Palm sued over handheld claims

Hardware maker Palm Inc. is the target of a class-action lawsuit filed last week by two customers after the company revealed that one of its handheld devices couldn't display as many colours as advertised.

The suit, filed last Thursday in the Superior Court of the State of California County of Santa Clara, alleges that Palm used "fraudulent, unfair, deceptive and false advertising" to market its m130 handheld.

Palm had marketed the m130 as a device that could display more than 65,000 colours, a screen display targeted for use with 16-bit applications. Earlier this month the company disclosed that the m130 actually used a display designed for 12-bit applications, but used a technique known as "dithering" to produce 58,621 colour combinations. Dithering involves blending nearby pixels to create the appearance of more colours. Palm had apologized to customers about the colour fiasco when it was first revealed, but hadn't determined how or if it would compensate customers who purchased the m130 under false pretenses, Marlene Somsak, a spokeswoman for Palm said in an earlier interview. The company couldn't be reached for comment Wednesday.

Two defendants who are named in the class-action case -- Jonathan Lipner, of Lafayette Hill, Pennsylvania, and Yansu Ouyang, of Castro Valley, California -- argue in a filing with the court that the marketing mishap reveals a pattern of unfair and deceptive marketing practices by the Milpitas, California, hardware maker. Defendants are seeking refunds for all customers who purchased an m130, attorney fees as well as an undetermined reward for damages, according to the text of the lawsuit.

It is estimated that Palm has sold 400,000 m130 devices worldwide since it was released in March, according to Todd Kort, principal analyst with Dataquest Inc., a division of research company Gartner Inc. He noted that the shortage of colours would not be apparent to most customers and was likely not intentional.

"It's not a huge problem but its always disconcerting when some company is found misrepresenting it's products," Kort said.

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