JPEG Patents and Yahoo!

Rich Tehrani : Communications and Technology Blog - Tehrani.com
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JPEG Patents and Yahoo!

Patents have become huge in the computing industry. I thought my Rates Technology vs. Google Patent Troll post from earlier today was the end of the patent news for today. Boy was I wrong. I just learned that Yahoo! Has paid for the ability to post JPEG files on the Internet.

Forgent Networks announced Thursday that it has signed a deal with Yahoo to license its patented technology for posting digital images on the Internet.

The Austin-based company holds patent No. 4,698,672, the coding behind the JPEG compression technology. Nicknamed '672, it's the most widely used technology for storing photos in digital cameras, printers, scanners and personal computers on the Internet.

Forgent has collected more than $105 million in licensing fees from the patent from 50 companies including Casio, Olympus and Nokia since it began enforcing its patent four years ago. Forgent also develops scheduling software, but the bulk of its revenue now comes from patent enforcement activity.

The Forgent case is also a trend in the technology industry of "patent mining," with NTP and Research In Motion, the provider of the popular BlackBerry wireless e-mail and paging services, being the most high-profile case lately. The two companies are negotiating to resolve the patent dispute, but a jury has found that BlackBerry has infringed on NTP's patents for wireless communication.

Patent enforcement happens in all industries, and the latest slew of technology patents is not unusual, said Robert J. Tosti, patent attorney and partner in Edwards Angell Palmer & Dodge LLP in Boston. Some companies, such as Forgent, have formed business models around pursuing licensing arrangements for existing patents, but there are not many of them, Tosti said.

"It may be that they found a Rembrandt in the attic," Tosti said.

Forgent began enforcing its portfolio of technology patents in 2001 and got its first deal with Sanyo for $15 million, and then Sony for $16 million.
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