ROCHESTER, N.Y.-Feb. 20, 2003--A federal court of appeals ruled today that Palm Inc. handheld electronic organizers infringe on Xerox Corporation's Unistrokes patent. The ruling, issued by the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., rejected Palm's appeal and affirmed a lower court ruling made in December 2001 on Palm's infringement of Xerox's patent. At the same time, the Court of Appeals found that the lower court's ruling did not include sufficient analysis on certain aspects related to the validity of the patent. Therefore, the Court of Appeals returned a portion of the case to Judge Michael Telesca, U.S. District Court for the Western District of New York in Rochester, for further analysis on validity. "The U.S. Patent Office has ruled three times on the validity of Xerox's Unistrokes patent," said Barry Kesselman, Xerox associate general patent counsel. "We believe strongly that Xerox will continue to prevail on this issue. In our view, sending the case back to the District Court simply delays the inevitable. In the end, Palm will be held responsible for infringing Xerox's patent." Kesselman also noted that Judge Telesca's most recent ruling accepted the Patent Office's finding of validity. Xerox has also asked the court to impose an injunction that will prevent Palm from selling electronic organizers that infringe upon Xerox's patent. In today's ruling, the Court of Appeals said, "In the event that the trial court does not find the claims of the 656 (Unistrokes) patent invalid or unenforceable and re-enters a final judgment in favor of Xerox, the court should grant Xerox's motion for injunctive relief." Last year, the District Court ordered Palm to post a $50 million bond to ensure that Xerox was able to collect at least some of the damages it would suffer as a result of Palm's infringement during the appeal period. In April 1997, Xerox sued U.S. Robotics, later acquired by 3Com then spun off as Palm Inc., asserting that the handwriting recognition technology marketed as Graffiti and used in Palm handheld devices infringed a Xerox patent received on Jan. 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 U.S. Patent and Trademark Office following reexamination of the Unistrokes patent. "We continue to serve notice that Xerox will always take the appropriate actions to protect its valuable patents from unauthorized use and infringement," said Kesselman.