April 8, 2005 4:00 AM PDT

Patent litigants target DVRs

Forgent Networks, which has so far garnered more than $100 million in fees on its so-called JPEG patent, is going after the digital video recorder industry.

The Austin, Texas-based maker of licensing and scheduling software owns four patents it claims give it the right to collect royalties on computers or similar devices, such as those made by market leader TiVo, that record, store and play back video- and audio-transmitted signals.

While three of the patents primarily involve videoconferencing systems, patent No. 6,674,960 specifically addresses recording television signals to a computer.

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What's new:
Forgent Networks, which has netted more than $100 million dollars in fees on its so-called JPEG patent, holds additional patents that it says give it rights to royalties on DVR technology.

Bottom line:
It's unknown whether patents held by others predate Forgent's claims, which would thereby invalidate them. But Forgent's DVR patent plans could potentially roil a good number of tech companies.

More stories on DVR technology

The patents also predate patents and other intellectual property owned by other companies, Forgent Chief Financial Officer Jay Peterson said in an interview.

"You'll see activity on the DVR (digital video recorder) patents in the next three to nine months," he said. "We've got an early file date."

The patents haven't been tested in court, and it's unknown whether patents held by others predate Forgent's claims, thereby invalidating them. Nonetheless, Forgent's plans, considering the company's history, will likely roil a large swath of tech companies, as well as invigorate the rancorous debate between intellectual-property activists and patent holders.

The popularity of DVRs has made TiVo a household word--and a constant topic of takeover discussions on Wall Street--in just a few short years. DirectTV, Comcast and other broadband companies also offer DVR services, making them potential licensees, or defendants.

The computer industry has also jumped into the DVR game with Microsoft's Windows XP Media Center multimedia software. Nearly every major PC maker sells a unit with that version of Windows.

Still, DVR shipment numbers remain relatively small compared with PCs, which reached a record 177.5 million units in 2004, according to IDC. DVR shipments in the United States totaled 4.4 million in 2004, and the market is expected to grow to 10.7 million by 2008, according to research firm IDC.

The popularity of DVRs and the fanaticism of their owners currently far exceeds estimates of the size of the market for the technology. Shipment numbers may increase as cable and satellite giants duke it out for subscribers using DVRs, but video on demand is another programming tool that service providers will use in addition to DVRs.

The problem with patents
When it comes to DVR patents, enforcement is still somewhat up in the air. Many of those in the market are watching a case between two of the early DVR entrants: TiVo and EchoStar. The companies have been embroiled in a patent infringement case since January of last year.

While the applicability and viability of the DVR patents have yet to be determined by a court, one subject that will likely be a major issue of discussion is the date of Forgent's patents. The U.S. Patent and Trademark office granted the company's four patents in 2001 and 2002; the patent applications were all filed in 2000 and 2001.

The applications, however, derive from earlier, abandoned applications that stretch back to May 1991. Compression Labs, which Forgent acquired in 1997, filed the original applications.

TiVo filed the applications for some of the primary patents in 1998. The company has a number of patents, and recently acquired some from IBM. "Prior art" invalidates subsequent patents.

TiVo representatives declined to comment for this story.

The expense, scope and potential liability of patent and intellectual-property litigation has prompted calls for patent reform from a number of parties, although concrete solutions seem hard to come by. Some have called for an end to patents on software. Others have said that patent offices need to provide a method for early dispute resolution and better patent screening.

"The real issue is that we should only grant patents for truly new and nonobvious inventions," said Adam Jaffe, dean of Arts and Sciences at Brandeis University and co-author of "Innovation and Its Discontents: How Our Broken Patent System Is Endangering Innovation and Progress, and What to Do About It." "More examiners are needed at the patent office," Jaffe said.

Anatomy of a patent
If anything, Forgent has the wallet to put up a fight. Approximately four years ago, the company reviewed its patent portfolio and came across U.S. patent No. 4,698,672 awarded to Compression, which purportedly gave the company a patent on a method for compressing motion (that is, video) or still files.

Initially, Forgent tried to sell the patent to Compaq Computer to give it a counterclaim in its suit against MPEG LA, which revolved around motion compression patents. The deal fell through and Forgent more closely examined its claims

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9 comments

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Not more examiners...
What's needed is a public review process so that people of the public can review and contest the patent administratively both before and after it is granted.

TiVo is essentially a file system or database (the two are different ways of representing the same concept) that stores video files. It is obvious that you can compress and store video files on disk, and I believe that MPEG-2, and know for a fact MPEG-1, predate 1991, so there's certainly prior art.

We need an administrative process that doesn't require lawyers, etc. to challenge these sorts of patents.
Posted by tharcod (22 comments )
Reply Link Flag
Patent fights are curious things...
The listed Forgent patent seems to be one more example of
people trying to patent either an obvious concept, or a concept
already implemented. The fundamental criteria for a patent are
'new' and 'unique', and the Forgent patent completely fails both
until you get to the microscopic application claims. and there,
even Forgent noted that the application possibilities are obvious
to generally qualified people.

