BitCom Sofrware manual
What is an .ARC file extension?
SEA vs PKWARE
"In the late 1980s a dispute arose between SEA, maker of the ARC program, and PKWARE (Phil Katz Software). SEA sued Katz for trademark and copyright infringement. The most substantial evidence at trial was from an independent software expert appointed by the court to compare the two programs. He stated that PKARC was a derivative work of ARC, pointing out that comments in both programs were often identical, including spelling errors."
I'm not certain what spelling errors were in the comments in the arc program, however I wrote some software called BitCom which was for the early 1990s era modems. (See)
In the back of the manual, which I archived using the .arc software. It was effectively a copyright tool, because to open the manual meant using the .arc software file compression.
I would disagree that Thom Henderson wrote the software, he more accurately reverse engineered it. In the BitCom manual were several other types of file extension, such as .exe (executable files) and some then in the public domain.
The BitCom software, which was provided free by the modem manufacturer (Hayes and others) was never free, but the BitCom company never paid me for my software, so I still own it.
In the back of the manual is the list of files in the software package, and a couple of deliberate spelling mistakes which I put there.
The hard copy of the manual which came with the modem had a cover printed in four colours, including orange, yellow, silver, and royal blue, a colour owned exclusively by the British Royal family.
In 1985, Thom Henderson of System Enhancement Associates wrote a program called ARC, based on earlier programs such as ar, that not only grouped files into a single archive file but also compressed them to save disk space, a feature of great importance on early personal computers, where space was very limited and modem transmission speeds were very slow. The archive files produced by ARC had file names ending in ".ARC" and were sometimes called "arc files" as a result.
The source code for ARC was released by SEA in 1986 and subsequently ported to Unix and the Atari ST in 1987 by Howard Chu. This more portable code base was subsequently ported to other platforms including VAX/VMS and IBM System/370 mainframes. Howard's work was also the first to disprove the prevalent belief that Lempel-Ziv encoded files could not be further compressed. Additional compression could be achieved by performing a Huffman Squeeze on the LZW data, and Howard's version of ARC was the first program to demonstrate this property. This hybrid technique was later used in several other compression schemes by Phil Katz and others.
Later, Phil Katz developed his own shareware utilities, PKARC and PKXARC, to create archive files and extract their contents. These files worked with the archive file format used by ARC, and were significantly faster than ARC on the IBM-PC platform due to selective assembly-language coding. Unlike SEA, which combined archive creation and archive file extraction in a single program, Katz divided these functions among two separate utilities, reducing the amount of memory needed to run them. PKARC also allowed the creation of self-extracting archives, which could unpack themselves without requiring an external file extraction utility.
Following the System Enhancement Associates, Inc. vs PKWARE Inc. and Phillip W. Katz lawsuit, SEA withdrew from the shareware market and developed ARC+Plus. This version included a full-screen user interface, with the last known version being 7.12. SEA was eventually sold to a Japanese company[who?] in 1992.
The ARC format is no longer common on PC desktops but most antivirus scanners can still uncompress any ARC archives found in order to detect viruses within the compressed files.
It was very popular during the early days of networked BBS. The file format and the program were both called ARC. The ARC program made obsolete the use of a combination of the SQ program to compress files and the LU program to create .LBR archives, by combining both compression and archiving functions into a single program. Unlike ZIP, ARC is incapable of compressing entire directory trees. The format was subject to controversy in the 1980s—an important event in debates over what would later be known as open formats.
The .arc file extension is often used for several file archive-like file types. For example, the Internet Archive uses its own ARC format to store multiple web resources into a single file . The FreeArc archiver also uses .arc extension, but uses a completely different file format.
On August 2, 1988, the plaintiff and defendants announced a settlement of the lawsuit, which included a Confidential Cross-License Agreement under which SEA licensed PKWARE for all the ARC-compatible programs published by PKWARE during the period beginning with the first release of PKXARC in late 1985 through July 31, 1988, in return for an undisclosed payment. In the agreement, PKWARE paid SEA to obtain a license that allowed the distribution of PKWARE's ARC-compatible programs until January 31, 1989, after which PKWARE would not license, publish or distribute any ARC compatible programs or utilities that process ARC compatible files. In exchange, PKWARE licensed SEA to use its source code for PKWARE's ARC-compatible programs. PKWARE also agreed to cease any use of SEA's trademark 'ARC' and to change the names or marks used with PKWARE's programs to non-confusing designations. The remaining details of the agreement were sealed. In reaching the settlement, the defendants did not admit any fault or wrongdoing. The Wisconsin court order showed defendants was ordered to pay damages to plaintiff for defendants' acts of infringing Plaintiff's copyrights, trademark, and acts of unfair trade practices and unfair competition.
