Monday, March 20, 2006

AP discusses patent trolls, Forgent

AP: Forgent and other companies with similar strategies — often called "patent trolling" by critics — amass intellectual property portfolios and file suits against other businesses, accusing them of infringement.

With a skeleton crew of 30 employees and the help of a law firm, Forgent has built a business out of suing — or threatening to sue — companies, even though it offers no related products and does no development of the technology itself.

Though critics say such tactics curb innovation and drive up costs for consumers, Forgent CEO Dick Snyder insists he's merely providing maximum value to shareholders.

"This country was built on innovation, and in the Constitution there is a provision in there to protect innovation through patenting," said Snyder, a former executive at Hewlett-Packard Co. (HPQ) and Dell Inc. (DELL). "It's the American way, and we're just doing what we believe is the right thing to gain value from what we own."

Forgent claimed many companies were using the patented compression technique covered in the 672 without paying a licensing fee.

Thirteen companies have settled, including Yahoo! Inc (YHOO). Over 50 others not involved in Forgent's lawsuit have agreed to pay unspecified royalties for using the patent, including RIM, and Forgent has notified more than 1,000 other companies they may owe royalties.


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