Fifty million bucks

Following a December ruling that Xerox Corporation’s ‘Unistrokes’ patent is valid, a US District Court has ordered Palm and 3Com to post a $50 million bond with the court.

Following a December ruling that Xerox Corporation’s Unistrokes patent is valid and was infringed by Palm and 3Com’s handheld electronic organisers, a US District Court has ordered Palm and 3Com to post a $50 million bond with the court.

Palm and 3Com are appealing the judge’s December 20th, 2001, ruling for Xerox’s patent validity. Should Xerox prevail on that appeal, the $50 million bond ‘will ensure that Xerox is able to collect at least some, if not all, of the damages it will suffer as a result of 3Com’s infringement during the appeal period,’ wrote Judge Michael Telesca, US District Court for the Western District of New York.

The $50 million bond only covers the potential damages that will accrue during the appeal period. It does not cover the entire period that Palm and 3Com have been infringing Xerox’s patent.

The judge denied Xerox’s motion for an injunction that would have prevented Palm from selling its electronic organisers during the appeal period, saying Xerox would not be irreparably harmed if sales continue. However, the $50 million bond still has the same effect of protecting Xerox’s interests during the appeal period, and the denial of an injunction is appealable by Xerox.

If the Court of Appeals rejects Palm and 3Com’s appeal, the next step is for the trial court to determine the amount of damages for past infringement of the patent. If the infringement is determined to have been willful, the court can triple the amount of damages due to Xerox. Both Palm and 3Com are jointly and separately liable.

In April 1997, Xerox sued US Robotics, later acquired by 3Com, asserting that the handwriting recognition technology marketed as Graffiti and used in Palm handheld devices infringed a Xerox patent received on January 21, 1997. The technology in question, known as Unistrokes, was invented at Xerox’s Palo Alto Research Center. The Xerox patent has been found valid by the court and by a 1999 re-certification from the US Patent and Trademark Office following re-examination of the Unistrokes patent.

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