Microsoft Corp. and 3Com Corp.'s Palm Computing Inc. subsidiary yesterday settled out of court a trademark dispute concerning 3Com's popular Palm Pilot handheld device.
Under the terms of the agreement ,Microsoft will gradually phase out use of the term "Palm PC," which the company adopted in January to describe palm-sized devices being built by its OEM's based on Microsoft's Windows CE operating system.
Instead, Microsoft will now refer to the product category as "Palm-size PCs" the companies said in a joint statement.
Palm Computing which manufactures and markets 3Com's Palm III, previously called the Palm Pilot, said the term Palm PC was too similar to its own product name and took Microsoft to court in Germany and Italy in March alleging trademark infringement. At the time 3Com said it chose the European countries because of existing trademark laws.
In the coming months, Microsoft will ship to its OEMs a worldwide release of Windows CE 2.0 that substitutes the new category name, the companies said.
In addition, existing inventories of devices using the current term may be sold until software and devices
using the new descriptor are available later this year, the companies said.
Today's agreement resolves the pending legal dispute officials said. Both companies said they are pleased to resolve the dispute so it won't endanger a long-standing business relationship they have on a number of fronts.
Ironically, 3Com quietly settled a similar naming dispute out of court recently, which forced it to drop the term Pilot from its product name, thus the name Palm III.