Palm Signs Perpetual License for Palm OS Garnet Source Code and Expanded Patent Rights

Palm Signs Perpetual License for Palm OS Garnet Source Code and Expanded Patent Rights

December 7, 2006

By: Jill Janson

Palm, Inc. today announced it has signed an agreement with ACCESS Systems Americas, Inc. (formerly PalmSource, Inc.) to license the source code for Palm OS Garnet, the version of the Palm OS used in several Treo smartphone models and all Palm handheld computers. Under the agreement, Palm has a perpetual license to use as well as to innovate on the Palm OS Garnet code base. Palm will retain ownership rights in its innovations.

The new agreement also provides Palm flexibility to use Palm OS Garnet in whole or in part in any Palm product, and together with any other system technologies. The company plans to ensure that applications now compatible with Palm OS Garnet will operate with little or no modification in future Palm products that employ Palm OS Garnet as the company evolves it over time to support Palms product differentiation strategy.

In addition, Palm has secured an expansion of its existing patent license from ACCESS to cover all current and future Palm products, regardless of the underlying operating system.

For all of these rights, Palm will pay ACCESS a total of $44 million, which will be paid in Palms third quarter of fiscal year 2007, and will be recognized as an expense over the next several years. This single payment eliminates the requirement for Palm to pay ACCESS continuing royalties of 10s of millions of dollars over the coming years.

“This agreement gives Palm increased ability to innovate on the Palm OS Garnet base, and to effectively differentiate Palm products long into the future,” said Mark Bercow, senior vice president of business development at Palm, Inc. “We value the Palm OS development community, and are very committed to our loyal base of Palm OS customers, all of whom will benefit from the agreement just concluded with ACCESS.”

Just as it will continue to enhance Palm OS, Palm will continue to support and further innovate on its implementation of Windows Mobile 5.0 Pocket PC Edition, which it licenses from Microsoft. By supporting both operating systems, Palm gives its customers from carriers and enterprises to consumers and small businesses a choice of operating environment.

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