A federal court of appeals has ruled that Palm infringed upon a handwriting-recognition patent developed by Xerox, but a lower court must now determine the validity of the patent.

The ruling affirmed a lower court ruling and rejected Palm's appeal of a decision delivered in December 2001. The legal row is over Xerox's Unistrokes patent, which was developed at Xerox PARC, and enables users to input letters and numbers into personal data units with basic, one stroke handwriting movements.

The Court of Appeals did find that the lower court failed to provide adequate information and analysis of several aspects of the patent's validity. Xerox, for its part, wants the court to impose a legal injunction barring Palm from selling portable computing devices that infringe on Xerox's patent.

In 2002, the District Court ordered Palm to post a bond of $50 million to make sure Xerox would be able to collect potential damages. The case started in April 1997, when Xerox sued then-U.S. Robotics, which was subsequently acquired by 3Com, and spun off into Palm. Xerox said that Palm's Graffiti technology used in Palm, Handspring and other portable computing devices infringed on its patent.