Motorola has sued PalmSource, alleging that PalmSource reneged on a buyout agreement and failed to pay an $8.7M “breakup fee” stipulated in the agreement. PalmSource accepted Motorola's $17.25/share offer two days before agreeing to Access's $18.50/share offer, Motorola's filings in a Delaware Chancery court allege, as reported by the Chicago Sun-Times.

PalmSource was acquired by Japanese mobile phone software vendor Access on Sept. 9. Mobile handheld vendor Palm also bid to acquire PalmSource, according to reports, but bowed out when bidding rose too high. A fourth company, like Motorola a maker of devices, is rumored to have also been in on the PalmSource bidding war.

PalmSource owns the Palm operating system, which it claims has more commercial and enterprise software than any other mobile operating system platform. Palm OS has powered mobile devices for well over two decades.

PalmSource failed to interest mobile device makers in its latest “Cobalt” OS, and sales of Palm OS powered devices fell behind those running Windows CE in 2004. However, PalmSource generated a resurgence of interest in the Palm platform after it announced last December that it would convert Palm OS into a middleware layer that would allow Palm applications to run on Linux, and market that product to Linux-based mobile phone makers.

Mobile phones powered by Wind River Linux and running Palm OS middleware are rumored to be headed for the US market in Q4, 2005.

The Chicago Sun-Times story breaking the news of Motorola's lawsuit against Palm can be found here.

 
This article was originally published on LinuxDevices.com and has been donated to the open source community by QuinStreet Inc. Please visit LinuxToday.com for up-to-date news and articles about Linux and open source.