Palm is replacing its Graffiti handwriting recognition technology with a simplified system.
Palmsource, the handheld manufacturer's software division, said that it has signed an agreement with Communication Intelligence Corp (CIC) which allows it to incorporate CIC's Jot natural handwriting recognition technology into Palm devices.
The system will be marketed as Graffiti 2 powered by Jot.
The move follows a long-running legal dispute between Palm and Xerox. The latter claims that the Graffiti handwriting recognition technology was invented at its Palo Alto Research Centre.
"The Xerox lawsuit prompted us to take a fresh look at all the handwriting recognition alternatives," a Palm spokeswoman told Reuters. "We made a decision that Jot is better technology than Graffiti."
In 2002, a court accepted that Palm had infringed Xerox patents associated with Graffiti and ordered Palm to post a $50m (£31m) bond. Palm last week appealed against the decision.