Forgent Readies Post-JPEG Patent Targets

The company behind lawsuits against 42 vendors over technology in the JPEG standard is considering its next patent moves. Topping the list: echo cancellation, object sharing and video mail technologies.

The company that is suing 42 major technology vendors over their use of technology in the JPEG image standard is preparing for its next patent targets.

Forgent Networks Inc., the owner of a patent it says covers compression technology in JPEG, is working to expand its intellectual property licensing program to include some of the approximately 50 other patents in its portfolio, company executives told this week.

Among the patents in top consideration are ones that cover echo cancellation in audio transmission, object sharing through the Internet and video-based e-mail, said Jay Peterson, Forgents chief financial officer and vice president of finance.

"Were very much in the infancy of determining the commercial viability of licensing those patents," Peterson said. "We are now working with some outside law firms specializing in intellectual property to help us with these patents."

Peterson said he expects the company to announce more formal plans for its broader portfolio of patents within the next year, such as licensing or brokering deals.

Since 2002, Forgent has been seeking licensing deals with hardware and software companies that use the JPEG standard in everything from digital cameras to imaging software. So far, it has earned more than $90 million in about 32 licensing deals from companies such as Sony, officials said.

Forgent took the JPEG-related patent to court in April by filing two separate patent-infringement lawsuits against 31 companies that included Adobe Systems Inc., Apple Computer Inc., IBM and Hewlett-Packard Co.

It followed that suit with another one in August against another 11 companies, including Sun Microsystems Inc. and Internet leaders Google Inc. and Yahoo Inc.

So far, Adobe and Macromedia Inc. have settled out of court, Peterson said. He would not discuss the terms of those settlements. But Forgent did record $5.5 million in licensing revenue for its fiscal fourth quarter ended July 31.

Forgent gained the patent, No. 4,698,672 and issued in 1987, from its predecessor companys acquisition of Compressions Labs Inc. in the mid-1990s.

Licensing deals from the patent account for about 95 percent of Forgents revenues, though the Austin, Texas, company also run a smaller software-development operation focused on scheduling applications.

JPEG is a standard developed through the Joint Photographic Experts Group Committee, which in the past has attempted to discover prior art, a legal term for an earlier invention, to the patent.

Peterson said he expects the lawsuits, filed in U.S. District Court for the Eastern District of Texas, to be consolidated and to reach a trial in the next year to 18 months. The JPEG patent has yet to be tested in court.

Forgents patent licensing and lawsuits have raised the ire of patent-reform advocates. Jason Schultz, a staff attorney at the Electronic Frontier Foundation in San Francisco, said he is not surprised that Forgent is considering an expansion of its patent licensing program and said the company is one of a growing number of "shake-down operations."

"There are more and more of these types of patent-mill companies that apply for patents themselves or acquire them and pair up with contingency-fee lawyers and fire at will with lawsuits," he said.

/zimages/6/28571.gifClick here to read more about a series of patent-infringement lawsuits hitting major online retailers.

Peterson defended Forgents licensing and lawsuit attempts, saying the company has a responsibility to shareholders to defend its intellectual property. He also said Forgent has no plans to seek licenses directly from corporate or individual end-users of JPEG.

The three patents that Peterson said were most likely to be the next included in its licensing or enforcement plans are patent No. 5,933,597, issued in 1999; patent No. 6,650,701, issued in 2003; and patent No. 6,181,784, issued in 2001.

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