CYBERSPACE – Patent litigation and licensing is making news again, and while there has been little recent motion in Acacia Research’s case against alleged patent infringers in the adult industry, the intellectual property business as a whole is flourishing.Forgent, whose patent portfolio includes U.S. Patent No. 4,698,672 (commonly called “672”), has already collected in excess of $100 million in fees from licensees such as Adobe Systems, and Macromedia, according to reports on News.com. Forgent has pending license deals and lawsuits that could push their royalties from that single patent to over $1 billion dollars, and has initiated a separate lawsuit against 15 additional companies, claiming the right to collect royalties on digital video recorders (DVRs).

Another company that may stand to cash in on a web-related patent is Picture Marketing Inc (PMI), of Novato, California. Picture Marketing, whose products include mobile photo kiosks and the FotoZap® digital image distribution system, claims to hold a patent for embedding photos in electronic messages sent for marketing purposes. PMI has retained a former Microsoft attorney, and intends to pursue royalties from a wide variety of companies that send advertising emails containing pictures.

As is the case with Acacia’s patents, Forgent did not develop the 672 patent that they seek licensing fees and royalties from; the patent was obtained when Forgent acquired Compression Labs in 1997, and Forgent was apparently unaware of the patent’s implications until a 2002 review of their patent portfolio turned up the image compression method.

The description of the compression method did not refer to it by the name “JPEG”, which delayed the company’s discovery of the potentially lucrative patent. “If you told me 5 years ago that ‘You have the patent for JPEG’, I wouldn’t have believed it,” Forgent’s CFO Jay Peterson told News.com.

Advocates of such litigation maintain that enforcement of patents and intellectual property claims are crucial to protecting individual inventors and smaller companies from abusive infringement by large corporate entities. While Acacia and other intellectual property ventures point to the importance of the patent process in encouraging innovation, critics see the precise opposite taking place.

“People are writing patents to get in the way of other people’s progress,” Sam Jadallah, a partner at Mohr Davidow Ventures said in a News.com interview. “It is sucking R&D dollars out of the system.”