Microsoft Sued Over JPEG-Related Patents

Matt O'Conner
AUSTIN, Texas — Forgent Networks is suing Microsoft, alleging that the software giant is infringing the patent on Forgent’s still-image-compression technology by using the JPEG digital-image standard.

“If a company uses JPEG, they are using our patent,” said Michael Noonan, director of investor relations at Forgent. “We want [Microsoft] to pay a reasonable royalty for the technology they are using.”

The suit, filed in U.S. District Court through Forgent’s Compression Labs subsidiary, comes in response to another suit filed March 15 in which Microsoft asked a court to declare that use of JPEG is not infringing and to invalidate the patent in question.

The two companies had been negotiating a possible license agreement before Microsoft filed its claim in an apparent preemptive strike.

Noonan said his company prefers to reach an agreement but will “vigorously pursue” legal action if necessary.

“It’s unfortunate that, despite Microsoft’s recent inquiries about licensing the patent, they chose to file a lawsuit, leaving us no alternative but to assess infringement claims against it,” Forgent CEO Richard Snyder said.

In 2002, Forgent announced that it believed the technology used to compress still images in JPEG infringed on U.S. Patent 4,698,672, which it owns. The company immediately began seeking license agreements with all companies using JPEG and suing those with whom it was unable to reach agreements.

In April 2004 alone, Forgent sued 31 companies. It 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 $90 to $100 in licensing fees, including $16 million from Sony.

Some industry analysts believe the suit against Microsoft may be something of a Hail Mary move on Forgent’s part, since its patent expires in October.

In its own legal papers, Microsoft accused Forgent of “subverting the JPEG standard to extract millions of dollars in unwarranted profits.”