<A HREF="http://ir.thomsonfn.com/InvestorRelations/PubNewsStory.aspx?partner=3DMzg0Tl">Palm, Inc.</A> 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 handwriting recognition software infringed a Xerox United States patent relating to computerized 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..."