Archive for August, 2002

  • PMP offloads UK publishing business for A$113.7 million

    The sale comes hard on the heels of PMP selling its remaining 50 per cent stake in Pacific Publications to Kerry Stoke’s Seven Network for $65 million, completing its exit from the magazine publishing industry where it was once a major player. The money from both sales is earmarked to reduce the company’s debt which is predicted to fall to $346 million next year.

    Attic Futura, which has among its titles the best selling Sugar, B and Inside Soap, was bought by French publisher Hachette Filipacchi. The total print run of the magazines is two million per month and UK print companies are fearful the new owner will shift the production across the Channel when the current agreements run out.

    PMP Printing has 16 printing sites in Australia plus book printer Griffin Press as well as two sites in New Zealand. It has locked in strong printing contracts for Pacific Publications as part of its divestment deal. Titles include New Idea ad TV Week .

    PMP is a strong player in the direct mail market

  • CPI posts loss of $5 million for the year to June 30

    The division, CPT Trading Pty Ltd, operated in the consumables market, distributing a wide range of products including plastic and paper bags, food service packaging, janitorial products, business papers and industrial items. It had a turnover of $47.5 and was the main motive for the construction of the company’s enormous automated warehouse in Smithfield, NSW.

    The sale will require one-off charges to the accounts of the CPI Group of approximately $3 million after tax, including $1.4 million of goodwill write-off and approximately $1 million of divestment costs. The task of untangling the logistics is likely to be complex and expensive.

    In a statement to the Stock Exchange the company said it is now firmly focussed on providing One Source solutions to the graphic arts and printing industries with its paper, imaging, machinery and engineering services. CPI is the third largest paper merchant in the country (albeit a long way behind PaperlinX and Edwards Dunlop) and has a premier range of equipment and consumables agencies, notably the Komori press range and Fuji prepress, films and plates.

    It moved last year to restructure its sales approach, appointing individual account managers to handle all customer requirements across the wide range of products and service.

    “The restructuring in November 2001 to an account management approach to the market is proving successful, although it will take a longer period for the full benefits to evolve. Clients have reacted positively to the closer relationships being forged enabling CPI to present total solutions to meet business needs,” read the statement.

    The company expects the sale and restructuring to lower its ongoing costs by $10 million per annum, enabling it to better compete in the difficult market conditions currently experienced by all players in the industry.

    The $5 million loss includes a $2 million after tax provision for restructuring costs during the first half and the $3 million after tax one-off charges in relation to the sale of Trading.

    CPI Group share price continues to languish around 74 cents, down from this year’s high of $1.29.


    Mr S Somogyi Chief Executive Officer

    CPI Group Limited

    Tel: (03) 8587 3500

    Mob: 0412 168 934

  • Nexpress 2100 is a winner at the Intertech Technical Awards

    The digital press, which is expected to be launched in Australia in October, has sold more than 170 units since its launch in September. The majority of these units have been installed – on track with the company’s plan to have several hundred in place by the end of this year.
    Other winners of the Intertech Awards are:

    • Adobe PDF Transit software development kit
    • Arpeco Injector in-line rotary cutting, creasing, and stripping converting system
    • Enfocus Certified PDF workflow
    • Gerber Sector coating blanket production system
    • ColorQuick press analysis system
    • Hydro H2O inks
    • Prima Amrys saddle stitching makeready system from Muller Martini
    • JetPlate ink-jet computer-to-plate system
    • Printcafe PrintFlow printing management system
    • Timson T48A ZMR web offset book press

    Now in its 24th year, the InterTech program honors technological innovation within the graphic communications industry by singling out those technologies that are deemed significant by a GATF-independent judging panel comprising industry experts and graphic arts users. This year, 30 submissions were entered into the competition, which saw one of the highest-ever recipient-to-nominated technology ratios.

  • Industry optimism fades in the face of continued tough conditions

    The Printing Industries report points to another tough quarter of trading conditions coming up. The June 2002 survey processed results from 146 companies throughout Australia employing a workforce of 11,400.

