The real solution, of course, is to fight for the abolition of software patents in jurisdictions that currently recognize them (i.e. USA) and to resist the spread of such patents to jurisdictions that currently do not (i.e. EU).
Actually, S3TC was considered so beneficial it became an official part of DirectX in Direct3D 6.0. As such its use is very widespread; anyone using any of the levels of DXTC (1 through 5) is using the algorithm. The Wiki article also mentions it is used in game consoles... I'd guess they're referencing the Xbox/Xbox 360 there. It is still quite relevant today.
The real solution, of course, is to fight for the abolition of software patents in jurisdictions that currently recognize them (i.e. USA) and to resist the spread of such patents to jurisdictions that currently do not (i.e. EU).
The near-compulsory licenses are delivered by Microsoft, who sublicense them through the DXTC setup. S3 gets a slice of the pie each time.
Also, as Ian pointed out, this isn't an idle threat! ATI was taken to court by SGI.
Has anyone tried to contact Via if they would give Mesa licence for this patent for free? This way they would still take payments for this patent on other proprietary platforms without risk of patent workaround or abolition.
Can't AMD, NVIDIA and Intel just come up with an unpatented method of compressing textures? It's not like we're playing the backwards compatibility game, with updates like DX10, DX11, OpenGL 3 and OpenGL 4.
There has actually been proposed an alternative, but apparently it was inferior to S3TC and wasn't adopted by anyone: http://en.wikipedia.org/wiki/FXT1
Alright, seems I was mistaken. I only connected it to Unreal Tournament since it had the explicit option of using S3TC textures if you had a Savage GPU (which could be bypassed). I never saw that option in other games but I guess they must have shortened it to "use compressed textures"...
The reason GPUs still have S3TC onboard is because DXTC, a mandatory part of Direct3D since DirectX 6, is the exact same as S3TC's 1, 3, and 5 formats. (2 and 4 are premultiplied-alpha formats, not terribly useful. They're also omitted from the GL extension.) GPU makers license this stuff from Microsoft as part of their DirectX support; you won't be able to do anything about that.