Forgent Networks has initiated a suit against Microsoft for allegedly infringing on its compression patent known as “The ‘672 Patent“. Microsoft had originally filed a complaint seeking a declaratory judgment “noninfringement, invalidity and unenforceability of the ‘672 Patent.” Forget’s complaint stems from Microsoft’s use of the compression technology in the popular JPEG image format.
The patent was originally granted to Compression Labs, Inc., in October 1986. It did not seek royalties while it held the patent. Compression Labs and the patent were acquired by Forgent Networks in 1997. In 2002, Forgent announced that it would seek royalties and license the technology. Two years later, in April 2004, they followed through on their threat and sued 44 companies including Apple, Adobe, Dell, HP and IBM.
Microsoft is likely to receive rare support from the rest of the industry in this dispute. The disputed patent expires October 27, 2006.
The Forgent Network press release:
“Forgent intends to vigorously pursue its claims for patent infringement against Microsoft. We believe we will prevail in this action as the ‘672 Patent is valid, enforceable and infringed by Microsoft,” said Richard Snyder, chairman and CEO of Forgent. “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 assert infringement claims against it. We are committed to the intellectual property program, and our objective remains to protect our intellectual property assets from infringement, and where appropriate to collect a reasonable royalty fee, thus maximizing shareholder value.”
Since its inception three years ago, Forgent’s intellectual property program has generated more than $100 million from licensing the ‘672 Patent to more than 35 different companies in Asia, Europe and the United States. Forgent has also initiated litigation against 44 companies for infringement of the ‘672 Patent in the United States District Court for the Eastern District of Texas, Marshall Division. In February of 2005, the Judicial Panel on Multidistrict Litigation (”MDL Panel”) ordered that these actions arising out of the infringement of Forgent’s still-image compression technology, embodied in the ‘672 Patent, be transferred to the United States District Court for the Northern District of California. Subsequent to filing the litigation, four companies have entered into license or settlement agreements.
Microsoft’s pre-emptive suit:
Microsoft filed a lawsuit on April 15, 2005 claiming that the Jpeg patent is invalid, and suggesting that Forgent fraudulently obtained the patent by failing to disclose “prior art.” Prior art is a legal term indicating that the patent holder was not the first to invent the technology covered by the patent.
Eric Anderson at 3:35 pm
