What do you do when your tech company’s revenues start to go south? Call in the patent lawyers. Five years ago, Vtel was on the wrong end of a dwindling market for videoconferencing hardware. Then a review of the company’s patents unearthed a way to claim one of the core algorithms in JPEG, the ubiquitous digital photo format. So in 2001, Vtel sold its videoconferencing unit, bought out its employees, changed its name to Forgent, and got into developing underexploited intellectual property – a practice known as patent trolling. The JPEG claim and others have reaped more than $100 million in licensing agreements, with millions more in sight if the company wins its current lawsuits against heavyweights like IBM and Apple. Next, Forgent’s legal hounds plan to mine the DVR market by going after TiVo for patent infringement. Which ones? We asked Jay Peterson, Forgent’s CFO, to specify and to explain why he’s let lawyering take precedence over innovation.