A RECENTLY-announced decision by Unisys to enforce its patent rights to the compression technology used in a popular PC image file format may have costly repercussions for local on-line service providers.
Unisys owns a patent on the Lempel Zev Welch (LZW) compression technology which is a core component of CompuServe's .GIF format. The format has been in use since the late 1980s to produce small-size bitmap image files primarily for storage on on-line services.
CompuServe has made the .GIF format freely available as long as programs which can display, manipulate or produce .GIF files contain a two line acknowledgement. As a result, the .GIF format has become a de facto standard in the on-line industry.
In 1990, however, Unisys discovered that LZW was being used by programs that use .GIFs and entered into negotiations with CompuServe.
The result is an agreement that came into force last week requiring CompuServe to pay Unisys a licence fee of one per cent of the price of any software using LZW it distributes.
At the same time, CompuServe is able to sub-licence the LZW technology to producers of software for accessing and using only CompuServe. The on-line service is issuing these sub-licences at 1.5 per cent of the price of the software.