JPEG - Patent Issues

Patent Issues

In 2002, Forgent Networks asserted that it owned and would enforce patent rights on the JPEG technology, arising from a patent that had been filed on October 27, 1986, and granted on October 6, 1987 (U.S. Patent 4,698,672). The announcement created a furor reminiscent of Unisys' attempts to assert its rights over the GIF image compression standard.

The JPEG committee investigated the patent claims in 2002 and were of the opinion that they were invalidated by prior art. Others also concluded that Forgent did not have a patent that covered JPEG. Nevertheless, between 2002 and 2004 Forgent was able to obtain about US$105 million by licensing their patent to some 30 companies. In April 2004, Forgent sued 31 other companies to enforce further license payments. In July of the same year, a consortium of 21 large computer companies filed a countersuit, with the goal of invalidating the patent. In addition, Microsoft launched a separate lawsuit against Forgent in April 2005. In February 2006, the United States Patent and Trademark Office agreed to re-examine Forgent's JPEG patent at the request of the Public Patent Foundation. On May 26, 2006 the USPTO found the patent invalid based on prior art. The USPTO also found that Forgent knew about the prior art, and did not tell the Patent Office, making any appeal to reinstate the patent highly unlikely to succeed.

Forgent also possesses a similar patent granted by the European Patent Office in 1994, though it is unclear how enforceable it is.

As of October 27, 2006, the U.S. patent's 20-year term appears to have expired, and in November 2006, Forgent agreed to abandon enforcement of patent claims against use of the JPEG standard.

The JPEG committee has as one of its explicit goals that their standards (in particular their baseline methods) be implementable without payment of license fees, and they have secured appropriate license rights for their upcoming JPEG 2000 standard from over 20 large organizations.

Beginning in August 2007, another company, Global Patent Holdings, LLC claimed that its patent (U.S. Patent 5,253,341) issued in 1993, is infringed by the downloading of JPEG images on either a website or through e-mail. If not invalidated, this patent could apply to any website that displays JPEG images. The patent emerged in July 2007 following a seven-year reexamination by the U.S. Patent and Trademark Office in which all of the original claims of the patent were revoked, but an additional claim (claim 17) was confirmed.

In its first two lawsuits following the reexamination, both filed in Chicago, Illinois, Global Patent Holdings sued the Green Bay Packers, CDW, Motorola, Apple, Orbitz, Officemax, Caterpillar, Kraft and Peapod as defendants. A third lawsuit was filed on December 5, 2007 in South Florida against ADT Security Services, AutoNation, Florida Crystals Corp., HearUSA, MovieTickets.com, Ocwen Financial Corp. and Tire Kingdom, and a fourth lawsuit on January 8, 2008 in South Florida against the Boca Raton Resort & Club. A fifth lawsuit was filed against Global Patent Holdings in Nevada. That lawsuit was filed by Zappos.com, Inc., which was allegedly threatened by Global Patent Holdings, and seeks a judicial declaration that the '341 patent is invalid and not infringed.

Global Patent Holdings had also used the '341 patent to sue or threaten outspoken critics of broad software patents, including Gregory Aharonian and the anonymous operator of a website blog known as the "Patent Troll Tracker." On December 21, 2007, patent lawyer Vernon Francissen of Chicago asked the U.S. Patent and Trademark Office to reexamine the sole remaining claim of the '341 patent on the basis of new prior art.

On March 5, 2008, the U.S. Patent and Trademark Office agreed to reexamine the '341 patent, finding that the new prior art raised substantial new questions regarding the patent's validity. In light of the reexamination, the accused infringers in four of the five pending lawsuits have filed motions to suspend (stay) their cases until completion of the U.S. Patent and Trademark Office's review of the '341 patent. On April 23, 2008, a judge presiding over the two lawsuits in Chicago, Illinois granted the motions in those cases. On July 22, 2008, the Patent Office issued the first "Office Action" of the second reexamination, finding the claim invalid based on nineteen separate grounds. On Nov. 24, 2009, a Reexamination Certificate was issued cancelling all claims.