I think that the Patent Office needs to quit handing out patents
like aspirin and start focusing on serious evaluations of all
applications. So far, they haven't evaluated hardly anything.
Check the drup patents for an oversupply of proof.
Posted by Earl Benser (4310 comments )
Reply Link Flag
You have to be kidding?!?
I can't believe that company's have the gull to file for a patent years after a company has a product out! The Patent says it was filed in 2002 TiVo has been out since like 98-99. Just ticks me off!
Posted by ryan.steele (42 comments )
Reply Link Flag
Tis the new coin of the realm.
Its been talked about for some time now. This is going to be how some companies make money, by going after those that did what they couldn't.

Xerox ought to sue Apple for their "obvious" rip-off of their old integrated computer system.

NWLB
****
<a class="jive-link-external" href="http://www.nwlbnet.blogspot.com" target="_newWindow">http://www.nwlbnet.blogspot.com</a>
Posted by NWLB (326 comments )
Reply Link Flag
Forgent Sounds Like a Leech
So let me get this straight: said company, namely Forgent, files patents, does nothing with them, waits until someone comes out with a product that remotely resembles Forgent's "patents", then Forgent strong-arms the companies who are being innovative and productive for royalties?

Forgent sounds like nothing more than a leech. Must be a great business: let's go into the office today and see who we can sue.

Creeps.
Posted by (274 comments )
Reply Link Flag
What goes around.....
Although I can't stand the patent process and feel that the abuse of it is stifling innovation, I can't really feel sorry for Tivo.

It looks like they are about to get a taste of their own medicine.

Full disclosure: I own a Tivo.
Posted by Homer J. Simpson (9 comments )
Reply Link Flag
Fix the patent system ?
Easy :
- When a patent attack is lost, the patent owner should pay the defendant fees (would stop most frivolous patent lawsuits while not hurting valid ones)
- Patent examiners should be real professionnals in the field, able to distinguish the gems among trivial claims (for that to happen, they need to be paid more, not from public funds, but from those who apply for patent protection).
- the USPTO (and similar offices all around the world) should be legally accountable when they accept frivolous patents
- When a patent lawsuit arises, a patent review by the issuing body should be mandatory, before the court can proceed.
- Patent application should not be kept secret until accepted
- Participation in a technical commitee should automatically void patents issued later on the standards created by said commitee (prevent "midnight patent")
- Hiding relevant prior patent application while participating in a technical commitee should automatically void said patents (prevent "Rambus DDR" patents)
- Just like trademarks, patents should become unenforceable if the holder fail to warn known potential infringers (prevent GIF style late claims)
- A patent not used by it's inventor should loose it's offensive power after a short period of time (can't attack others for using something you patented but you're not using).
- More difficult : create different classes of patents depending on their merit &#38; the applicable field (different protection length)
- When a patent holder have claims on more than one patent against a defendant, he should be forced to merge all the claims about all of his patents at once, instead of being allowed to launch lawsuits one after another
- outlaw "evergreening" (last minute "new uses" for patents about to expire)
- Software patents should be either eliminated or severely restricted since the appropriate protection for software exists in copyrights laws.
- "composite" patents that simply put two already known techniques together should not be accepted. Only the way to "glue" them should be acceptable, if non trivial / not obvious / not overly broad.

If only half of these proposals was implemented, the system would return to sanity, but it's unlikely since patents are an anticompetitive tool used mostly to ensure the issuing country's domination in the field rather than the neutral inventor rewarding system it's supposed to be.
Posted by My-Self (242 comments )
Reply Link Flag
Your solutions.
- "When a patent attack is lost, the patent owner should pay the defendant fees (would stop most frivolous patent lawsuits while not hurting valid ones)"

In many cases, they probably do. In virtually every civil case, there exists the possibility of one side being ordered to pay the other's legal fees. It simply isn't a sufficient deterrent, however, and the risk-return formula still favors trying, even on frivolous cases, since there seem to be enough wins.

- "Patent examiners should be real professionnals in the field, able to distinguish the gems among trivial claims (for that to happen, they need to be paid more, not from public funds, but from those who apply for patent protection)."

This *is* how it works, or how it is already supposed to work. The patent office has lots of engineers and other highly qualified people, but they lack enough software experts, are understaffed, and plagued by an old IT infrastructure that makes it difficult for examiners to find prior art. This desperately needs to be fixed.

- "the USPTO (and similar offices all around the world) should be legally accountable when they accept frivolous patents"

Not a bad idea, actually. Except, of course, that we pay the taxes that would fund their defense and any rewards they would pay, and it would diminish their budget and ability to do things right. . .I suppose it really isn't that good an idea, after all.

- "When a patent lawsuit arises, a patent review by the issuing body should be mandatory, before the court can proceed."

This one makes sense. The review should be done better the first time, however--the current process relies too much on the applicant both being honest and doing his own homework finding the prior art that could invalidate his own patent--now, why would someone do that?

