Below is a message dealing with the new GIF laws that affect EVERY BBS and software company that uses, produces, or distributes any GIF file. =========================================================================== Date: 01-02-95 (21:13) Number: 216 From: PATCLAWSON@DELPHI.COM Refer#: NONE To: ALL Recvd: NO Subj: PROTEST OF NEW COMPUSERVE Conf: (409) bbs.wildcat --------------------------------------------------------------------------- Path: ns1.planetc.com!uunet!news.mathworks.com!news2.near.net!news.delphi.com!u From: Pat Clawson Newsgroups: alt.bbs.wildcat Subject: PROTEST OF NEW COMPUSERVE-UNISYS GIF USAGE TAX !! Date: Mon, 2 Jan 95 21:13:37 -0500 Organization: Delphi (info@delphi.com email, 800-695-4005 voice) Lines: 177 Message-ID: NNTP-Posting-Host: bos1f.delphi.com January 2, 1995 An Open Letter to Our Colleagues In the Online Communications Community: The announcement by CompuServe and Unisys that users of the GIF image format must register by January 10 and pay a royalty or face lawsuits for their past usage, is the online communications community's equivalent of the sneak attack at Pearl Harbor. 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. We at TeleGrafix Communications have no quarrel with those who seek to protect their intellectual property and profit from it. Indeed, we are in business to do the same. We believe those who develop software are entitled to reap financial rewards from their labors. But in our opinion, the timing and circumstances of the CompuServe-Unisys action indicates this is a shakedown of the online communications community by two powerful corporations, rather than a reasonable effort to protect intellectual property. The GIF format has been in widespread public use since 1987. Its widespread use and royalty-free licensing has been encouraged by CompuServe for years. Neither CompuServe or Unisys have made any significant improvements to GIF or its underlying LZW algorithm and compression process to justify charging for what has been free. Giving GIF users only 14 days to comply with sudden, unexpected demands to pay the private CompuServe-Unisys GIF Tax or face prosecution for past usage of what had been promoted for seven years as free, open standard software is unconscionable. It is especially outrageous since CompuServe and Unisys admit in writing that they decided to require licensing SIX MONTHS AGO in June, and didn't announce it to the public until now. According to the CompuServe-Unisys GIF licensing agreement, the settlement of the patent dispute was executed on June 21, 1994. CompuServe agreed to implement the agreement "as soon as reasonably practicable and in no case later than six (6) months after the date this Agreement is executed..." That six month period ended on December 21, 1994 -- but CompuServe did not make the licensing terms public until December 28. Indeed, CompuServe appears to have violated the terms of its own settlement agreement with Unisys. While many of the messages we have read online in reaction to the CompuServe-Unisys GIF Tax decree express both dismay and disbelief, virtually none have analyzed the actual provisions of the licensing agreement. It is in this area that TeleGrafix Communications wishes to contribute to the dialogue. In our opinion, the CompuServe-Unisys licensing agreement is both illogical and overly broad. Let's examine some of its key provisions. All quotes cited are directly from the agreement. 1. CompuServe will license Developers who want to use GIF technology. The term "developer" is defined as "the other undersigned party to the agreement," and it seems to apply to ANYONE who contemplates distributing any product that uses the GIF format. 2. Developers will be licensed to sell or distribute "Products" that "use and exploit GIF...solely within the Field of Use." The term "Field of Use" is defined as "primarily for accessing the CompuServe Information Service and for manipulating and viewing data received through the CompuServe Information Service." The licensing agreement further defines the term "Products" as being "software that is developed or distributed...which is designed for and used primarily for accessing the CompuServe Information Service and for manipulating and viewing data received through the CompuServe Information Service." IT APPEARS THAT THE ONLY LAWFUL USE OF GIF WILL BE FOR COMPUSERVE-RELATED PRODUCTS. Using GIF images in any other manner, such as on CD-ROMs or bulletin board systems, is prohibited. Most of the thousands of products that have used GIF in some manner are henceforth contraband. 