Forgent to get rich from JPEG

http://www.dpreview.com ^ | July 18, 2002

[Richard Kimball]

Forgent Networks (formally known as VTEL) has posted a press release stating their claim to JPEG and their intention to pursue licensing revenue from companies who use it. They own United States patent 4,698,672 which covers the JPEG compression standard, this patent was created by Compression Labs who Forgent bought back in 1997. The press release specifically mentions digital cameras as well as PDA's, web browsers, phones and scanners. It looks as though Sony has already paid $15 million for the privilege...

From The Register:

"Forgent's most recent SEC filing states that Sony Corporation paid the company $15 million for licensing Patent 4,698,672: a significant portion of the $22 million Forgent booked as revenue in the quarter."

From Forgent's own SEC Filing:

In May 2002, Forgent signed a multi-million dollar patent license agreement with Sony Corporation, a leading manufacturer of audio, video, communications and information technology products for the consumer and professional markets. The patent agreement relates to the Company's data compression technology and marks the second such agreement that Forgent has obtained. The first agreement, with another prestigious international company, was signed in April 2002 and generated $15.0 million in revenue during the three months ended April 30, 2002 for the Company. The Company is pursuing additional license agreements with other companies from multiple industries; however, there can be no assurance that additional licenses can be obtained or, if obtained will be on similar favorable terms.

Press Release:

Forgent Networks Clarifies Licensing Arrangement AUSTIN, Texas, Jul 11, 2002 (BUSINESS WIRE) -- Forgent(tm) Networks Inc. (Nasdaq:FORG) today clarified its licensing program regarding Forgent's JPEG data compression technology, owned by its subsidiary Compression Labs Inc., embodied in U.S. Patent No. 4,698,672.

JPEG is a standardized image compression mechanism and is designed for compressing either full-color or gray-scale still images.

Forgent has the sole and exclusive right to use and license all the claims under the '672 patent that implement JPEG in all "fields of use" except in the satellite broadcast business. Forgent's "fields of use" for licensing opportunities include digital cameras, digital still image devices, personal digital assistants (PDA's), cellular telephones that download images, browsers, digital camcorders with a still image function, scanners and other devices used to compress, store, manipulate, print or transmit digital images.

Forgent and a national law firm, who has made and continues to make a significant investment to develop Forgent's IP licensing program, are the sole beneficiaries of the patent license revenue.

"We wanted to ensure the investment community and the general public are clear about the terms of our valuable JPEG data compression technology, one of the many technologies we have in our patent portfolio," stated Richard Snyder, chairman and chief executive officer at Forgent. "We are in ongoing discussions with other manufacturers of digital still cameras, printers, scanners and other products that use JPEG technology for licensing opportunities."

[Richard Kimball]

This is the first time I've heard of a file format being patented. Do any freepers have any idea what effect this will have? I'm figuring if they keep the fee low, they can make a gazillion dollars. However, if they try to jack up the price too high, migrating to another format won't be that big a deal.

[Old Airplane Driver]

It is most likely the compression algorithm that is patented. This the case with Unisys and the LZW compression that is used in TIFF and GIF files. There is already another open standard for graphics files called "Portable Network Graphics" (PNG). Most browsers already handle it, as do many image-editing programs. Maybe this is the push that is needed to move to it.

[TomGuy]

A few years ago, a company claimed rights to the .GIF format. They got a lot of $$$ from some bigger companies. A lot of websites, etc., converted their images from .GIF to .JPG (which was promoted as a free public use format).

Times change as companies buy out companies and change the intent.

There was developing going on of a PNG format which was also supposedly a free, public use image format. It gained some, but not real extensive, acceptance.

When the patent holder of the GIF started charging, they went after bigger companies and just threatened smaller users who continued to use GIF. The trouble was, there were literally millions of GIF's so they haven't come anywhere near closing down all those "illegal" image files.

Forgent will find the same. They can collect from larger companies, but they don't have enough attorneys or $$$ to go after all the individual JPG users.

Where you will notice a difference is in graphics editing software. The image editing software will have to pay a usage fee or not allow JPG editing/saving. Thus, upgrades to your favorite graphics imaging software will either be a bit more expensive or will "gray out" the save as function for JPG. (Of course, you can always convert to another non-JPG, non-GIF format.)

[Semi Civil Servant]

GIF is owned by Unisys. I've seen graphics programs that don't include GIF. I assume it's for that reason.

Unisys waited a long time before they began to assert their ownership rights. They got a lot of free NEGATIVE publicity. I have no idea of the legal status of the issue, but I see GIFs all over the web. I don't think most people take the Unisys claims too seriously. LZW (the GIF compression formula) is an algorithm. It's sort of like copyrighting 2+2 = 4.

I see the jpeg claims going the same way. If they "win", everyone will stop using the format. So what is the point?

[Quicksilver]

Hmmmmm. Has CompuServe/AOL/etc. gotten rich off of licensing the compression algorithm in GIF?

