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Technology

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Of Note:

The iPhone maker would use all its weapons to fight any rivals that "ripped off" its intellectual property.

This could mean that Apple is planning a legal case against Palm for when the Pre comes on the market
in the first half of this year.

The Pre was unveiled with much fanfare at the Consumer Electronics Show in Las Vegas earlier this
month, more than doubling Palm's shares over about six days.

Pre, based on a new operating system from Palm, is a highly-anticipated device that analysts see as
Palm's only chance of fighting back against competition from Apple and Waterloo, Ont.-based Research
in Motion Ltd.


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SMART PHONES
Apple issues threat, Palm investors fret

SINEAD CAREW
Reuters

January 23, 2009

NEW YORK -- Some Palm Inc. investors are worried that its highly anticipated new smart phone, the Pre, may face a legal challenge from Apple Inc. over touch-screen technology.

Apple chief operating officer Tim Cook said on a quarterly financial results call on Wednesday that the iPhone maker would use all its weapons to fight any rivals that "ripped off" its intellectual property, or IP.

"That could be a warning shot across the bow," Peter Strand, an IP specialist at law firm Shook Hardy & Bacon said yesterday.

Analysts said Mr. Cook's comments could mean that Apple is planning a legal case against Palm for when the Pre comes on the market in the first half of this year.

Specifically, the concern is that Apple could assert IP rights against Palm over Pre's multitouch interface, which lets users navigate a website by pinching their fingers together or spreading them apart on the smart phone's screen.

The Pre was unveiled with much fanfare at the Consumer Electronics Show in Las Vegas earlier this month, more than doubling Palm's shares over about six days.

Palm shares fell more than 3 per cent yesterday, and analysts said Mr. Cook's comments had weighed on the shares.

The retail price of the Pre has not been divulged.

Apple, which was careful not to mention a specific company in its comments, has been much lauded for the iPhone's multitouch feature.

"Palm is the first one that would spring to mind. You've got a new product with similar features to iPhone, and you have executives leading the charge from Apple," said Avian Securities analyst Matthew Thornton.

He was referring to Palm executive chairman Jon Rubinstein, who used to be a top hardware engineer at Apple. Fred Anderson, now a director at Palm, was previously Apple's chief financial officer.

Palm has a storied history in touch-screen devices. It is a pioneer of touch-controlled gadgets, from the Palm Pilot personal digital assistant to the Treo and Centro smart phones.

"Apple was not the first to do multitouch," said Palm spokeswoman Lynn Fox, who added that multitouch has been around since the mid-1980s.

"Palm has been building its own intellectual property portfolio for 15 years, and we will defend it vigorously, if necessary," said Ms. Fox.

Pre, based on a new operating system from Palm, is a highly-anticipated device that analysts see as Palm's only chance of fighting back against competition from Apple and Waterloo, Ont.-based Research in Motion Ltd.

"Palm, like Apple, has a rich heritage in touch technology," said JPMorgan analyst Paul Coster, adding it may become a hotly contested area, as "a lot of companies have intellectual property relating to multitouch."

UBS analyst Maynard Um said that while Apple's comments seemed to be weighing on Palm investors' minds, they did not change his investment opinion on Palm so far.

"We don't have enough details about the technology from either Palm or Apple to tell if there is an infringement," he said. "It's a little premature to talk about because [the Pre is] not even a commercial product yet."

Palm (PALM)

Close: $7.60, down 24¢

Apple (AAPL)

Close: $88.36, up $5.53

http://business.theglobeandmail.com/servlet/story/LAC.20090123.RPALMAPPLE23/TPStory/?query=

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Palm Pre review - better than the iPhone?