Patent Office to Reexamine ‘JPEG Patent’

Matt O'Conner
AUSTIN, Texas — The U.S. Patent and Trademark Office has agreed to review the validity of Forgent Network’s claim that one of its patent’s entitles it to royalties from companies that use the JPEG compression standard.

Forgent obtained U.S. Patent No. 4,698,672 in 1997 when it bought Compression Labs. In 2002, the company announced that it believed the patent covered the JPEG compression technique used by many PC and electronics makers and began suing and demanding licensing payments from companies that use JPEG technology.

Forgent has filed suit against 44 companies in all, including Apple, Dell, Hewlett-Packard and IBM, and negotiated usage agreements with 35 others. The company has received an estimated $105 million in licensing fees.

But a nonprofit group called the Public Patent Foundation filed a request last November asking the Patent Office to take a closer look at Forgent’s patent and submitted evidence that it said would prove Forgent has been fleecing companies out of millions of dollars in a “campaign of harassment” based on bogus intellectual property claims.

On Thursday, the Patent Office agreed to reexamine the patent.

“This is the first step towards ending the harm being caused to the public by Forgent Networks’ aggressive assertion of the patent,” Public Patent Foundation Executive Director Dan Ravicher said.

Mike Masnick, CEO of analysis site TechDirt, was less diplomatic in his enthusiasm about the prospect of the patent being ruled invalid.

“The patent in question had absolutely nothing to do with the eventual creation of JPEG image compression,” Masnick said. “[Forgent] made a bit of a stretch and said it covered JPEG compression and started suing everyone. You have a patent that obviously had nothing to do with the actual innovation, but was simply applied retroactively as a ‘lottery ticket’ to take money from those who actually did innovate.”

While he praised the Patent Office for reevaluating the patent, he also criticized it for routinely granting what he said are fraudulent patents and allowing companies to keep money collected on patents that are later invalidated through 3rd-party research.