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Forgent's logo. Click here to visit the Forgent website! Forgent takes JPEG claims to Texas courts
(Monday, April 26, 2004 - 18:25 EDT)

A press release distributed by Austin TX-based Forgent Networks Inc. announces that the company has begun litigation against 31 companies over its claims that their use of JPEG image compression technology infringes on a patent it obtained when, under its previous name of VTel Corp., it acquired San Jose CA-based Compression Labs Inc in 1997.

Forgent, a previously little-known company that rose to infamy in 2002 when it first began attempts to secure multi-million dollar licensing deals for the patent in question - which was never enforced by its original creator - looks to have quite a battle on its hands after filing suit against 31 companies, including some of the biggest names in the computer hardware and software field. Only 30 companies are identified in Forgent's press release, but they make for interesting reading:
  • Adobe Systems Incorporated
  • Agfa Corporation
  • Apple Computer Incorporated
  • Axis Communications Incorporated
  • Canon USA
  • Concord Camera Corporation
  • Creative Labs Incorporated
  • Dell Incorporated
  • Eastman Kodak Company
  • Fujifilm Photo Film Co U.S.A
  • Fujitsu Computer Products of America
  • Gateway Inc.
  • Hewlett-Packard Company
  • International Business Machines Corp.
  • JASC Software
  • JVC Americas Corporation
  • Kyocera Wireless Corporation
  • Macromedia Inc.
  • Matsushita Electric Corporation of America
  • Oce' North America Incorporated
  • Onkyo Corporation
  • PalmOne Inc.
  • Panasonic Communications Corporation of America
  • Panasonic Mobile Communications Development Corporation of USA
  • Ricoh Corporation
  • Riverdeep Incorporated (d.b.a. Broderbund)
  • Savin Corporation
  • Thomson S.A.
  • Toshiba Corporation
  • Xerox Corporation
Over the last couple of years, Forgent says it has generated a whopping US$90 million from licensing that one patent thus far - already more than the US$80 million stock transaction it required to purchase Compression Labs outright, including both its intellectual and real-world assets. Amongst others in the digital imaging field, Sony Corp. has signed a licensing agreement estimated to be worth US$16-18 million with Forgent, and another unidentified Japanese digital camera manufacturer - obviously absent from the list of companies above - has signed a US$15 million agreement. This could be seen to indicate the validity of Forgent's claims, or it could be seen as an indication that the companies believe the expense of a licensing fee to make the problem go away outweighs the costs in time and/or expense of a potentially lengthy court battle.

The fact that 31 other companies - many of them leaders in their respective fields - have thus far declined to sign up for licenses with Forgent has to be seen as an indication that they expect to win in court, and that's apparently a viewpoint the Joint Photographic Experts Group's committee (creators of the JPEG standard) shares, considering their statement that prior art which would invalidate the patent exists.

Morally, there is little question that Forgent's standpoint on enforcing patents that went unenforced for some 16 years - six years after the company took over Compression Labs - is disturbing. Compression Labs themselves were part of the Internet Engineering Task Force's standards-setting process for JPEG, and the Federal Trade Commission is apparently privately investigating whether the company used unfair tactics by not disclosing its patent application during that process. There is little question that if companies implementing JPEG code in their products had originally been subject to heavy licensing fees for use of the patent in question, JPEG images would not likely be the defacto standard that they are nowadays.

Therein lies one of the major problems with current patent law, however - there is simply no guarantee that any standard doesn't infringe on existing patents, knowingly or not. Companies can afford to apply for thousands of patents every year, and these are often granted for applications that would seem to be little more than common sense. Patents are often so open-ended that they can appear to apply to subsequent inventions far beyond the scope of the original patent. It seems that companies can stand to profit significantly in the future simply by submitting vast quantities of patent applications using the loosest possible wording, and then knowingly sitting on those patents whilst subsequent inventions infringe on them - until they become standards which are nearly impossible to abandon overnight.

The answer seems to be simple, at least on face value - the patent application process needs to be made a lot more stringent, ensuring that junk patents are not granted and that the wording of patents is sufficiently detailed to ensure they apply only to the invention in question. Patents should also be looked at in a manner similar to that used for trademarks, where (once you are aware that your patent is being infringed) you only have a certain amount of time in which to challenge this - after which you are considered to have abandoned the patent. Unfortunately, it seems unlikely that the patent process will be overhauled unless there is sufficient outcry from the public to ensure that things are changed.

In the meantime, it looks likely that Forgent's claims will finally be held up for examination in the courts, and their validity finally determined. Forgent's patent expires in the US in October 2006, and foreign equivalents of the US patents will have expired by September 2007. That may be the final end of the matter - or it could be that by then another company will have shows up with further patents it has held to its chest at that time.

In the meantime, while it might seem that manufacturers should switch to another standard for storing images, that is unlikely to happen any time soon. Countless photographers, programs and companies have based their workflow on JPEG, and it would take a vast amount of work to switch to another standard. Simply switching to another standard for image compression - even if those standards are supposedly open and free - is also no guarantee that another standard won't be plaqued by (thus far) unknown patents as well. Perhaps we're better with the devil we know than the devil we don't.

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