CompuServe GIF License & Royalties Raises Hackles COLUMBUS, OHIO, U.S.A., 1995 JAN 4 (NB) -- On-line giant CompuServe has sparked controversy on the Internet by offering a $1-plus-royalties license for developers to use its previously free GIF (Graphics Interchange Format) image file format. CompuServe terms the fee an offer and a benefit to the on- line community, but skeptics quickly dubbed it a "GIF tax." The new fee system is based on a licensing agreement reached between CompuServe and Unisys Corp. (NYSE:UIS) in June, 1994, for use of LZW (Lempel- Zev-Welch) compression in its GIF format. Unisys has claimed a patent on LZW technology. Under the CompuServe agreement, developers who wish to operate under the on- line firm's LZW license agreement with Unisys pay a one-time fee of $1 plus a royalty of 1.5 percent or 15 cents per registered program, whichever is greater. Downloaded programs that do not get registered are not subject to the fee, nor are end-users. CompuServe announced the new fee system in various areas or "forums" of the service on December 29. The timing has led to suspicions by some that the service was not being fully honest with its members. In an open letter, Pat Clawson, president and chief executive officer (CEO) of TeleGrafix Communications Inc., called it "the online communications community's equivalent of the sneak attack at Pearl Harbor," and added: "The announcement of the CompuServe-Unisys GIF Tax on December 29, during the lull between Christmas and New Year's Day, was clearly timed to cause maximum damage while an unsuspecting public celebrated the holidays." Clawson said his firm, which developed the RIPscrip 2.0 online multimedia technology and the RIPTERM terminal program that leans heavily on the JPEG (Joint Photographic Experts Group) image format, will drop support of GIF images because of the new fee system. RIPscrip 2.0 is scheduled for release January 16. Speaking to Newsbytes, CompuServe spokesman Pierce Reid acknowledged that the release date may have been unfortunate from a public relations viewpoint, but he said it was an accident of timing, not a desire to avoid public scrutiny. Reid pointed out that it took a year and a half to hammer out a licensing agreement with Unisys Corp. (NYSE:UIS). Unisys holds a patent on the GIF format's underlying LZW compression technology. Once the agreement with Unisys was signed in June, 1994, he added, it took CompuServe another six months to arrive at a way to, as he put it, "share" the license. "Six months is not a long time to settle the details of a licensing agreement, if you know how these things work," he told Newsbytes. "We're not making any money on this. We paid a substantial fee to Unisys for the license, and we offered to share the license for the benefit of the development community as well as for ourselves and our subscribers." Reid said the license was based on the fact that CompuServe had found merit in a Unisys patent claim. CompuServe had used the patented LZW technology in its 1987 development of the GIF format, believing the technology to be in the public domain. Unisys contacted the on-line firm about its patent claim in 1993, and that eventually led to the December 29 announcement, the firm said. Commented Reid: "I've been watching the Internet, and those who are commenting are on a bell curve -- the vast majority are taking a reasonable view, but there are always those out on the extreme ends. "A number of people regard this as a real benefit. CompuServe, by requiring no money for negotiations, is saving developers from the need to waste time. There's no worrying about legal or licensing issues, and we've done that for a dollar." (Craig Menefee/19950104/Press Contact: Pierce Reid, CompuServe, 614-538-4571; Pat Clawson, TeleGrafix, 714-379-2140, Internet e-mail rip.support@telegrafix.com; Oliver Picher, Unisys, 215-986-5367) Unisys Seeks Royalties On GIF Algorithm BLUE BELL, PENNSYLVANIA, U.S.A., 1995 JAN 4 (NB) -- Unisys Corp. (NYSE:UIS) said it will seek royalty payments from developers of software using the Graphic Interchange Format (GIF). Unisys said it owns rights to an algorithm that is widely used in GIF tools. Oliver Picher, a spokesman for Unisys, told Newsbytes that the online service CompuServe introduced the GIF format in 1987, and incorporated the Unisys algorithm, apparently believing it was in the public domain. Unisys learned that the algorithm was used in the GIF technology about two years ago, contacted CompuServe, and in June, 1994, the companies reached an agreement under which CompuServe paid Unisys an undisclosed sum for use of the algorithm. The payment was "a reasonable amount but not an overwhelming amount," Picher said, declining to reveal the exact sum. CompuServe was the first to license the algorithm from Unisys for use in a GIF tool, Picher said, but about 100 companies have licensed it for other purposes. Picher said one other online information service has already licensed the algorithm, but could not say if it was for GIF-related use in that case. Unisys is negotiating with all the major online services for possible license agreements, Picher said. While he would not give specifics, he said the terms Unisys is seeking are "very reasonable to the point where license fees shouldn't be a barrier" to using GIF. He added that people who have GIF software on their PCs will not be affected. The same algorithm is also used in the Tagged Image File Format (TIFF) graphics format, and Unisys concluded a license agreement with Aldus Corp. some time ago, Picher said. (Grant Buckler/19950104/Press Contact: Oliver Picher, Unisys, 215-986-5367) ------------------------------------------------------------------------- To find out more about the anon service, send mail to help@anon.penet.fi. Due to the double-blind, any mail replies to this message will be anonymized, and an anonymous id will be allocated automatically. You have been warned. Please report any problems, inappropriate use etc. to admin@anon.penet.fi.