    Hagop Tchamkertenian, Manager
    Industry & Commercial Policy, Printing Industries Association of Australia

    The results fly in the face of the optimistic forecasts of respondents in the previous quarter, indicating a sharp deterioration in business confidence.

    Deteriorations have taken place in a number of key industry indicators such as:

    • Orders, production, sales and net profits;
    • Selling prices;
    • Capital expenditure;
    • Number of outstanding debtors;
    • Employment and overtime levels; and
    • Production costs

    The only indicators that showed a positive result were:

    • A reported easing of the labour market; and
    • Increased availability of finance.

    According to Mr Hagop Tchamkertenian, Printing Industries Manager of Industry and Commercial Policy, one disturbing area remains capacity utilisation levels. The survey results confirm that capacity utilisation continues to remain extremely low with only 50 per cent of survey respondents indicating that they are operating at capacity utilisation levels of 70 per cent or more, and more than 91 per cent of the respondents indicated that lack of orders remains the primary barrier to increasing production levels.

    In terms of activity or capacity utilisation levels the June 2002 quarter outcome is the worst outcome in the 15-year history of the Printing Industry Trends survey

    While industry expectations for the September 2002 quarter continue to remain optimistic despite another disappointing trading quarter, Mr Tchamkertenian is advising caution.

    “Given the expected rebound in activity failed to materialise during the June 2002 quarter, we need to wait and see what the actual outcome of the September 2002 quarter is before determining one way or another whether the worst is behind us,” he said.

    According to the respondents the September 2002 quarter should yield the following results:

    Increased orders, production, sales and net profits;

    • Modest increases in selling prices;
    • Increased availability of finance;
    • A further easing of the labour market;
    • Increased employment and overtime levels;
    • Further increases across the production cost categories;
    • Declining stock levels; an
    • Rising number of outstanding debtors.

    Over the next six months (September and December 2002 quarters) the respondents are forecasting:

    • Improvements in business conditions; and
    • Increased investment in machinery, equipment and buildings.

    Any one interested in obtaining a copy of the full survey report can contact Printing Industries. Hard copies of the report cost $15 for members and $25 for non-members.

    Electronic copies of the report are also available on request and cost $10 for members and $15 for non-members.

    E-mail the

  • Southern Graphtec Systems is for sale

    One of the pioneers of large format systems the company at one stage had the Encad agency and later sold Hewlett Packard equipment. Encad is now a Kodak company and according to industry sources, Southern Graphtec regained the agency shortly before the administrator was appointed.

    There was no answer from the number at the Parramatta Rd premises where Barry Grant, managing director, has run the company since 1989 and Sims Lockwood were unforthcoming on their success or otherwise in making the sale. The company has battled winding up orders since last year.

    Southern Graphtec sold large format printers to customers in NSW, Vic, Qld and WA who will now have to source consumables from other sources, if the business goes under.

  • Australian Post rise will impact on printers and mailhouses

    The Printing Industries Association of Australia (Printing Industries) has written to the Australian Competition and Consumer Commission (ACCC) opposing Australia Post’s proposed price changes.

    Under the proposed changes Australia Post is seeking approval from the ACCC to put into effect the following changes from 13 January 2003:

    • A 5 cent increase to the basic postage rate (BPR) (taking it from 45 cents to 50 cents) and increases to large letter, local, seasonal greetings and prepaid envelope rates to maintain appropriate relativities to the new BPR;
    • An increase to PreSort rates of around 2 cents per article;
    • Removal of the ‘90/10 barcoding rule’ (requiring 90% of barcoded PreSort lodgements to be barcoded) and its replacement with specific residue rates for letters that cannot be barcoded through the AMAS (Address Matching Approval System) process;
    • Introduction of a Clean Mail service for lodgements of 300 or more machine addressed letters;
    • Introduction of a new PreSort medium letter category to align with Post’s small letter processing capabilities; and
    • Combination of the existing 0-50g and 50-125g weight categories into a single 0-125g category for PreSort medium and large letters.

