Compaq is being sued for alleged patent infringement relating to a technology which is critical to the MPEG-2 video compression standard.
The lawsuit was issued by a group of six companies and a US university over a development that helps to reduce computer data storage space. A related suit has also been filed in Dusseldorf, Germany.
The group, which includes Matsushita Electric, France Telecom, General Instrument, Mitsubishi Electric and Columbia University, is seeking to block Compaq from selling PCs which use the technology, claiming that it violates 26 patents. The plaintiffs are seeking damages that could amount to hundreds of millions of dollars.
The lawsuit alleges that Compaq is using MPEG technology belonging to MPEG LA, a consortium of 16 patent holders, without permission. Baryn Futa, the consortium's manager and chief executive, said: "This court action is an unfortunate but necessary step to put an end to the patent infringement by Compaq."
Futa claims that for the past three years Compaq has been told a number of times that it can obtain a licence for the patents but has refused to do so.
The suit also alleges that Compaq actively induces its customers to infringe the patents by selling, instructing and encouraging customers to decode a stored MPEG-2 video signal. MPEG-2 allows the storage and playing of full length films on DVD players, via digital satellite television broadcasts and over digital cable television networks.
A Compaq spokeswoman said: "The company cannot comment until we thoroughly review the case."
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