Forgent Hits Microsoft in Patent Battle

Forgent Networks , the company that owns the patent on JPEG, has broadened the scope of its licensing push, and it has the world’s biggest software vendor in its sights.

On Friday, Forgent said it sued Microsoft for patent infringement in the United States District Court for the Eastern District of Texas.

The company said it filed the suit after Microsoft went to court on April 15 to ask for a declaratory judgment that it didn’t infringe the Forgent patent — and that the patent was invalid and unenforceable anyway. Microsoft declined a request for comment.

“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,” Forgent Chairman and CEO Richard Snyder said in a statement.

Forgent, a vendor of scheduling software, acquired U.S. Patent No. 4,698,672, awarded Oct. 6, 1987, along with San Jose, Calif.-based Compression Labs, a company it bought in 1997. Compression Labs was awarded the patent in 1986, but never collected royalties or asserted its rights — and neither did Forgent until 2000, when it began to look around for new sources of revenue.

In 2002, the company inked a deal with Sony . According to Securities and Exchange Commission (SEC) documents, Sony paid $15 million to Forgent for the right to use JPEGs.

Almost exactly one year ago, Forgent sued 31 companies, including Adobe Systems , Apple Computer , Concord Camera , Gateway , HP , Kyocera Wireless, PalmOne and Xerox .

Following the suit, Adobe took out a license. Sanyo, Samsung and Nikon are among the 34 other companies Forgent said had licensed its IP to date. Forgent said its IP licensing program has generated more than $100 million, while the number of companies being sued has grown to 44.

Although the patent expires in 2006 in the U.S. and 2007 in Europe, the company also demands payments for past infringement, according to Michael Noonan, director of investor relations for Forgent.

“Obviously, we could have claims back to 1987,” Noonan said, “but in reality, JPEGs weren’t in use until the mid-90s.” So, Forgent is suing Microsoft for past infringement only dating to the late 1990s.

Noonan said that Forgent would accept whatever the court awarded as reasonable fees and damages.

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