    In a submission to the ACCC, Printing Industries, says that further increases will have a damaging impact on advertising budgets resulting in cancellation of campaigns or reduction in quantities being produced. The move comes on top of a 20 per cent increase in costs due to the impending demise of Adpost (mail distributed with a customer response device such as order form).

    According to Mr Hagop Tchamkertenian, Printing Industries, such a change will have a major detrimental impact on the Australian printing and mailing industries. There is also the real danger that faced with increased postage costs, clients may look to using non-paper based marketing and communication channels such as email, internet and telephone.

    Printing Industries claims the proposed price increases by Australia Post will not only impact negatively on the future growth prospects of printers and mail houses, but ultimately also on Australia Post. Advertising mail has a flow on effect to mail services stimulating new business. Australia Post is already seeing a reduction in standard business mail as organisations move to electronic delivery systems. Overseas experience has shown that the growth in direct mail has helped to offset some of this reduction.

    According to Australia Post’s submission to the ACCC, it has a target of 14.1 per cent return on assets. In comparison, Printing Industries estimates for return on assets for the entire printing industry was about 6.5 per cent for financial year 2000-2001.

    “No doubt Australia Post’s desire to achieve healthy returns on assets at its end of the value chain is encouraging it to transfer costs to major mail users resulting in the latter group experiencing declining profit margins and return on assets,” said Mr Tchamkertenian.

  • HP Indigo bash is a whale of a time

    Hosted by the Currie Group, local agents for HP Indigo, the Make a difference event was designed to draw a line in the sand between Indigo presses before and after the HP acquisition. It is part of a global road show that began in Mexico and will visit Brazil, Sweden, Spain, Russia and China before the end of the year.

    Its scope and no expense spared style is indicative of the sea change in the HP Indigo digital press line that now has the backing of one of the largest technology companies in the world.

    Keynote speaker Richard de Boissezon, Worldwide Marketing Manager, HP identified the strengths the company brought to Indigo digital printing as world class IT expertise, open network standards, strategic alliances, colour science and amazingly, 20 million networked printers throughout the world – the next largest installed base is a mere one million.

    Even with such a huge market leadership, HP’s laser and inkjet printers only account for four per cent of the total printing market. The other 96 per cent, the commercial printing market, is the prize of which it hopes to gain a share. The strategy is that HP, through its corporate connections, will be able to provide the demand for digital printing to its print service providers.This strategy is a long term one – as he said “not now, but in the future.”

    Eric Bredin, of HP Europe gave some compelling CAP Ventures figures on the local and world printing industry to justify HP’s interest in the market. Of total Australian manufacturing production of $230 billion, printing contributes $26 billion. Of that, the 80/20 rule applies with 82 per cent of the total print being supplied by 20 per cent of the companies. Since 1998 the printing market in Australia has grown by 7.5 per cent.

    On a global perspective he claims that by 2010, 17 per cent of printing will be required next day and 20 per cent on the same day. This rises in 2020 to 19 per cent next day and 30 per cent same day. He nominated 36 per cent of the total print production is likely to go digital, singling out administration, marketing and training as the most likely candidates.

    Jeff Lovell (left) of Total Digital Solutions, fresh from commissioning the latest HP Indigo press in Perth last week, pictured with David Currie, Managing Director of the Currie Group.

    A local perspective was given by David Minnett of Momentum in North Sydney who is on his third Indigo – this one he and his marketing director, Robert Dean, promote as Colossus. They have five reps selling digital print to keep it fed.

    There are 2,000 Indigo press installations worldwide – over 30 in Australia and New Zealand, which makes this region about 14th.

    Well-known digital printing veteran, Michael Mogridge, who is now HP Indigo director of SE Asia and Australia, closed the presentations with some test cases from around the world. He claimed 17 per cent of HP Indigo digital printing is high value personalised output.

