updated 2/2/2006 7:34:38 PM ET 2006-02-03T00:34:38

Technology company Forgent Networks, Inc. was served notice Thursday that the U.S. Patent and Trademark Office will re-examine the validity of its patent on a widely used compression method for storing digital photos and images.

The patent deals with compressing digital video, and the company insists its techniques are the same ones used as part of the common compression standard known as JPEG, issued by the Joint Photographic Experts Group.

During the past three years, Forgent has generated about $105 million from licensing U.S. Patent No. 4,698,672, obtained when it acquired Compression Labs, Inc. in 1997. The patent was issued in 1987 and expires in October.

In 2004, Forgent sued 31 companies, including some the high-tech industry's largest players, claiming patent infringement. The case is pending in a California U.S District Court.

The request for re-examining the validity of the 672 patent was filed in November by the Public Patent Foundation, Inc.

The New York-based not-for-profit called Forgent's practice of reaping millions of dollars from companies who use the JPEG format a "campaign of harassment" that is causing "significant public harm by threatening the JPEG standard on which the public relies."

"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, the group'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."

In more than three years of enforcing its intellectual property rights, Forgent has never found any evidence that its patent was invalid, CEO Dick Snyder said.

"We are confident in the patent, and look forward to an efficient re-examination," he said. "Forgent has deep technology roots and is committed to protecting and developing all of its assets and intellectual property to maximize shareholder value."

Last summer, Forgent sued EchoStar Communications Corp., Motorola Inc., and 13 other companies for their alleged infringement of another patent it owns relating to how digital video recorders allow playback during recording. An initial hearing in that case is set for July in U.S. District Court in Marshall.

About two-thirds of Austin-based Forgent's 30 employees work for the company's software division, which makes a scheduling and meeting program called NetSimplicity.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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