ACIS TESTIMONY AT PTO HEARING
ON PATENT PROTECTION FOR SOFTWARE RELATED
INVENTIONS
I am Chris Byrne, Senior Intellectual Property
Counsel for Storage Technology Corporation
(StorageTek).  I am testifying today on behalf of
the American Committee for Interoperable Systems,
or ACIS, to which StorageTek belongs.  ACIS
sincerely appreciates this opportunity to provide
testimony.  I will address Topic A, Questions 4(a)
and 5:
Does the present framework of patent, copyright,
and trade secret law effectively promote
innovation in the field of software?
Do you believe a new form of protection for
computer programs is needed?
Because these questions are two sides of the same
coin, I will respond to them together.
ACIS members include numerous innovative high
technology companies such as Sun Microsystems, NCR
and Broderbund Software.  My own company,
StorageTek, is headquartered in Louisville,
Colorado.  We employ thousands of people worldwide
and we had 1993 revenues of approximately $1.4
billion.  StorageTek designs and manufactures high
performance data storage and retrieval systems for
mainframe, mid-range and networked desk-top
computer systems.  Our customers include many
fortune 200 communication, transportation and
financial companies.  In fact, if you recently
made a phone call, bought an airline ticket or
bought or sold securities, chances are that
records of your activity has been stored on one of
our products, awaiting ready access and retrieval
when necessary.  Our competitors include IBM,
Hitachi and Fujitsu.
Like other ACIS members, we rely heavily upon our
nation's intellectual property system to protect
our most valuable assets:  the innovations of our
engineers, particularly our software engineers.
Without adequate intellectual property protection,
we could not protect and recover our substantial
investment in research and development.  For
instance, at StorageTek alone last year we
invested approximately 10% of our revenues in R&D;
that's over $100 million dollars.  Without that
R&D investment, we simply cannot stay competitive
and in business.  Indeed, last November Vice
President Gore himself toured our substantial R&D
facilities and personally previewed key technology
which we believe will facilitate his grand vision
of the information superhighway.
While all ACIS companies believe in strong
intellectual property rights as the best way to
protect our substantial R&D investments, we also
believe in balance. We believe that overprotection
is as threatening to innovation as
underprotection. The need for this sophisticated
balance is particularly important with respect to
software, which is so pervasive in our economy and
critical to its growth and our national leadership
in high technology.    ACIS believes that it would
be a dangerous act of underprotection to deny
patent protection to software subject matter per
se. But it is an equally dangerous example of over
protection to fail to expeditiously implement
needed corrections in the way we currently do
software patents, if not all our patents. Those
needed corrections are well known and ACIS has
gone on record in support of them.  They include:
_ Improving the software prior art database so
that it is accurate, timely and includes both
patent and non-patent prior art.  The quality of
the software patent database will be directly
related to the quality of the software
patentability examination by the PTO.
_ Working to raising the skill level of the PTO
examiners who are charged with the vital and
difficult task of examining software patent
applications. One way to accomplish this is with
site visits by examiners.  For instance, last year
two groups of Examiners, one group from Art Unit
2308 led by Michael Fleming and another group from
Art Unit 2507 led by Bruce Arnold, visited
StrorageTek.  They spent valuable time with our
engineers and our patent committee learning how we
do R&D and how we make our decisions about which
inventions to seek to patent.  We were very
favorably impressed with the legal and technical
expertise of the examiners, who too often are
merely names at the end of an office action.  To
our mutual benefit, the examiners learned about
the challenges we face in innovative R&D and we
received a much better understanding of the
difficult nature of the examiners' work. Such
educational visits by examiners is one way to help
raise skill  levels.
Implementing key procedural reforms to prevent
applicants from secretly and indefinitely
submerging their applications in the PTO until
they are ready to ambush the public.  Otherwise we
need to speed the examination process and include
accompanying public notice of possible patents.
Many such procedural reforms are considered as a
function of possible global harmonization of
patent law, but such reform in this country should
proceed with or without harmonization.
But all the good work we undertake to improve
software patents will be simply undermined if we
do not address another balancing issue, and that
is the proper balance between patent versus
copyright protection of software.  This is because
copyright, if misapplied,  can achieve patent-like
protection for software functionality. This
misapplication is particularly dangerous when we
consider that there is no examination for
copyright, as there is with patents; a copyright
registration does not specify the boundary line of
protected expression in a work whereas a patent is
explicitly bounded by the terms of its claims; and
copyright protection outlasts patent protection by
at least a factor of four.
This de facto patent protection under copyright is
particularly pernicious with respect to interface
specifications.  Unlike novels and plays, which
stand alone and do not need to interact with other
works, computer programs never stand by
themselves; they function only by interacting with
a computer environment.  If the developer of the
environment can use copyright to prevent other
developers from conforming to the system of rules
governing interaction within the environment - to
its interface specifications - the first developer
can gain a patent-like monopoly without ever
subjecting his system of rules to a patent
examination.  In the absence of competition, the
first developer would have little incentive to
develop more innovative and less costly products.
Moreover, this result is particularly dangerous to
a company such as mine.  StorageTek designs and
manufactures data storage peripherals which
interface with the computers made by the dominant
American, European and Japanese computer vendors.
With de facto patent-like copyright control of
their operating systems, these vendors have the
potential to therefore control functional access
to that interface and therefore exert market
control over subject matter, i.e. the peripheral
device, which is completely beyond the scope of
the copyright itself.  That is dangerous
overprotection of software via copyright.