    The Make a difference event showed what marketing muscle and unlimited budget can do. It is perhaps the dawn of a new era in digital printing – certainly we are likely to hear more about it in the future.

  • EPICS is back but dont hold your breath

    Printing Industries National Director, Policy Philip Andersen, said more than $14 million in applications were pending, many in the final stages of approval, when the Federal Government scrapped the scheme.

    “While we were very successful in winning back reinstatement of EPICS, the bureaucratic wheels of government process must again be put back into motion,” he said.

    “Inevitably there will be delays processing the 100 plus applications caught in the approval pipeline when the scheme was scrapped. In many cases financial information will have to be updated and some of the proposals may need to be re-costed.

    “AusIndustry, the department responsible for processing the applications, has had to re-staff to accommodate EPICS and many of the previous staff who were familiar with the applications may not be available for the reprocessing.”

    Mr Andersen said it was a frustrating process for companies with pending applications.

    “We will continue to pressure for the various processes to be completed as quickly as possible and will co-operate as much as we can to assist this.

    “Unfortunately it will be some time before any new applications can be considered, but we will continue to monitor progress and advise the industry accordingly,” he said.

    Mr Andersen said all inquiries in relation to EPICS should continue to be directed to the General Manager of AusIndustry – Paul Sexton, on (03) 9268 7500 until further notice.

  • Government Minister at printing conference

    The Crowne Plaza, Terrigal

    The Minister will launch the Printing Industries newest educational initiative, an OHS Induction Video for the Graphic Arts industry. The video is focused on employees and outlines some of the safety issues of working in the industry and is part of an accredited course which Printing Industries runs.

    “I congratulate Printing Industries on this excellent safety initiative and I look forward to launching the OHS Video at the upcoming Conference,” the Minister said.

    Darren Jensen NSW Manager Printing Industries said “The OHS Regulations brought in last September in NSW sets out requirements for workplaces to put into place systems to identify, assess, control and/or eliminate health or safety risks. It also details how the duty to consult with employees about health and safety matters can be met. Employers have to have systems in place thus I urge all members to contact us for any advice or training requirements. Workcover NSW has made available their full Workplace Safety Kit at no cost to all Conference delegates”.

    The Conference will be essential for all managers in the industry as it provides a range of excellent speakers. The theme is PRINT NSW – PEOPLE, PROFITS, POSSIBILITIES. This Conference is not all work but also has great entertainment planned for the Friday night Annual Dinner and fantastic Saturday leisure activities including golf, fishing and a Hunter Valley wine tour.

    The Conference full package price of $395 is tremendous value. “Our generous sponsors have subsidised the cost and our special thanks go to these organisations,” Mr. Jensen said.

    The Gold sponsors are: Canon, Dalton Fine Paper, Australian Paper, Fuji Xerox and Spicers. Silver sponsors are CPI, Print & Pack, Heidelberg, Print Super and Jaeger Fine Papers. The full Conference brochure is now available on the Printing Industries’ website or call (02) 9248 7300 for a copy to be sent to you.

    To register online click here:

  • Jobs, jobs, jobs


    Graphic Artist – Pre press/lithographer

    Casual (relief position)

    This position would suit a freelance graphic artist who is available to fill in as required, when our in house artist takes leave or is absent from work.
    As you would be required to work without supervision, 5 years industry experience is preferred but not essential.
    Skills required: Mac based production studio, Photoshop, Illustrator, Quark, Pagemaker, Freehand, Acrobat, flatbed scanning, Panther RIP & Imagesetter, Film output, Traditional
    film planning and Offset Platemaking.

    Training will be provided to the successful applicant.

    Please e-mail your resume in pdf format to


    Document designer – Mailing Industry

    Leading mail house requires an experienced document designer.

