed fields of use.

Net proceeds of the agreement will be substantially offset in Xerox's second-quarter net income by costs related to the expected settlement of other legal matters.