In its Order granting the request, the Patent Office found that the Public Patent Foundation (PUBPAT) had raised "a substantial new question of patentability" regarding every claim of US Patent Number 4,698,672 (known as the '672 Patent).
The ‘672 patent is owned by Compression Labs Inc (CLI), which applied for it in 1986, but never pursued royalties. Scheduling software firm Forgent Networks subsequently acquired Compression Labs and startled the computer industry in 2002 when it announced that it would be seeking royalties relating to the JPEG patent.
JPEG is short for the "Joint Photographic Experts Group," which comprises experts 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 multi-part 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 Forgent is claiming a monopoly right.
The company has so far licensed the patent to over 50 different companies worldwide, and has pending litigation against around 30 more. Since its licensing programme began, Forgent says it has generated more than $105 million in revenues, mostly from the '672 Patent.
In November PUBPAT announced that it had filed a re-examination request with the USPTO, seeking to revoke the patent on the grounds of prior art – that the feature being patented was already in the public domain – and the USPTO has now agreed to the request.
"We are extremely pleased with the Patent Office's decision to grant our request to re-examine the patent Forgent Networks is using to threaten the JPEG standard," said Dan Ravicher, PUBPAT's Executive Director.
"This is the first step towards ending the harm being caused to the public by Forgent Networks' aggressive assertion of the patent, which would never have been issued by the Patent Office if they had known of the prior art that we submitted as part of our re-examination request,” he added.
Richard Snyder, chairman and CEO of Forgent, predicted that the patent would be found to be valid.
"We began investigating the '672 Patent in 2001 and have spent more than three years enforcing our property rights. We have not found any convincing arguments of invalidity, including the recent claims, and as a result we are confident in the patent, and look forward to an efficient re-examination,” he said.
