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Forgent's logo. Click here to visit the Forgent website! Forgent signs up another JPEG licensee
(Wednesday, October 23, 2002 - 19:15 EDT)

We told you last July about Forgent Networks Inc., a little-known company with a past in videoconferencing that hit the headlines when it issued a press release claiming that it owned a patent covering technology used in the JPEG standard.

At the time of that announcement, the company also revealed that it had signed its first multi-million dollar licenses with Sony and another unnamed company for the technology. A press release issued by the Joint Photographic Experts Group's committee, though, suggested that the claims were baseless due to prior art, and that it would be creating a website to gather proof of prior art - helping companies to defend themselves against Forgent's licensing demands.

We've not heard anything further on the website, which was provisionally to be online sometime this month, but we've just heard news that another company - Pegasus Imaging Corp. - has done a deal with Forgent. Terms of the agreement haven't been disclosed, but it is interesting to note the wording of the statement issued to Pegasus' customers. The document we received a copy of states that the agreement is not a confirmation of the validity of Forgent's patent, but rather a way to resolve the issue quickly so as to protect Pegasus and its customers from potential disputes:
"Dear Valued Customer,

Just a short note to first thank you for your continued faith in Pegasus Imaging Corporation as our valued customer, and to let you know some recent information about your Intellectual Property licensed from Pegasus.

You may have heard of a controversy with regard to JPEG infringing on a patent issued some years ago to Compression Labs, a Forgent Networks company. Forgent has approached companies that incorporate JPEG, including Pegasus Imaging Corp, as well as makers of digital still cameras, printers, scanners, personal digital assistants, cell phones that download images, camcorders with a still image function, browsers and any other devices used to compress, store, manipulate, print or transmit digital images.

Pegasus wants you to know that we have completed an agreement with Forgent Networks / Compression Labs over this issue concerning the Pegasus JPEG code found in our products and development kits. This agreement states that neither your company nor your company's customers using Pegasus JPEG libraries will have further issues or conflicts with these patent claims within your individual "fields of use". This is not a statement as to the validity of the claims by Forgent Networks, but more that a quick resolution was in the best interest of our customers relying on clear intellectual property rights for their important software applications. Therefore, we treated this as an insurance policy for our customers.

This communication is not to be considered an advertisement for Pegasus Imaging Corporation or the technology that we license. Rather, it is a statement of our position that we are determined to provide the appropriate indemnity to Pegasus Imaging's past, present and future customers that have a license agreement with us.

Pegasus Imaging felt you should be made aware of this situation, as you or your company may be concerned about these claims and lawsuits, and indemnity could be a major factor in your decision-making processes.

Please let us know if you have any further questions.

Pegasus Imaging"
The news will likely be a relief to Pegasus' corporate customers, who may have been concerned as to the legal status of their imaging software. It is somewhat disappointing, though, to see that Forgent's strategy of using the potential threat of a lawsuit is continuing to persuade companies to hand over money for a claim whose validity has not been established in the courts. At the end of the day, it is the end-users who pay for the software, and who must pay to line Forgent's pockets for their patent claim.

Should the patent be established as valid, then it would be fair - legally, if not perhaps morally - for the company to claim payment for a technology that until now it has allowed to be used free of charge. Thus far, though, we've yet to see any company take the issue to court, as it is proving easier to sign on the dotted line rather than potentially bankroll a long and expensive lawsuit whose outcome is not a guarantee.

As we've said in the past, patent law is long overdue for a revamp - although we'd not hold out hope for it to happen any time soon. Laws that were once created to protect the individual whose bright idea could easily be copied by large companies are now serving the exact opposite purpose - ensuring that companies can collect a steady flow of cash from licensing old ideas, rather than being spurred by competition to come up with even better ideas.

For more discussion, be sure to read our previous three news articles on the Forgent JPEG case:

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