PUBPAT wrote a good press release explaining most everything. The charge of inequitable conduct (they knew of the prior art, but didn't cite it) does make the situation more dicey.

In the reexamination proceeding initiated late last year by the Public Patent Foundation ("PUBPAT"), the United States Patent and Trademark Office has rejected the broadest claims of the patent Forgent Networks (Nasdaq: FORG) is asserting against the Joint Photographic Experts Group (JPEG) international standard for the electronic sharing of photo-quality images. In its Office Action released yesterday, the Patent Office found that the prior art submitted by PUBPAT completely anticipated the broadest claims of the patent, U.S. Patent No. 4,698,672 (the '672 Patent).

Forgent Networks acquired the '672 Patent through the purchase of Compression Labs, Inc. in 1997 and began aggressively asserting it against the JPEG standard through lawsuits and the media in 2004. The company has the opportunity to respond to the Patent Office's rejection, but third party requests for reexamination, like the one filed by PUBPAT, result in having the subject patent either modified or completely revoked roughly 70% of the time.

"The Patent Office has agreed with our conclusion that it would have never granted Forgent Networks' '672 patent had it been aware of the prior art that we uncovered and submitted to them," said Dan Ravicher, PUBPAT's Executive Director. "Making matters worse here is that this new prior art was known by those who filed the application that led to the '672 patent, but none of them told the Patent Office about it, despite their duty to do so."

More information about the reexamination the Forgent Networks patent being asserted against the JPEG standard, including a copy of the Patent Office's Office Action rejecting its broadest claims, can be found at http://www.pubpat.org/Protecting.htm.

Here's Patent Prospector's previous snide reportage of the JPEG reexam: Groundhog Day 2006; November 16, 2005. A tip of the hat to PUBPAT's Dan Ravicher for fighting the good fight, and getting results.

Over 40 companies have paid-up licenses for the JPEG patent, but not Microsoft, who chose to make a stand.