Sharing of Palm Brand to End

The hand-held computer company that made its name with the Palm Pilot said Tuesday that it was changing its name back to Palm Inc.

PalmOne Inc. said it agreed to pay $30 million over 3 1/2 years to the software company it spun off in 2003, PalmSource Inc., for the latter’s 55% share of Palm Trademark Holding Co.

PalmOne said it expected to change its name to Palm Inc. this year.

Shares of PalmOne rose $1.58 to $28.84.

Shares of PalmSource rose $1.15 to $10.04. Both trade on Nasdaq.

PalmOne, which makes Treo-branded smart phones and Tungsten and Zire hand-held computers -- also granted PalmSource certain rights to Palm trademarks during a four-year transition period.

Executives at PalmSource said they expected they eventually would have to change the name of the software company.

PalmOne also renewed its license of the Palm operating system, saying it would pay PalmSource at least $148.5 million in royalties, subject to meeting certain milestones.

Under the licensing deal, PalmOne can continue to develop and market smart phones and other mobile devices based on the Palm operating system through 2009.

Milpitas, Calif.-based PalmOne was formed in 2003 when Palm Inc. spun off its software division after acquiring Handspring Inc.