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Dating back to 1997, it involved the use of Graffiti handwriting recognition software, which translates particular strokes into alphabetic characters. Xerox alleged that the system infringed patents for its own Unistrokes handwriting software.

Palm has announced that it will pay $22.5 million to Xerox to settle the case. The payment covers a license for three Xerox patents, which cover Unistrokes. Additionally, the companies have agreed a seven-year 'patent peace'

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not to sue each other.

Palm was originally ordered to pay a $50m bond in 2002. At the time, the bond was insurance should Xerox win an appeal, which in fact it did. However, the court stopped short of ordering an injunction against Palm that stopped it from selling handhelds during the appeal process.

Subsequently, in 2004, Xerox's claim was thrown out of court. District Court Judge Michael A. Telesca issued a summary judgement in favour of palmOne after deciding that the patent was invalid. Telesca decided there had been 'prior art' to the Unistrokes patent, meaning it was not a unique invention, rendering the patent invalid. Xerox, however, has successfully pursued the case.

One effect of the dispute, back in 2003, was PalmSource's licensing of CIC's Jot for its Palm OS platform as an alternative to Graffiti. At the time, it said that the case had prompted the company to look at the market for alternatives, and it had found Jot to be better.