Saturday, September 25, 2004

Forgent. JPEG. LizardTech.

Forgent acquired U.S. Patent No. 4,698,672 (issued 1987) from its predecessor company's acquisition of Compressions Labs Inc. in the mid-1990s. The patent is directed to compression technology in JPEG, a standard developed through the Joint Photographic Experts Group Committee. Forgent is currently suing 42 major technology vendors over their use of technology in the JPEG image standard.

Three additional patents Forgent may seek to enforce are U.S. Patent Nos. 5,933,597; 6,181,784 and 6,650,701.

UPDATE from pdfzone:

The story was first reported on PDFzone on April 26, around the time the suit was filed in U.S. District Court.

Adobe, it turns out, had been the first to settle with Forgent back on July 2, for an undisclosed amount of money. It was dropped from the still-pending suit's list of defendants. Sony settled soon after.

The nuts and bolts of the case revolve around Forgent's U.S. Patent #4698672 , which addresses a particular algorithm used in JPEG compression, which most industry analysts believed to be public domain. Google, Apple, IBM, Kodak, and Xerox were among defendants named in Forgent's original complaint or were later added to the list--31 were named at first, and 11 more were added since.

"We believe that the patent continues to have significant value, and we will continue to license and litigate against those who we believe are infringing but have not yet agreed to a license," Forgent CEO Jay Peterson said in a July 2 article published in the Austin American-Statesman.

Forgent claims to have made $100 million in settlements so far. Some 90% of the fledgling software company’s revenue has come from patent negotiations; according to reports in the Austin American Statesman newspaper, the company is going after the digital recording technology behind TiVo in another potential lawsuit.

Furthermore, Forgent has hired a 650-lawyer firm, Baker and Botts, to scour 40 more patents tech it owns for potential infringements.

The company develops scheduling software, and employs 300 people. Licensors of its JPEG patent worldwide had paid the company about $90 million at the time the suit was filed.

Forgent claimed to have made $50 million in settlements on the JPEG patent before Macromedia agreed to terms. Dallas-based law firm Jenkins & Gilchrist--working on the JPEG case--also receives 50% of the licensing revenue plus some expenses from the patent.

The 17-year-old JPEG patent expires in October 2006.


There seem to be similar concerns (related to JPEG2000) about US 5,710,835, which technology was developed by Los Alamos National Laboratories, and licensed by Lizardtech. In October 1999 Lizardtech sued Earth Resource Mapping (ER Mapper), claiming infringement of the '835 patent. ER Mapper is a strong supporter of the JPEG2000 image standard, which competes with Lizardtech's proprietary compressed image format.


UPDATE: The CAFC held in favor of Earth Resources and against LizardTech and UC/Berkeley on October 4, 2005. (05-1062)


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