It's free in "the freedom way", not "the $0 way" (even if somtimes both are closed). Wikipedia said : "A free file format is a file format whose full specification is freely available and for which there are no restrictions (e.g. legal or technical) on its use.".
It's a little hard to explain but if you only use non-free format with non-free software, there is no guarantee you will be able to read YOUR file in the futur. With free formats, you really own your file.
weird, never heard anyone avoid using jpeg for those reasons, for example gimp is free, and you can save to jpeg with that, and there is no way anyone can stop you from opening your jpeg files in the future or demand ownership of them, why do you thing jpegs are used extensively all other the web by both personal and commercial sites?
its a bad example idd cause its kind complicated with jpeg, but took a look into wiki and found this
In February 2006, the United States Patent and Trademark Office agreed to re-examine Forgent's JPEG patent at the request of the Public Patent Foundation.[20] On May 26, 2006 the USPTO found the patent invalid based on prior art. The USPTO also found that Forgent knew about the prior art, and did not tell the Patent Office, making any appeal to reinstate the patent highly unlikely to succeed.
I know, that's why I said "Jpeg is maybe not the best example". I read http://en.wikipedia.org/wiki/JPEG#Patent_issues and until it won't be considered as free by everyone, I will roughly consider it as roughly non-free.