    The applicant must have an excellent (PC based) knowledge of Microsoft Windows and Microsoft Office programs.
    In addition, experience in Desktop Publishing with knowledge of Elixir applications, PReS, Paris, Adobe Photoshop, Adobe Illustrator, or other Mailing Industry design software packages is required. An eye for document design and knowledge of production printing machines would also be an advantage.
    We are a high volume print and mail production facility, requiring an extremely accurate and timely turnaround. The ability to work in an environment that is deadline driven is essential.

    Apply in writing to:
    The General Manager
    PO Box 1276
    Moorabbin Vic 3189


    Position Wanted
    Graphicartist/mac operator/plate maker

    Experienced in:

    • Macintosh art
    • platemaking
    • colour proofing
    • design and preparing artwork – prepress/signage
    • prepare folio for clients
    • co-ordinate printing and delivery of goods

    A full time position is preferred, but, a part-time position may benefit both parties.

    Please contact Peter Allen:



    For further information on the following positions, e-mail Print21Online and qoute Ref no.

    Technical sales rep. – Sydney / Melb.

    Swedish-based printing engineering company.

    Ref: 637

    Experienced print rep. – Sydney

    Commercial colour printing company (“on-demand” capability)

    Ref: 642

    Estimator (digital & conventional) – Sydney

    Digital print / pre-press bureau

    Ref: 652

    Despatch manager – Sydney

    Large commercial offset printer

    Ref: 640

    Experienced print rep. – Sydney

    Large Adelaide-based printing company

    Ref: 668

    Sales rep to sell design and pre-press – Sydney

    Design / print pre-press bureau

    Ref: 672

    Experienced print reps (web & sheet) – Sydney

    Large nationally-recognised web / sheet printing company

    Ref: 674

    Production manager (senior role) – Sydney

    Large envelope printing company

    Ref: 677

    Account manager (mailing background) – Sydney

    Large nationally–recognised print & mailing company

    Ref: 679

    Account manager / client services – Sydney

    Large “blue-chip” printing company

    Ref: 680

    Telemarketer / sales rep – Sydney

    Digital equipment distributor

    Ref: 639

  • Overflow…extra news…more news…overflow…extra news…


    Well known industry marketing guru, Richard Rasmussen, is leaving Heidelberg after 21 years to pursue other interests, specifically his masters degree in marketing. He intends to work as a consultant to the industry in collaboration with his erstwhile Heidelberg colleague Stan Solomides. They will prove a formidable pair. Andy vels Jensen, Managing Director of Heidelberg is yet to appoint a successor to the role of Marketing Manager.


    Glen Turner, of Public Image, North Sydney copied us on an e-mail a design colleague of his sent to Adobe regarding changes to the makeup of PMS colours.

    ‘Pantone changed the CMYK breakdowns of their PMS colours in May 2000 and didn’t seem to tell anyone. Adobe has adopted this for the latest versions of Ill 9&10 and psd 7. If you mix ill 8 and psd 7 when using the Pantone system they give you different colours when you run CMYK separations.’

    Our resident graphic designer wonders how often PMS specials are used in CMYK seps. Jordan Reizes of Adobe reckons the company has no choice but to use the latest iteration of Pantone colours as part of the licence agreement. It is an intriguing development. When we contact the author we’ll be back with more.


    Winners corner. Extreme Automation InternationaL won the major prize in the Printing Industry’s national membership drive.
    The prize was drawn during the Association’s National Council meeting on Monday 29 July 2002.
    Extreme Automation will receive the $18,850 first prize Xerox Phaser High Speed 7700 tabloid colour printer. The printer will be presented during the inaugural NSW Conference at Terrigal on 20-21 September 2002.

    Printing Industries’ National President, Chris Segaert and Henryk Krazewski of Fuji Xerox drew the winning entries in the National Membership Campaign prize draw under the watchful gaze of independent scrutineer Les Baxter from AusIndustry.