3. Developers may no longer "use, copy, modify or distribute the GIF specification, except as expressly permitted by CompuServe." This states that the GIF specification can no longer be shared, published or uploaded in any manner without the express consent of CompuServe. 4. Members of the public are prohibited from using any software product containing GIF until they have become a REGISTERED user of the product. The customer also must agree to use the product "primarily for accessing the CompuServe Information Service and for manipulating and viewing data received through the CompuServe Information Service." This virtually eliminates the concept of freeware or shareware containing GIF capabilities, since prospective customers can no longer try out these software products without registering them first. 5. Software developers must pay $1.00 for a license to use GIF, PLUS a fee equal to the GREATER of 1.5% of the selling price of the product, or $0.15 per "Disposition." Disposition is defined as "the sale, lease or license or any other grant of rights to a Product or any new Product." All royalties must be paid quarterly. Noncommercial and freeware usage of GIF technology is NOT exempted from the royalty requirement. Because the royalty provisions and definition of "Disposition" are so broad in scope, it appears that a GIF Tax payment may be due to CompuServe-Unisys each time a GIF image is transmitted via BBS or Internet. The operators of a BBS or World Wide Web site with hundreds or thousands of GIF images online could easily be bankrupted by these licensing requirements. 6. CompuServe must be notified of ANY new product using GIF when it is first offered to customers. 7. Persons using GIF must keep records of its use, and CompuServe has the right to audit those records every year upon seven days notice. Persons using GIF must pay the cost of the audit if a royalty underpayment of 10% or more is discovered, along with 12% interest on any underpaid royalties. 8. Even if the patent is later found by the courts or the U.S. Patent Office to be invalid and unenforcable, or if the patent expires, any developer must "return all copies of the GIF specification and any confidential information of CompuServe then in its possession or control to CompuServe, (ii) stop using the Licensed Technology, and (iii) stop distributing Products." This states that EVEN IF THE PATENT IS OVERTURNED OR EXPIRES, YOU MUST STOP USING OR DISTRIBUTING GIF. 9. Even though CompuServe has publicly disseminated the text of the agreement it wants GIF users to sign, the terms of the agreement are to remain confidential. This is illogical, to say the least, since they have posted it for public download on their own system. 10. Developers have to indemnify and hold CompuServe harmless for any damages if their CUSTOMERS somehow use GIF technology in a way not permitted by the licensing agreement. 11. Unisys has the right to enforce the agreement, as well as CompuServe. Further, Unisys has the right to pursue legal action or seek damages against Developers even after the agreement has terminated. TeleGrafix Communicatons Inc. will not sign such a licensing agreement. We think most other software developers, BBS sysops and Web site operators also will refuse to sign. We encourage our colleagues in the online communications community to evaluate the CompuServe-Unisys action, and to lodge appropriate protests directly with those companies. We believe that the CompuServe-Unisys GIF Tax drives a stake through the heart of Internet development. It will cripple the World Wide Web, NCSA Mosaic, and other Internet multimedia technologies that rely heavily on GIF imaging. Fortunately, we at TeleGrafix Communications do not depend on GIF imaging in our new RIPscrip 2.0 online multimedia technologies. We chose to implement the JPEG image format and only recently decided to add GIF support as a convienience to our customers. Due to the restrictive conditions of the CompuServe-Unisys GIF Tax and licensing agreement, we must now reevaluate our plans for supporting GIF use in the upcoming release of RIPscrip 2.0. While our company hopes to profit financially from our advanced RIPscrip 2.0 technology, we will not demand royalties from those who have used the freeware versions of our earlier RIPscrip 1.54 products and/or technical specifications. The RIPscrip 2.0 specification also will be made public for third-party use after it is finalized. We expect that the CompuServe-Unisys action will spell the death of GIF as a commercially viable technology, shifting the attention of the online communications community to JPEG imaging. Sincerely, Pat Clawson President & Chief Executive Officer TeleGrafix Communications Inc. Huntington Beach, CA Voice: (714) 379-2140 Fax: (714) 379-2132 BBS: (714) 379-2133 Internet: rip.support@telegrafix.com