In its Order granting the request, the Patent Office found that
the Public Patent Foundation (PUBPAT) had raised "a substantial new
question of patentability" regarding every claim of US Patent
Number 4,698,672 (known as the '672 Patent).
The ‘672 patent is owned by Compression Labs Inc (CLI), which
applied for it in 1986, but never pursued royalties. Scheduling
software firm Forgent Networks subsequently acquired Compression
Labs and startled the computer industry in 2002 when it announced
that it would be seeking royalties relating to the JPEG patent.
JPEG is short for the "Joint Photographic Experts Group," which
comprises experts nominated by national standards bodies and major
companies to work to produce standards for continuous tone image
coding.
The best-known standard from JPEG is IS 10918-1, which is the
first of a multi-part set of standards for still image compression.
A basic version of the many features of this standard is what most
people think of as JPEG – and this is where Forgent is claiming a
monopoly right.
The company has so far licensed the patent to over 50 different
companies worldwide, and has pending litigation against around 30
more. Since its licensing programme began, Forgent says it has
generated more than $105 million in revenues, mostly from the '672
Patent.
In November PUBPAT announced that it had filed a re-examination
request with the USPTO, seeking to revoke the patent on the grounds
of prior art – that the feature being patented was already in the
public domain – and the USPTO has now agreed to the request.
"We are extremely pleased with the Patent Office's decision to
grant our request to re-examine the patent Forgent Networks is
using to threaten the JPEG standard," said Dan Ravicher, PUBPAT's
Executive Director.
"This is the first step towards ending the harm being caused to
the public by Forgent Networks' aggressive assertion of the patent,
which would never have been issued by the Patent Office if they had
known of the prior art that we submitted as part of our
re-examination request,” he added.
Richard Snyder, chairman and CEO of Forgent, predicted that the
patent would be found to be valid.
"We began investigating the '672 Patent in 2001 and have spent
more than three years enforcing our property rights. We have not
found any convincing arguments of invalidity, including the recent
claims, and as a result we are confident in the patent, and look
forward to an efficient re-examination,” he said.
