Patent demands may spur Unisys rivals in graphics market

Unisys is expanding its efforts to license the technology behind the Web's most popular graphics format, as it continues talks with major Internet portals to pay for the right to use so-called GIF files.

The company has successfully licensed its technology for years, but Web developers say it recently has become more aggressive in asserting its GIF patent, called LZW, targeting Web content companies and charging higher licensing fees.

Unisys' head patent counsel, Mark Starr, refused to discuss specifics of his company's licensing deals but confirmed that the company is in negotiations with Yahoo, Disney's Go.com and other Web companies regarding potential licensing for the technology.

"This isn't new," he said, noting that the company began looking at Web content companies in early 1999 and has been in talks with Yahoo for some time. "We have more than 2,000 licensees for this technology. There's been no recent shift in who we're enforcing the patent on."

Neither Yahoo nor Disney responded to requests for comment.

Whether there is anything new to Unisys' strategy, content companies in negotiations with Unisys for the first time may be close to embracing GIF substitutes, partly because of Unisys' licensing demands.

At least one Unisys licensee already has indicated that it plans to limit its use of GIFs, adopting a free alternative known as PNG (pronounced "ping") for distributing graphics files to customers. Accuweather, which sells meteorological data to news outlets and other organizations, said in a memo to its customers on Friday that the switch to PNG will take full effect May 12, although Accuweather will continue to hold the rights to use GIFs on its own Web site.

"We decided to change because it looks like things are going that way," said Brandi Say, the Accuweather customer service representative who authored the memo.

According to one person familiar with the companies' deal, Unisys had requested as much as $3.8 million under one licensing scenario that Accuweather rejected. Starr said Unisys is open to many licensing possibilities, from one-time payments to pay-as-you-go royalties, each with different rights and fees. He added that Unisys in recent years has made it easier and cheaper for companies to license its technology.

The company has owned the rights to the underlying GIF technology since 1985, but it began enforcing the patent belatedly, waiting more than 10 years to sign major software companies. Since then, Unisys has pushed its patent rights with software companies, Web site developers and content providers.

Starr said that Unisys in recent years has expanded its enforcement efforts

PNG (Portable Network Graphics) A lossless graphics file format developed as a patent-free replacement for GIF. advantages • file size: PNG files average about 30 percent smaller than equivalent GIF files and can download faster to a person's screen. • gamma correction: Provides the ability to control image brightness across platforms. • loss-free compression: Results in truer color, as GIF is limited to 256 colors. disadvantage • incompatibility: Poor standards support in browsers makes it difficult to implement on Web pages.

in response to developments in e-commerce and the Internet. But he said that process began some time ago, pointing out that Microsoft and America Online licensed its GIF technology around 1996.

Now Unisys is taking final advantage of its patent, which is set to expire in the United States in 2003. At the same time, alternative formats, such as PNG, may be closer than ever to winning broad acceptance.

Developed several years ago as an open-source graphics format, PNG has won support from standards groups and Web designers, but it has so far failed to catch on. With open-source technology, a network of programmers across the Internet can see and modify the original programming blueprints, or "source code," of a program.

Still, barriers to PNG adoption have been dropping recently with support from Web browser developers. The latest versions of Microsoft's Internet Explorer for Macintosh and AOL's Netscape Navigator are compatible with PNG, and Mozilla.org--the unit founded by Netscape Communications to handle the open-source development of the Communicator browser--is expected to offer PNG support in future versions of its browser.

As a result, some Web developers see a potential change in favor of PNG in the next year or two.

Greg Roelofs, who maintains the official PNG Web site, said there are many encouraging signs for the format. But he added that there is still a long way to go. As far as he knows, he said, most large companies haven't made the switch.

"They've all either got appropriately licensed software or else are too big for Unisys to bother, and they don't want to alienate even the (small?) fraction of customers still using non-PNG-supporting browsers (3.x or earlier)," Roelofs wrote in an email interview.

Unisys' licensing efforts previously have been in the spotlight.

Last August, the company sparked protests across the Web by announcing that individuals running noncommercial sites might in some cases be required to license its GIF technology for a $5,000 fee. Protesters organized a "burn all GIFs day" and began promoting alternative technologies unencumbered by patents, such as PNG.

Unisys' Starr said the announcement was an attempt by the company to simplify and reduce the costs of its licensing requirements. Since the new policy was implemented, he said the company has signed only one of the controversial $5,000 agreements.