    Apple has introduced Mac OS X version 10.2, calling it, Jaguar. The release has more than 150 new features and applications. Jaguar includes a new Mail application designed to eliminate junk mail, iChat AIM-compatible instant messenger, a system-wide Address Book, Inkwell handwriting recognition, QuickTime 6 with MPEG-4, improved Universal Access, an enhanced Finder, Sherlock 3 with Internet Services and Rendezvous, Apple’s revolutionary home networking technology. Mac OS X v10.2 Jaguar will be publicly available August 24 for a suggested retail price of US$129.

    “Jaguar is light years ahead of Windows XP. There’s never been a better time to switch to Mac,” said Steve Jobs, Apple’s CEO. “With Unix at its core, and the most advanced object-oriented environment ever, Mac OS X is delivering more software innovation than our industry has seen in a decade.”


    Another series of Claire Gillespie’s marketing courses for the graphic arts is getting under way at the end of the month. In Sydney on 27 August and Melbourne 29 August in the offices of Heidelberg Australia. Under the auspices of Greg Grace, the one-day course Your Licence to Print Money covers the fundamentals of marketing. “The idea being to design a program that will help those who attend develop a marketing plan for a service-based company in the graphic arts industry,” said Claire. “The course aims at dispelling the myths and acronyms normally associated with marketing, showing how to include marketing as part of their business, it will help them realise a quicker return on investment. A small price to pay for the large sums invested in the latest technologies.”
    For more details and to register, go to the following site.


    Highlights from the newly released Trendwatch Packaging 101 include the fact that the U.S. packaging industry, estimated at US$114 billion and 80 per cent of the size of the commercial printing industry, gets by with only 10 per cent of the plants. Packaging printers are almost three times more positive about their business conditions than commercial printers, with 42 per cent stating business conditions in 2000 were excellent, compared to 14 per cent of commercial printers during the same survey period. For more information on the report go to



    Printing business for sale

    Profitable Gold coast business – established for 30 years with proven profit record. Owner wishes to sell as a going concern. Turnover $1.1 million. Interested? Send an E-mail for more details. Click here.
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    The new Epson PRINT Image Matching II technology in digital cameras and photo printers enables two more levels of adjustment to be transferred from digital cameras. The addition of “Noise Reduction” and “Custom Scene” settings bring the total adjustment feature set supported by P.I.M. II to 14. It can now be implemented with TIFF files as well as the more familiar JPEG capture file formats, and is backwards compatible with cameras utilising the older P.I.M. technology. With P.I.M. digital cameras will be able to set a wider array of image specific parameters for printing, such as gamma level, colour space, contrast, sharpness, brightness, saturation, shadow point, highlight point, colour balance and noise reduction.


    Adobe and Macromedia have done an unusual thing for US companies – they’ve waked away from the courts and settled their patents dispute between them. The rare event came after Adobe claimed Macromedia had violated two of its patents on tabbed palettes that provide a user interface for displaying several sets of information in the same space. Macromedia countered with a claim that Adobe infringed on its patents for a draw-based editor for Web pages and a hierarchical structure editor for Web sites. On May 2, 2002, Adobe won its claim against Macromedia and was awarded US$2.8 million in damages. Eight days later Macromedia won its counter suit against Adobe and was given $4.9 million damages. You can see why they reached an out of court agreement.


    Unexpectedly slow drying of the numbering ink applied on top of varnish caused the first issue of new British five-pound notes to be recalled. The varnish is applied to increase the note’s durability. A solution has been found and the remaining 197 million notes will now have their serial numbers printed -– before the varnish is applied. The original three million smudgies that were recalled will also be reissued after undergoing heat treatment.


    The Australian Paper Industry Council and the New Zealand Forest Industries Council are two of 39 industry bodies on six continents to form the International Council of Forest and Paper Associations (ICFPA). Representing industries accounting for 75 per cent of the world’s paper and more than 50 per cent of the world’s wood production, the ICFPA will work on sustainable development to ensure that environmental, social and economic benefits of our natural resources are available to current and future generations.