[TomGuy]

Unisys found that out. After a decade of free use of the GIF format, they tried to cash in and put the genie back in the bottle. Forgent with JPG is trying to do the same thing. Both companies are using "loopholes" to try to cash in on big dollars. Forgent will find themselves in a similar situation as Unisys. PNG will probably get another push, or some kid will develop an imaging software that will put GIF and JPG to shame.

[Semi Civil Servant]

P.S.:

The basic U.S. patent for GIF expires in June, 2003. (Other "extensions" are "pending".) So maybe we can all shift away from jpeg to GIF next June until jpeg expires.

For 3 extra points: what percentage of corporations are run by masters of ticking off the general public?

[Quicksilver]

You'rActually it's the compression used in GIF (and licensed to CompuServe, I think)) that UNISYS owns, AFAIK, CompuServe created GIF.e right it's UNISYS that owns the compre

[Quicksilver]

GIF only supports a 256 color palette, so, it won't do for quality photos.

[okie01]

"Unisys found that out. After a decade of free use of the GIF format, they tried to cash in..."

Wouldn't trademarks be analogous to patents? In the case of trademarks, I know that if the owner does not assert his rights for ten years, he no longer owns the trademark.

Period.

Why wouldn't the same apply to a graphic algorithm?

[Lord_Baltar]

Actually, there are several copy written file formats. .FLT (Open Flight - a Real Time 3D Polygon format used in Game/Simulations) being one of them.

[Semi Civil Servant]

GIF only supports a 256 color palette, so, it won't do for quality photos.

You're right. But for the web, GIF is fine. If you're printing quality photos, you wouldn't want them in a compressed format anyway.

[Abcdefg]

From http://users.belgacom.net/prepresspanic/formats/jpeg/fileformat.htm :

JPEG stands for Joint Photographic Experts Group, which is a standardization committee. It also stands for the compression algorithm that was invented by this committee.

[Abcdefg]

Also check out http://www.prime-radiant.com/technologies/JPEG.html for a list of patents that apply to the compression technology.

[Old Airplane Driver]

The legal status is that Unisys owns the patent to the compression algorithm used in GIF files. If you run a business and either display or output GIF files from your software, you must license the algorithm from Unisys. Even when you buy image processing libraries for use in software development, GIF output is disabled until you get a license key from Unisys. Unisys has ample legal capacity to stop any small company in its tracks -- all they have to do is file a law suit. The problem for small companies is that Unisys demands a "prepayment" of royalties of $25,000 no matter how small you are. That is a show-stopper for a small company and mine, for example, simply can't use GIF for that reason.

On the upside, PNG is a public standard and has more features than GIF, JPG, and TIF put together. Most of the browsers and graphics programs already handle it, so it is easy to switch. Since Forgent has apparently been formed for the sole purpose of "mining" the JPG patent, they may just be the force that is needed to get everyone over to a free public standard.

Here is an example of a PNG. See if it displays in your browser:

[billybudd]

Time to switch to .PPM.

[Djarum]

From Slashdot:

The patent doesn't cover JPEG (Score:5, Interesting)
by StevenMaurer on Thursday July 18, @02:57PM (#3910717)
(User #115071 Info | http://slashdot.org/)

I have a combined ten patents issued and in process in this specific field, so I believe I can call myself an expert in this matter.

The claims in this patent cover digital streams which tend to come in tuples, possibly with appended data. Something like this:
  (1,4) (1,3), (1,6), (4,6), (3,6), (9,6)

It specifically claims the separation of these tuples into separate run-length encoded streams.
In my example above, it might be:
    (3x1, 4, 3, 9)
    (4, 3, 4x6) ... where the 4x6 is a run length encoding.

There are some further claims about coding signs and amplitude, and some table lookup mechanism to support the above.

The trouble is (for the patent holders), this is in NO WAY how JPEG works.

JPEG divides a video stream into blocks (8x8 and 16x16) of pixels, and runs them through a descrete cosine transform. Basically, this turns the representation of the picture into level and percentages of vertical and horizontal waveforms of various frequencies. It then quantizes these values (reducing their size and precision), and orders them from low frequency to high frequency. Then it subjects the whole thing to a run-length algorithm optimized to eliminate zeros (which high quant values tend to do). JPEG is a lossy algorithm that takes advantage of the fact that our eyes don't pick out errors in high frequency components as well as we do low frequency.

About the only claim this patent that's similar to JPEG is the Run Length Encoding. But that is covered by prior art that goes back forever.

[Still Using Air]

Yes, the image comes up. However, for dialup connections, a 256K file takes a LONG time to display. I ran this quickly thru 'Save for Web' in Photoshop, and it can be 'shrunk' to a 40K file that displays quickly on dialup, and looks the same.
I design sites, and have to take this into consideration.

[Semi Civil Servant]

PNG coming through, blue and true.

[Richard Kimball]

This is interesting. If I understand you properly, you're saying that they're running a scam and just trying to convince everyone they own the compression technology? From reading the release and other data in the post, I got the feeling this was a pretty low-rent company. Other than their income from the patent, they made 7 mil in revenues for the quarter, and their press release made it sound like a threat (give us money now or the price goes up). I can certainly see a bunch of corporate suits getting scared and paying up.