Although best known only as an image format, JPEG is actually short for the "Joint Photographic Experts Group". The experts in the Group are 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 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 a monopoly right is claimed.
Compression Labs applied for the patent in 1986. The company did not initially pursue royalties. But in 1996, part of its business was acquired by General Instruments Corp., which itself was later acquired by Motorola. The remainder of Compression Labs was sold in 1997 to a company called VTEL which, in 2001, changed its name to Forgent Networks. Forgent then startled the computer industry in 2002 when it announced that it would be seeking royalties relating to digital image compression.
Over the last two years, the patent has been licensed to 30 different companies in Asia, Europe and the US, generating around $90 million in fees, while in April, enforcement action was taken against 31 computer companies, including IBM, Apple and Gateway.
According to Bloomberg News, the industry has now hit back, suing both Forgent and General Instrument Corp. over the actual validity of the patent.
The suit alleges that Forgent and General Instrument Corp. are "attempting unlawfully to subvert the JPEG standard and to extract hundreds of millions of dollars in unwarranted profits", according to Bloomberg.
The validity of the patent has been questioned before. In July 2002, a JPEG committee examined the patent and announced that it believed prior art existed in areas in which the patent claims to apply, i.e. the technology was in use before the patent existed.