- "Patent application should not be kept secret until accepted"

Agreed on this point. Companies should be given a chance to submit possible prior art. Still, it doesn't matter unless they are released to the public in a way that makes them easily accessible.

- "Participation in a technical commitee should automatically void patents issued later on the standards created by said commitee (prevent 'midnight patent')"

Fully agreed, unless, of course, the committee itself applied for the patent--this option should remain open for committees to file patents as a defense against possible lawsuits.

- "Hiding relevant prior patent application while participating in a technical commitee should automatically void said patents (prevent "Rambus DDR" patents)"

Agreed. That's just a dirty trick.

- "Just like trademarks, patents should become unenforceable if the holder fail to warn known potential infringers (prevent GIF style late claims)"

I don't know about this one--maybe if it can be proven that they did it willfully, but I don't think this is necessary.

- "A patent not used by it's inventor should loose it's offensive power after a short period of time (can't attack others for using something you patented but you're not using)."

I would offer this alternate suggestion, similar to a good idea posed for copyrights; use a renewal system. For patents, I would make it yearly. If the patent holder doesn't care enough to pay a $5-10 fee to renew it yearly, then they shouldn't be holding it. For copyrights, I say twenty years is better because of their longer durations and the different nature of what they protect.

- "More difficult : create different classes of patents depending on their merit &#38; the applicable field (different protection length)"

Not a bad idea, but I think your later suggestion is better. It may simply have been a bad idea to make software patents legal in the first place, and eliminating them may be the better option. We need to consider the benefit to society for these patents outweighs the cost to society; the benefit to the holders shouldn't be the concern. I think the cost has long past outweighed the benefit.

- "When a patent holder have claims on more than one patent against a defendant, he should be forced to merge all the claims about all of his patents at once, instead of being allowed to launch lawsuits one after another"

Kind of like protection against double jeopardy? Maybe, but this would only be good where the patents were highly similar in the first place, and the fact that many patents are so similar is a symptom of the broken process. Patents are supposed to be novel, unique, and non-obvious--the fact that four separate patents are involved in this suit tells me that isn't happening. There should only be *one* related to JPEG-style image compression, if that. If that gets fixed, this step wouldn't be necessary.

- "outlaw 'evergreening' (last minute 'new uses' for patents about to expire)"

Wow. I hadn't heard about this. It seems to be the spirit of patent law should already prohibit this--again, the inventions must be novel, unique, and non-obvious. New uses for existing inventions seems to violate most of these. I also remember reading that obvious combinations of existing inventions are not supposed to be patentable, so it seems like this should prevent this practice as well. I would say it isn't because the patent office is sloppy, especially on software.

- "Software patents should be either eliminated or severely restricted since the appropriate protection for software exists in copyrights laws."

I've long since agreed on this one. Software has become too much of a legal quagmire--a cesspool of legality, if you ask me. I don't see how creating the risk of blinding stumbling over someone else's patent, or look-and-feel, or whatever else the courts and Congress have messed up for us programmers is supposed to aid innovation. Wouldn't a feeling of freedom and security be more productive to developers than this mess? I certainly think so.

- "'composite' patents that simply put two already known techniques together should not be accepted. Only the way to "glue" them should be acceptable, if non trivial / not obvious / not overly broad."

These already shouldn't be accepted, if I understand the law properly. Clearly, unqualified examiners are letting these slide through, at least in the software arena.

"If only half of these proposals was implemented, the system would return to sanity, but it's unlikely since patents are an anticompetitive tool used mostly to ensure the issuing country's domination in the field rather than the neutral inventor rewarding system it's supposed to be."

I'm beginning to think you're right, but even with this, they seem to do more harm than good, at least in quickly developing technologies.

At the very least, I think their length is too long. The same can be said for copyrights. Patent terms should only be about 5 to 10 years; perhaps patent examiners should be given the power to set the patent's length based on the state of the particular industry, but obviously the problems of understaffing and inadequate expertise would have to be fixed first, or this would probably only worsen the problem.

At any rate, I can say this much: either fix software patents, or make software unpatentable. One of these solutions needs to be done soon.
Posted by (282 comments )
Link Flag
Patent
I think that if a patent is filed incorrectly the patent should stand. Then those who are wronged should sue the patent office. Oh, I know it won't work, but it sure would be funny to see the patent office get hit with thousands of lawsuits because they can't do their job right.

On the other hand the patent office is probably understaffed and overpaid. Maybe it's time to do away with patents all together. So I suppose solution #2 would be to pester, er I mean lobby you local congress person till they do away with patents.

I don't think that the fair market place has ever been fair, but know the way to make a buck is to sue someone over a vague idea. I think patents are like reading nostradamus. It only really make sense after something has happened.

Here are three things our government needs to get rid of...
1. Patriot Act.
2. DMCA
3. Patents

This list could go on for days, but those to me are the most problematic for the tech industry.

Unfortunatly I don't have the answer, but I do have ideas (unless somebody has patented it). It ain't much, but when you put together my ideas with yours we might just start to see a picture. We are a country of the many so why are we led by the few?
Posted by System Tyrant (1453 comments )
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