How ZIP Became the World's File Format – And the Bitter War Behind It

The True Story Behind .ZIP: Lawsuits, Rivalries, and a Legacy

We all use .ZIP files—for sending emails, downloading software, or just compressing files on our desktops. But few realize that this everyday tech staple has a dark and dramatic origin story, filled with lawsuits, community backlash, and personal tragedy.

To understand the birth of the .ZIP file format, we have to rewind to a time when the internet didn’t really exist, and Bulletin Board Systems (BBS) ruled the digital frontier.

Before .ZIP: The Birth of File Compression

It started in the 1950s, when David A. Huffman created Huffman Coding, a revolutionary compression algorithm that reduced data size by assigning shorter codes to more frequent characters. This would become the backbone of many future compression tools.

Fast forward to the early 1980s, and Thom Henderson and Andy Foray founded SEA (Software Enhancement Associates) in New Jersey. They were key players in the growing BBS community and had already worked on tools like SEADOG and Echomail to support networks like FidoNet.

But their real breakthrough came in 1985, when they released ARC—a program that could compress and decompress files with ease using Huffman’s work. ARC became the de facto standard for file sharing on MS-DOS machines and bulletin boards.

And, in the spirit of transparency, SEA made the source code public.

Enter Phil Katz and PKWare

Meanwhile, in Milwaukee, a young programmer named Phil Katz had enrolled in computer science and started writing highly optimized code for fun. He eventually launched his own company, PKWare, and released PKARC, a faster, more efficient competitor to ARC.

The kicker? PKARC used the same file format as SEA’s ARC software—and it was blazing fast thanks to Katz’s use of assembly language, which was perfect for the slow computers of the day.

Even better, PKXARC, Katz’s decompression tool, was completely free, and only compression required a license—just like ARC.

The BBS community flocked to PKWare, praising its speed and convenience. ARC was still around, but PKARC was the new favorite.

The Lawsuit That Shook a Scene

SEA initially tried to settle things quietly. In 1987, Thom Henderson reached out to Katz and asked him to license the ARC format. Katz flatly refused, claiming PKARC was original work created at his mom’s kitchen table.

But SEA had evidence. Spelling errors and comments from ARC's source code were found intact in PKARC, providing clear proof that Katz had copied the code. SEA sued for trademark and copyright infringement in 1988.

But here’s where things got messy.

While SEA was technically in the right, the BBS community saw them as villains. Phil Katz was the scrappy underdog, SEA was the “corporate giant”—despite both being small, family-run operations.

A now-legendary newsgroup message from Keith Petersen sparked outrage:

"I am deleting all copies of SEA's ARC program. It's time to send in your support to Phil for his vastly superior archiving program."

The backlash was swift and widespread. SEA’s reputation was torched, and Phil Katz became a folk hero in the software world.

The Settlement and the Birth of ZIP

In August 1988, the legal battle ended in a settlement:

• Katz paid SEA $22,500 in back royalties
• Another $40,000 in expenses
• A 6.5% royalty on all ARC-compatible software going forward

To dodge these obligations, PKWare abandoned the ARC format and built a new one from scratch: the .ZIP format.

In 1989, Katz released PKZIP and PKUNZIP, launching the ZIP file into the world—and crucially, he published APPNOTE.TXT, the full technical spec for ZIP, allowing anyone to implement it freely.

The community, already loyal to Katz, adopted ZIP instantly. It was faster, open, and seen as a clean break from the ARC drama.

SEA faded. PKWare soared.

What Happened Next?

Sadly, the story doesn’t end triumphantly for everyone.

🎗️ Phil Katz, despite his innovation, struggled with alcoholism. He died alone in a Milwaukee hotel room in 2000 at the age of just 37.

🎗️ Andy Foray, co-founder of SEA, passed away in 2014 after a battle with melanoma.

💻 Thom Henderson left the compression game and moved on to start a small internet service provider, ESVAnet, with his wife—stepping away from the tech spotlight.

🏢 PKWare, though eventually sold in 2001, continues to operate to this day, now focused on data protection and encryption.

Legacy: The ZIP Format Today

The .ZIP format, born out of lawsuits and flame wars, became the universal standard for file compression. It's built into Windows, macOS, and Linux, used by billions of people every day without even thinking about it.

It outlived the ARC format, the Bulletin Board scene, and even the man who created it.

And yet, its story is a powerful reminder that behind every file format is a story—often a messy, human one.

Innovation Through Conflict

The story of .ZIP isn’t just a tale of technology—it’s a tale of passion, rivalry, misunderstanding, and creativity. Phil Katz was a genius. SEA were pioneers. But the lines between right and wrong, fair use and theft, innovation and imitation… were anything but clear.

In the end, .ZIP became the standard, not because it was born cleanly, but because it adapted, opened up, and gave the world something better.

So the next time you extract a .ZIP file on your desktop, remember—you’re using a piece of digital history, forged in the fires of one of the most dramatic software disputes of the '80s.

For more tech lore, digital drama, and retro deep dives, stay archived at Land of Geek Magazine!

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