I posted my dilemna to 3 lists, witango, RB, and Quicktime. I
received some advice from an EXTREMELY knowledgable person from the
quicktime list, who is a business consultant, dealing with
intellectual property every day. I am posting his response because I
think it a valuable opinion, that other developers may find handy. I
am purposely removing his identity. Also, the patent expires in 2006,
not 2004.
[Several points, numbered for discussion and reference (remembering that
that this is only business discussion):
-1-
The Inavisis letter, as posted at
http://www.shaftek.org/standardsblog/attachments/2005/05/inavisis/
inavisis_l
etter.html
is a typical "stick licensing" letter. However, it is kind of
unusual to
be coming from an IP consulting company like Inavisis (who does
valuation,
license structuring/negotiation, strategy, processes, etc) as opposed to
the law firm.
-2-
Related to above, one attorney mentioned that if the case is untenable
- which it probably is - no law firm has any egg on its face. Inavisis
has no downside in taking a shot at revenue.
-3-
Yes, the "use" here could be argued to extend to even to an end-user
looking at a JPEG, BUT (1) that is a stretch made clear in SCO v "the
world" regarding Linux that is NOT favorably seen by courts or juries
(from a defendant-side attorney familiar with ND-CA), and (2) if the
code
you call is made/provided by a licensee of the patent,
http://www.shaftek.org/standardsblog/attachments/2005/05/inavisis/
inavisis_l
icensee_list.html
you (and even the end user) would have a very strong argument that as
a licensee of that code (even if it is silent on patent rights) that
you have an IMPLIED license to "use" the patent.
-4-
Damages (if it got to litigation) would probably be based on a notion
of what a "willing licensee" would pay in royalties to a "willing
licensor" of the patent in theoretical licensing/royalty negotiation.
(BTW, I have served as expert witness on such valuation/damages). Many
factors would point to a worst case royalty figure that would probably
be near 2% of your revenue from products, or (depending on a better
analysis of your business model) 1% or less of your revenue
from services. But, the legal costs of getting that far could kill
you. Importantly, this plays, though circularly, to Forgent's BATNA
(best alternative to negotiated agreement) in any current conversation
you might have with them or with Inavisis. They *could* get whatever
royalty that calculates out to (with no chance of 'willful' bonus)
MINUS the legal costs and expenses. So, assuming you have good counsel
and negotiator to stay below their BATNA, you can calculate a reasonable
projection of their reward for a low-probability fight.
-4-
The expiration date of THIS patent (4,698,672) is October 2004, so:
- no way to get an injunction on your making, delivering or servicing
- damage period is from 6 years ago though October 2004
- (Biggie, from a defendant-side IP attorney) plaintiff would be asked
why they waited so long to claim infringement and/or file; absent
an amazingly creative argument, an estoppel argument (they missed
the window) would have them pound sand
-5-
Based upon everything in the back of my mind, if we were sitting in a
bar,
over a drink, I would say simply do not answer the letter at all - AND
talk with your attorney at O'Melveny.]
--
Robert Garcia
President - BigHead Technology
VP Application Development - eventpix.com
13653 West Park Dr
Magalia, Ca 95954
ph: 530.645.4040 x222 fax: 530.645.4040
[EMAIL PROTECTED] - [EMAIL PROTECTED]
http://bighead.net/ - http://eventpix.com/
On Jul 20, 2005, at 5:09 AM, Robert Garcia wrote:
I have been sent letters, and have been phoned about software that
I have written that compresses images using JPEG format. They want
percentages of revenue from the companies using the software.
Some background info:
http://www.shaftek.org/standardsblog/2005/04/27/the-never-ending-
jpeg-patent-saga/
http://www.forgent.com/
The company contacting me is Inavisis.
I heard about Sony and Adobe buckling and paying the license, and
MS and Apple fighting. I was wondering if anyone has done more
research on this kind of thing, like the Unisys GIF issues before.
I know, if the JPEG patent is valid, I am violating it by using
open source JPEG libraries to compress images, like ImageMagick.
But if I use calls to the host operating system, or an API like
Quicktime, would I still be violating the patent?
It has always been my understanding, if a library like Quicktime,
allows me to save to a particular format, I am in compliance, cuz
Quicktime has the responsibility of being in compliance with licenses.
If anyone has any info, I think this is a good topic of discussion,
cuz if I got on their radar, others will too. And then I guess I
will have to write my own utilities for the webservers to
manipulate images, using quicktime. My desktop software too.
--
Robert Garcia
President - BigHead Technology
VP Application Development - eventpix.com
13653 West Park Dr
Magalia, Ca 95954
ph: 530.645.4040 x222 fax: 530.645.4040
[EMAIL PROTECTED] - [EMAIL PROTECTED]
http://bighead.net/ - http://eventpix.com/
--
Robert Garcia
President - BigHead Technology
VP Application Development - eventpix.com
13653 West Park Dr
Magalia, Ca 95954
ph: 530.645.4040 x222 fax: 530.645.4040
[EMAIL PROTECTED] - [EMAIL PROTECTED]
http://bighead.net/ - http://eventpix.com/
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