Unisys Changes GIF Licensing Policy

Unisys Corp. has confirmed a change in its policy of collecting
licensing fees on a patent that affects users of the popular GIF digitized image format.

Unisys holds a patent on LZW, which is an algorithm used
to create GIF files.

The company is now asking Web developers to determine whether the image
software they’re using to create GIFs has properly licensed the technology
from Unisys. If not, the company is requiring the sites to pay a
one-time fee of $5,000.

According to Unisys’ chief patent counsel Mark Starr, the company has no way of determining whether GIFs at a site have been created using software without a LZW license. But Unisys is contacting sites it believes may be in violation.

“Are we sending a letter out to every Web site — obviously not,” said Starr. “We’re focusing on the larger Web sites and portals, which are using these technologies that are clearly unlicensed.”

According to Starr, a number of well-known Web sites are currently in
violation of Unisys’s patent.

The $5,000 licensing fee is actually less than Unisys had previously
been seeking. In the past, the company had been charging Web developers
$1,500 per year.

About five years ago, Unisys negotiated a licensing
arrangement with Compuserve, which owns the patent on the GIF format.

Under the deal, CompuServe pays a royalty fee of 1 percent whenever it collects a fee from software developers who write programs that use the GIF format. This latest development has some Web developers up in arms.

A group of them plan to gather at Unisys headquarters in Pennsylvania next month. There, demonstrators plan to burn print-outs of GIF images from their sites to protest the fees.

Protest organizer Don Marti said the time is right to abandon the GIF format despite its backwards compatibility with older browsers and to move exclusively to new formats such as JPEG and PNG.

Marti accused Unisys’s legal department of trying to become a revenue generator for the comapny.

“They’re competing with a guy who just sold the snow plow off of the front of his truck who got his MCSE; so they’re kind of scraping the bottom of the barrel for anything they can use to squeeze some money out of the Web revolution that they kind of missed in the company,” said Marti.

“So if they can milk Web sites for some revenues for this old patent all they can do is treat Unisys as an annoyance and route around it.”

Starr defended the company’s decision.

“This is life. The United States is driven by entrepreneurs and entrepreneurs are getting legal guards to protect their innovations and when somebody else uses their innovations, they’re enforcing it.

“And in the case of Unisys we felt we had an obligation to our shareholders to be compensated for our innovations and, frankly, this most recent change in our policy is in response to requests we received and carefully debated. My position is that we benefited — we’ve reduced the fees.”

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