The leaked agreement document revealed under the settlement terms, the defendants had paid plaintiff $22,500 for past royalty payments, and $40,000 for expense reimbursements. In addition, defendants would pay plaintiff a royalty fee of 6.5% of all revenue received for ARC compatible programs on all orders received after the effective date of this Agreement, such revenue including any license fees or shareware registrations received after the expiration of the license, for ARC compatible programs. In exchange, plaintiff would also pay a commission in the amount of 6.5% of any license fees received by plaintiff from any licensee referred to plaintiff by defendants, whether before or after the license termination date.
After the lawsuit, PKWARE released one last version of his PKARC and PKXARC utilities under the new names "PKPAK" and "PKUNPAK", and from then on concentrated on developing the separate programs PKZIP and PKUNZIP, which were based on new and different file compression techniques. However, following the renaming, SEA filed a lawsuit against PKWARE for contempt, for continually using plaintiff's protected mark ARC, by turning ARC from noun into verb in the PKPAK manual. The US district court of the East District of Wisconsin ruled SEA's motion was denied, and the defendant was entitled to recover the legal cost of $500.
The SEA vs. PKWARE dispute quickly expanded into one of the largest controversies the BBS world ever saw. The suit by SEA angered many shareware users who perceived that SEA was a "large, faceless corporation" and Katz was "the little guy". In fact, at the time, both SEA and PKWARE were small home-based companies. However, the community largely sided with Katz, due to the fact that SEA was attempting to retroactively declare the ARC file format to be closed and proprietary. Katz received positive publicity by releasing the APPNOTE.TXT specification documenting the ZIP file format, and declaring that the ZIP file format would always be free for competing software to implement. The net result was that the ARC format quickly dropped out of common use as the predominant compression format that PC-BBSs used for their file archives, and after a brief period of competing formats, the ZIP format was adopted as the predominant standard.
The ZIP file format is a data compression and archive format. A ZIP file contains one or more files that have been compressed, to reduce file size, or stored as is. The ZIP file format permits a number of compression algorithms.
The format was originally created in 1989 by Phil Katz, ( Phillip Walter Katz) and was first implemented in PKWARE's PKZIP utility, as a replacement for the previous ARC compression format by Thom Henderson. The ZIP format is now supported by many software utilities other than PKZIP (see List of file archivers). Microsoft has included built-in ZIP support (under the name "compressed folders") in versions of its Windows operating system since 1998. Apple has included built-in ZIP support in Mac OS X 10.3 and later, along with other compression formats.
The name "zip" (meaning "speed") was suggested by Katz's friend, Robert Mahoney. They wanted to imply that their product would be faster than ARC and other compression formats of the time.
The earliest known version of .ZIP File Format Specification was first published as part of PKZIP 0.9 package under the file APPNOTE.TXT.
The ZIP file format was released into the public domain making it an open format: The ZIP file format is given freely into the public domain and can be claimed neither legally nor morally by any individual, entity or company. The PKWARE company has also stated the base format is in the public domain: Because the format has been dedicated to the public domain, it is possible for other people to write programs which can read .ZIP files. This was a direct result of lawsuits in 1988.  The same understanding is present in the UNIX/LINUX documentation for the FOSS Info-ZIP version which acknowledges: to Phil Katz for placing in the public domain the zip file format, compression format, and .ZIP filename extension, and for accepting minor changes to the file format.
Even so, more recent versions of APPNOTE.TXT at the PKWARE site note ... However, the use or implementation in a product of certain technological aspects set forth in the current APPNOTE, including those with regard to strong encryption, patching, or extended tape operations requires a license from PKWARE. Please contact PKWARE with regard to acquiring a license.
The ZIP file format was created by Phil Katz of PKWARE. He created the format after his company had lawsuits filed against him by Systems Enhancement Associates (SEA) claiming that his archiving products were derivatives of SEA's ARC archiving system.
Similarly named formats
There are numerous other standards and formats using "zip" as part of their name. Phil Katz stated that he wanted to allow the "zip" name for any archive type. For example, ZIP is distinct from gzip, and the latter is defined in an IETF RFC (RFC 1952). Both ZIP and gzip primarily use the DEFLATE algorithm for compression. Likewise, the ZLIB format (IETF RFC 1950) also uses the DEFLATE compression algorithm, but specifies different headers for error and consistency checking. Other common, similarly named formats and programs with different native formats include 7-Zip, bzip2, and rzip.