    KBA, after an absence of ten years from the Australian market, is wasting no time securing its new reference sites. Following the Vega Press coup in Melbourne (print21online passim) it has now sold a Rapida 105 to P&I Pharmaceuticals in Moorbank in Sydney’s southern suburbs.


    Complex social legislation in France, including the 35-hour work week, is getting up the nose of global printing company Quebecor World. The US company claims that the Gallic imbroglio is inhibiting its ability to redress high labour costs as quickly in France as it did in its North and Latin American printing works. “Our French operations have historically been profitable and as such French law precludes restructuring.”
    However the cost cutters are reporting, with evident glee, that with some facilities now reporting negative earnings, “the company is developing an action plan that is expected to result in the regrouping of certain production facilities and discontinuing the operation of certain non-competitive technologies.”


    And finally……here’s one for all the print engineers who never feel appreciated enough, and that’s about every one.

    There was this print engineer who retired after 30 years. A year later his old company contacted him regarding a seemingly impossible problem they were having with one of the multi-million dollar presses.

    They had tried everything, flown in engineers from Germany, the UK and the USA but to no avail. In desperation, they called on the retired engineer who has solved so many of their problems in the past.

    The engineer took the challenge. He spent a day studying the huge machine. At the end of the day, he marked a small ‘x’ in chalk on a particular component of the press and stated, “This is where your problem is”. The part was replaced and the press started to work perfectly again.
    Later the company received a bill for $20,000 from the engineer for this service. They demanded an itemized accounting of his charges.

    The engineer responded briefly:

    • One chalk mark $1
    • Knowing where to put it $19,999

    It was paid in full and the engineer retired again in peace.

  • JPEG file format under patent threat

    The International Standards Organization, Geneva, has reportedly withdrawn its recognition of JPEG as a standard while expressing its belief that the patent claim is not valid. ISO regulations demand that a standard must be freely available.

    JPEG is widely used throughout printing and graphic arts workflows, especially in those that retain graphics files in RGB to the last moment. It is particularly useful in electronic file transfers, delivering substantial file compression, a valuable saving in costs where transmission is charged by the amount of data transmitted.

    The restrictions would also impact in the compression of images into Acrobat where Adobe uses JPEG or ZIP to produce PDF files. JPEG is a lossy compression method that eliminates image data and may decrease an image’s quality while shrinking the file size. JPEG is applied to 8-bit grayscale images and to 8-bit, 16-bit, and 24-bit colour images when the images have continuous, smooth tones. ZIP, which is a lossless compression, is applied to 2-bit, 4-bit, and 8-bit grayscale images, to 4-bit colour images and indexed 8-bit color images, and to 16-bit and 24-bit colour images when the images have sharp colour changes.

    The patent claim has received a fairly hostile reception from software manufacturers with Robert Pierce, corporate counsel for Adobe, tersely replying, “Adobe is aware of Forgent’s press release and we are evaluating whether it raises issues affecting our business.”

    Forgent Networks has already spent $1 million validating its claim and has contacted up to 50 companies about licensing agreements.

    Patent experts estimate that if the patent stands up to scrutiny it could be worth as much as $300m. With that amount at stake it is expected that many companies will prefer to join in the battle to prove that the original patent, No. 4,698,672, does not apply to the JPEG format. However the patent claim is unlikely to be shrugged off, according to patent experts who describe it as having both a solid technical pedigree in that it was created by research scientists well known in the image compression community, and apparently applies to the JPEG technology.

    The Joint Photographic Experts Group (JPEG) committee has denounced any attempts to gain fees from the standard.

    Richard Clark, managing director of U.K.-based Web software company Elysium and the head of the U.K. JPEG delegation, issued a statement that said: “It has always been a strong goal of the JPEG committee that its standards should be implementable in their baseline form without payment of royalty and license fees, and the committee would like to record their disappointment that some organizations appear to be working in conflict with this goal.”