PNG (Portable Network Graphics format)

In January 1995 Unisys, the company Compuserve contracted to create the GIF format, announced that they would be enforcing the patent on the LZW compression technique the GIF format uses. This means that commercial developers that include the GIF encoding or decoding algorithms have to pay a license fee to Compuserve. (Users of GIFs or non-commercial developers are not affected.)

However, a number of people banded together and created a completely patent-free graphics format called PNG (pronounced "ping"), the Portable Network Graphics format. PNG is superior to GIF in that it has better compression and supports millions of colours. It is important to note that PNG images are far superior for clarity of image edges on a transparent background because a PNG file saves in millions of colours as opposed to a GIF image which can only save up to 256 colours.