CompuServe designed the GIF software in 1987, using Lempel-Zev-Welch (LZW) compression technology subsequently patented by Unisys Corporation. In 1994, Unisys and CompuServe reached a licensing agreement for the technology, and Unisys announced that it would start to collect royalties on its patent.
This did not go down well within the industry, as GIFs were a popular way of storing and sending graphics files - and no royalties had previously been required.
Alternatives were developed, the most notable being the open source Portable Network Graphics (PNG) format, but they have never been as popular as GIFs.
The news that the patent has now expired, and that Unisys has no plans to extend it, has been well received by the majority of web users – although, according to the BBC, it is likely that the royalty free GIF will now have a negative impact on PNG developers.