Forgent Sues 31 Companies for JPEG Royalties

Forgent Networks announced today that its subsidiary, Compression Labs, has initiated litigation against 31 companies for infringement of U.S. Patent No. 4,698,672 — the so-called ‘672 compression patent — in the U.S. District Court for the Eastern District of Texas, Marshall Division.

Forgent has engaged in aggressive pursuit of royalties related to JPEG image compression since first publicizing its claim to the patents in July 2002. In February 2003, for example, the software maker won a US$16 million licensing agreement from Sony based on the ‘672 patent. Over the last two years, its intellectual-property business reportedly has generated approximately $90 million from licensing the ‘672 patent to 30 different companies in Asia, Europe and the United States.

More recently, Forgent has sought to reach agreements on numerous occasions with all of the companies named in today’s lawsuit, but none of the defendants has chosen to license its patents, according to the company. Forgent has retained Jenkens & Gilchrist, a national law firm, and The Roth Law Firm of Marshall, Texas, to represent it in the litigation.

Who’s Who Lawsuit

Because the JPEG compression format is widely considered to be among the best compression algorithms available — offering a good trade-off between image quality and file size — many of the largest tech companies rely on the format in one way or another.

The defendants identified in the Forgent lawsuit read like a Who’s Who in Technology. Named defendants include Adobe Systems, Agfa, Apple Computer, Axis Communications, Canon USA, Concord Camera, Creative Labs, Dell, Eastman Kodak, Fuji Photo Film, Fujitsu Computer, Gateway, Hewlett-Packard, IBM, JASC Software, JVC, Kyocera, Macromedia, Matsushita, PalmOne, Panasonic, Ricoh, Broderbund, Savin, Thomson S.A., Toshiba and Xerox.

The original ‘672 patent relates to digital image compression, not directly to JPEG technology, but Forgent’s argument is that the JPEG compression standard relies on patented Forgent technology. The company also plans to argue that any digital still-image device used to compress, store, manipulate, print or transmit digital still images, such as a digital camera, must be properly licensed if it is to use the compression technology.

The claim to the JPEG standard has long been a bone of contention with the Joint Photographic Experts Group committee, which has worked to create standards related to the JPEG file format since it was devised in 1986.

When Forgent first staked its claim to JPEG compression technology, the JPEG committee denounced attempts to derive fees from the standard and expressed disappointment at Forgent’s attempts to do so.

Beyond Digital Compression

In today’s statement to the press, Forgent argued that the ‘672 patent extends beyond digital compression and includes technologies that allow still-image devices to use the compression, such as personal digital assistants, cellular telephones, printers, scanners and other devices used to compress, store, manipulate, print or transmit digital still images.

Forgent also argued that it has the exclusive right to use, license and enforce all of the claims under the ‘672 patent in all fields of use involving digital still-image compression.

“Forgent is committed to developing all of its assets and technologies to maximize shareholder value,” said Richard Snyder, chairman and CEO of the company. “We believe we will prevail in this litigation, as the ‘672 Patent is valid, enforceable and infringed.”

JPEG Committee Position

On the JPEG committee’s Web site, the organization states: “In 2002, it became widely publicized that one or more companies were making claims in some countries that they had patents which they believed read on the original JPEG standard IS10918-1.”

In an attempt to provide “as much technical background as possible to assist companies approached concerning such patent claims,” the JPEG committee has assembled a historical archive of related material online to help show how decisions were made, describe the technical inputs behind those decisions, and provide background information concerning the involvement of companies and individuals in the standardization process.

“It’s unfortunate that despite the many opportunities these companies have had to license the patent, they have all declined to participate, leaving us no alternative but to litigate,” said Snyder.

Forgent’s software offerings include applications to provides unified scheduling of all meeting logistics using the corporate calendaring platforms of Lotus Notes and Microsoft Outlook. The company also generates and licenses intellectual property related to collaboration technologies.

Such image-compression lawsuits are not without precedent. Several years ago, there was a broad move to use the PNG graphics format to avoid any ties to proprietary compression standards. Today’s lawsuit filing likely will reinvigorate attempts to push Web designers and graphic artists to rely more heavily on open standards and royalty-free compression formats.

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