"We assert that the Graffiti handwriting technology does not infringe the Xerox patent and that Palm has strong arguments to support its defense," said Eric Benhamou, chairman and chief executive officer of Palm, Inc. "Palm will defend itself vigorously and does not intend for this litigation to affect its business strategy or business model nor that of its licensees."

If the Xerox victory is upheld I am curious what this will mean for the future of the Block Recognizer that has been built into Microsoft's Pocket PC 2002 Operating Systems. The Block Recognizer is based on Palm's Graffiti technology so it would seem that there would be some sort of legal ramifications for Microsoft as well as Palm here.