16 October 2002

By Kurt Foss, Planet PDF Editor

According to its quarterly Form I0-Q report filed yesterday with the Securities and Exchange Commission (SEC), Adobe Systems is being countersued by International Typeface Corporation (ITC) and Agfa Monotype Corporation (AMT) over alleged font licensing infractions. In early September Adobe had filed suit to force the resolution of a contractual dispute over whether it has the right to allow its customers to embed International Typeface fonts in electronic documents.

According to the Dow Jones News Service, ITC and AMT allege that Adobe breached existing font licensing agreements with the two companies "by allowing end users of Adobe font software programs to distribute an unlimited number of copies of electronic documents with Adobe font software that generates typefaces embedded in those documents." Adobe claims it "negotiated for and obtained express written licenses from both companies."

According to Adobe's 63-page SEC filing, "AMT and ITC appear to allege that Adobe breached its agreements with them by allowing end users of Adobe font software programs to distribute an unlimited number of copies of electronic documents with Adobe font software that generates AMT and ITC typefaces embedded in those documents." On page 17 of the report, under "Legal Actions," Adobe further notes that the two jointly owned and managed companies "also appear to allege that Adobe violated the Digital Millennium Copyright Act (DMCA), and contributed to or induced the infringement of their copyrights in TrueType font software programs, by distributing Adobe Acrobat 5.0."

Although it disagrees with the allegations and intends to vigorously defend itself, Adobe's report states that "If AMT prevails on its breach of contract claims, AMT may have the right to terminate Adobe's right to distribute any of its products that then still contain font software that generates AMT typefaces."

The ITC/AMT lawsuit was filed in a US District Court in Illinois, and is therefore referenced in the report as the "Illinois Action," as in the following explanation of damages being sought:

"The Illinois Action seeks statutory damages of $200-$2,500 for each copy of Acrobat 5.0 found to violate the DMCA, a claim that Adobe disputes as a matter of law and fact. The Illinois Action also seeks injunctive relief with respect to Acrobat 5.0, although it specifically alleges, correctly, that Adobe no longer distributes Acrobat 5.0."

Additionally, the report states that:

"The Illinois Action seeks an unspecified aggregate dollar amount of damages. A favorable outcome for AMT or ITC in these actions could have a material adverse effect on Adobe's business, financial condition and operating results."

MORE INFO

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• Planet PDF Forum (forum.planetpdf.com)

• PDF Store (www.pdfstore.com)

• PR: Adobe Files Suit to Protect Customers' Rights to Use Fonts - Planet PDF, 3 September 2002

• Adobe, Acrobat face possible DMCA challenge over font embedding - Planet PDF, 6 September 2002

• Monotype: (Font) Embedding and the Digital Millennium Copyright Act - Planet PDF, 5 September 2002

• Adobe filing with the Securities and Exchange Commission - Q3 FY2002 Form 10-Q [PDF: 179kb]

• International Typeface Corporation (www.itcfonts.com)

• Agfa Monotype (www.agfamonotype.com)