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LZW COMPRESSION U.S. Patent No. 4,558,302 Issued:December 1985 to Terry Welch Assigned tInitially to Sperry Corp.; now held by Unisys Corp. Prosecuted by:In-house at Sperry Corp. When this patent expires next year, so too will one of the Internet’s longest-running love-hate relationships. This is the patent that spurred the growth of the Web from a little-known medium used by techies for sending files to a worldwide phenomena. The LZW algorithm provides a fast, elegant way to compress and decompress data. It is the trick that allows Web users to view photos and animations without waiting hours for them to download. Every time you call up CNN.com, Yahoo or just about any other Web site, you’re looking at LZW compression in action. Inadvertently, the patent spotlighted the tension between the open environment of the Web and its commercial potential. When inventor Terry Welch published a paper describing LZW compression in 1984, he didn’t mention the pending patent, and when developers used the technique to create a compression standard known as GIF, they were unaware that they were treading onto protected territory. Unisys, which holds the patent, was unaware, too, for it remained silent for years, as GIF use exploded. Finally, in late 1994, the company announced that it would begin charging licensing fees, creating an uproar on the Net. Developers railed against paying to use a technique that all along had been free and open. LZW became known as the “submarine patent,” and the fees as the “Unisys tax.” (The patent survived a re-exam in 1993.) Since 1995, Unisys has entered into almost 2,500 licensing agreements, most of them low-cost. Unisys has negotiated one-time fees, pay-as-you-go schemes, and companies like Microsoft Corp. and AOL Time Warner have negotiated their own rates. The LZW controversy also encouraged the development of alternative compression algorithms — including the PNG standard and the JPEG format used extensively in digital photography — proving that even the “dark” side of this patent spurred progress. Alan Cohen is a free-lance writer based in New York City. His e-mail is [email protected].

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