I'll admit I have a personal interest in this posting, one that has miserably lasted for over six years as a shareholder, before any knowledge of '672, which I'll get to shortly, but I have a telling point to make nonetheless. Most have never heard of Asure Software, nor Forgent Networks or VTEL for that matter, but they represent so much of what business is about these days in 21st century capitalist America.
Asure software began doing business inconspicuously in 1985 as San Antonio Digital Labs, based out of San Antonio, Texas, as one of the pioneers in video teleconferencing. In 1986, the company changed it's name to VideoTelecom, which was shortened to VTEL when the company went public in 1993. The company continued along, enjoying modest success through the '90's, and happened into a gold mine in 1997, though they were unaware of it at the time. That was the year VTEL purchased a small company by the name of Compression Labs, Inc., whose main value at the time lay in video coding and compression technology. The purchase was meant to strengthen VTEL's technological foothold, but it would be five more years before VTEL realized the full effect of their purchase.
By 2002, VTEL had renamed itself Forgent Networks, and while going over some of the patents it had acquired in the Compression Labs purchase, they uncovered patent number 4,698,672, the patent for the JPEG image compression standard. JPEG is one of the most commonly used image compression methods in computing, and is used in many commercial products and applications. Initial estimates pegged the patent to be worth in excess of $1 billion, though Forgent would only acquire a fraction of that, albeit still an impressive amount. Forgent would go on to collect over $100 million in settlements from companies like Adobe, Microsoft and IBM, with roughly half of their earning going to their legal team.
The fun would end in in 2006 when the United States Patent Office ruled Forgent's claim invalid, thus ending what had become Forgent's main source of income: suing others. Forgent's image suffered along the way, becoming known as a patent troll, which prompted the change in name to Asure Software. To this day they lack a sound business structure and are in the midst of examining another patent, No. 6,285,746, which deals with video system playback used in Digital Video Recorders (DVR), commercially known as the Tivo!
When I hear people arguing on behalf of the capitalist system, at least as it is freely practiced in this country, I cannot help but think of leeches like Asure Software, who only drain from the system while contributing no societal worth. It's not as if they developed the technology for the '672 patent themselves. They acquired it and began to enforce it years after it had been freely given to the public, once the public had become dependant on it. That's akin to technological blackmail! They have since earned $8 million off the '746 patent, again without any good reason other than they can. And it's the consumers who will pay the price for this. All the companies that were forced to settle from both patents simply will trickle the loss onto their expenses and raise the price of their products.
There is no reason this should be allowed to occur, other than greed. If we are going to live in capitalist system, it needs greater regulation and a whole new set of corporate rules. Asure Software is by no means anywhere near the worst of bad business in this country, look what Enron did, and Haliburton, not to mention ExxonMobil and their misinformation campaign! What all these companies have in common, including Asure Software, is this immoral capitalist mindset that seeks profit in any which way regardless of what wrongs may be brought on society. Look at W.R. Grace! Asure Software is peanuts compared with these companies, but regardless society suffers because of their existence, save for the few Asure Software employees and their gracious legal team. Capitalism in it's current form is a destructive force that needs to be remade or replaced. Asure Software is a very small example of why.
Digg it!
http://www.digg.com/political_opinion/Forgent_Asures_our_economy_s_broken
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1 comment:
Brian,
I worked at VTEL from 1995 to 2002. It was a very good company, which made very solid videoconferencing systems. Your history of the company is pretty accurate. But it is not a description of capitalism. It is a description of a small set of people who used legal aspects of patent law to milk a company while adding no new value. I owned shares in the company but realized years ago this was a scam. These things exist in the real world. I turned my investment focus to things I could understand. I used Apple computers for work and realized how much better they dealt with spyware and viruses, and how Apple was much more focused on making great products. So I started buying stock in Apple. It grew. I bought more. It's the only stock I have purchased since the dot com bubble burst. I have done well with this and plan to continue.
My point is that we live in the greatest country in the world with lots of opportunities. There are also scam artists, like the Forgent crowd. If you are intelligent and develop a positive attitude you can do well. If you decide the "system" is bad and rigged you will probably never take the initiative and risks needed to succeed. i would much rather be able to operate "freely" in our system, making my own decisions about where to invest, than live in a country where earnest government officials take it on themselves to perfect the world by making decisions for the people, and do brilliant things like legislating ethanol as a "mandatory" alternative energy, resulting in massive food price increases and starvation in far flung countries around the world. Much greater damage than ever done by Forgent
So I say develop a positive focus, discard notions of victimization and move on when you have bad experiences with people like Forgent/Azure. Find positive real innovators and invest - after careful analysis and understanding of the risks. It is fun. But there is no guarantee of reward.
Kent Ramsay
Aurora, OH
kent.ramsay@mac.com
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