Software Makers Protest Fee for Using Unisys' Graphics Code : Computers: The company for years has allowed free use of its patented technology through on-line networks. But now it wants to charge. One O.C. firm has come up with a variant.

TIMES STAFF WRITER

After 36 straight hours at work and dozens of cans of Pepsi, programmers at Telegrafix Communications Inc. came up with a way to bypass a widely used, patented code for transmitting photos and graphics between computers.

As it turns out, the small Huntington Beach company may never send out the program. Still, the staff at Telegrafix sees itself as having struck a blow for freedom in on-line software distribution.

Compuserve Inc. announced just before the New Year that it would begin charging for use of a photo-transmission technology that had previously been free. That new policy brought cries of protest from small software makers using the Graphics Interchange Format, or GIF.

For Telegrafix, the choice was either to change the programming of software it had intended to begin shipping this week or pay $50,000 in royalties. The company decided to do the former and make a strong protest.

"This is a shakedown of the on-line communications community . . . rather than a reasonable effort to protect intellectual property," Pat Clawson, Telegrafix's chief executive, wrote in a message to an Internet news group.

The unexpected outcry from software developers reflects the tension between open standards, which encourage creative uses of technology, and the intellectual property protections that companies need to make a profit on their creativity.

GIF (pronounced "jiff") was developed in the mid-1980s by Unisys Corp. The technology, made available through Compuserve and other on-line networks, was so widely used that it was considered to be in the public domain.

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But Unisys served notice last year to Compuserve that it held a patent on the technology and intended to begin collecting royalties. Although the fee is small--a few cents for each software program--developers are protesting that it can add up to sizable sums for tiny companies.

"What's got people so upset is that the patent claim is so out of left field," said Chris Grace, co-founder of software development firm Johnson-Grace Co. in Newport Beach. "It's from the bleachers or the parking lot."

Although Compuserve calls the complaints a "tempest in a teapot," the company extended its licensing deadline by three weeks, until Jan. 31, in the face of mounting criticism.

For companies like Grace's, which develops programs for Compuserve competitor America Online, that is small consolation.

"It's a submarine patent," Grace said. "It doesn't crop up until after people are using it, and they probably would have avoided using it if they knew there would be a patent."

"I don't think Compuserve did anything wrong," Grace said, "but I think the whole industry's baffled. One would have thought that if they (Unisys) had a patent, that they would have come forward before now."

By waiting until the technology was widely accepted as a standard before making a move, Unisys--perhaps inadvertently--benefited from a bigger user base than might have developed otherwise, said Phil Agre, an assistant professor at the University of California at San Diego who edits a newsletter discussing on-line communications issues.

"Developers are not always aware of the legal standards they rely upon, and they can get burned later on if the standard is proprietary," Agre said. "Companies can encourage the entrenchment of their standards by making them freely available on the 'Net and then enforcing their rights once they become widely used."

A Unisys spokesman said the company will not charge individuals for downloading images using GIF but will expect developers to obtain a license for the technology.

"The very reasonable terms should prove no financial barrier to the introduction of product into the on-line networks," the company said in a press release.

R. Pierce Reid, a Compuserve spokesman, said of his company's Dec. 29 statement: "In retrospect, the timing and the time period were not ideal."

The company never intended to cause problems for software developers, he said, only to comply with the requirements of the Unisys patent.

"Compuserve had nothing to gain by trying to sneak this through," Reid said.

The result, though, has been inconvenience and delays in product shipments for dozens of small software companies. One of those is Resnova Software Inc. in Huntington Beach.

James Barry, one of Resnova's partners, said his company will be removing GIF from its programs, rather than pay the royalties.

"If we had to keep track of which users have GIF, then we'd have to charge the users the cost of keeping track of them or eat the cost ourselves," Barry said. "And we're not big enough to do that."

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Compuserve, he said, "should have given the on-line community a much longer period of time to adapt to this. Everybody's got so many images that any royalty claim is going to be worrisome."

At Telegrafix, an eight-person shop in Huntington Beach that is crowded with diagrams, program manuals and handwritten signs like "Disturb me and die," coming up with a code that could substitute for GIF was a moral victory but, for now, nothing more.

The company had offered its substitute code to Compuserve and to other development companies shortly after programmers Jeff Reeder and Mark Hayton finished their marathon code-writing session. Because Compuserve holds a copyright on GIF, however, Telegrafix would need that company's permission to ship the variant, which it calls GEF.

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Compuserve spokesman Reid said the company has too much invested in GIF to sanction a new format so quickly.

"Would you want to replace a worldwide standard used in millions of pieces of software with a solution developed in a few hours?" Reid asked. "Might this solution infringe on someone else's patent that we don't know about?"

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