StorageTek joined ACIS because of our concern that
the courts and the U.S. government were losing
sight of the importance of maintaining a balance
between incentives and competition in the area of
intellectual property protection of software,
particularly copyright protection.  From the
outset, it was our belief that the proper
application of traditional copyright principles
such as the idea/expression dichotomy, merger,
scenes a faire, and the fair use doctrine would
yield the appropriate scope of protection for
software.  Recent court decisions have validated
this.  The Second, Ninth, and Federal Circuits
have all found that copyright does not protect
functional interface specifications.  Further the
Ninth and Federal Circuits have found the reverse
engineering technique known as disassembly to be a
fair use and proper means to achieve functional
interoperability.  In our view, the Altai, Sega,
and Atari decisions are not radical departures
from traditional principles; rather, they return
copyright to its proper course.  We expect that
the First Circuit will soon be consistent and
overturn Judge Keeton's decision in Lotus v.
Borland.
Despite this positive trend in the case law,
however, we fear that the U.S. government has
allowed its laudable goal to improve the balance
of trade to inadvertently divert its attention
from the ultimate goal of our patent and copyright
system:  promote the progress of science and the
useful arts, as explicitly provided for in Article
I, Section 8, Clause 8, of the United States
Constitution.  We applaud the manner and spirit of
these hearings, therefore, as solid indication
that the U.S. government clearly appreciates that
more protection is not necessarily better.  We are
also encouraged that Assistant Attorney General
Bingaman has established a task force to review
and reformulate the Antitrust Division's policies
on intellectual property and antitrust.  We
applaud her observation that the scope of
copyright protection for computer software has
important competitive implications.
In summary, we see no need for a sui generis
software protection law.  Until recently, courts
applied copyright in a manner that overprotected
software, but the Altai, Atari, and Sega decisions
corrected that aberration.  Bad software patents
also dangerously risk overprotecting software, but
let's not throw out the baby with the bath water;
let's move quickly to implement needed
improvements in the way we do our software
patents.
Thank you for this opportunity to present this
testimony and for your kind attention.  I would be
happy to answer any questions you may have.
********
Prepared Remarks of Douglas K. Brotz
Adobe Systems Incorporated
Presented at Public Hearings on Patent Protection
for Software-Related Inventions
Patent and Trademark Office, Department of
Commerce
January 26, 1994
Good morning Mr. Secretary and members of the
panel.  My name is Douglas Brotz.  I am a
Principal Scientist at Adobe Systems Incorporated,
and I am representing the views of Adobe Systems
as well as my own.  Adobe Systems is a software
company based in Mountain View, California.  We
are most well known for our PostScript Language
and Interpreter, which provide the foundation for
desktop and electronic publishing.
Although I am a computer scientist, I became
involved in patents when Adobe was contacted by
another company regarding Adobes possible
infringement of a patent.  I am currently Adobes
technical advisor to our patent attorneys.
Let me make my position on the patentability of
software clear.  I believe that software per se
should not be allowed patent protection.  I take
this position as the creator of software and as
the beneficiary of the rewards that innovative
software can bring in the marketplace.  I do not
take this position because I or my company are
eager to steal the ideas of others in our
industry; Adobe has built its business by creating
new markets with new software.  We take this
position because it is the best policy for
maintaining a healthy software industry, where
innovative companies can prosper.
The problems inherent in certain aspects of the
patent process for software-related inventions are
well known.  The difficulties of finding and
citing prior art, the problems of obviousness, the
difficulties of adequate specification for
software are a few of these problems.
However, I argue that software should not be
patented not because it is difficult to do so, but
because it is wrong to do so.
The software marketplace requires constant
innovation, regardless of whether computer
programs can be patented.  Indeed, the fundamental
computer programs and concepts on which the entire
industry is based were conceived in an era when
software was considered to be unpatentable.  For
example, when we at Adobe founded a company on the
concept of software to revolutionize the world of
printing, we believed there was no possibility of
patenting our work.  That belief did not stop us
from creating that software, nor did it deter the
savvy venture capitalists who helped us with early
investment.  We have done very well despite our
having no patents on our original work.
On the other hand, the emergence in recent years
of patents on software has hurt Adobe and the
industry.  A patent litigation tax is one
impediment to our financial health that our
industry can ill afford.  Resources that could
have been used to further innovation have been
diverted to the patent problem.  Engineers and
scientists such as myself, who could have been
creating new software, instead are working on
analyzing patents, applying for patents and
preparing defenses.  Revenues are being sunk into
legal costs instead of into research and
development.  It is clear to me that the
constitutional mandate To promote progress in the
useful arts is not served by the issuance of
patents on software.
Let me illustrate this burden with figures.  The
case Information International, Inc. v. Adobe, et
al. was filed five years ago.  Last year, the
trial court ruled for Adobe, finding no
infringement.  In December, the Appeals Court for
the Federal Circuit unanimously affirmed that
judgment.  Yet, in that time, it has cost Adobe
over $4.5 million in legal fees and expenses.  I
have spent over 3500 hours of my time (equivalent
to almost two years of working time), and at least
another thousand hours was spent by others at
Adobe.  Our Chairman of the Board spent a month at
the trial.  This type of company behavior would
not be high on anyones list of ways to promote
progress.
This state of affairs might be acceptable if there
were a corresponding benefit from patents in the
software industry.  However, I see none.
Companies that have trumpeted their fundamental
software patents are not leaders in software
innovation.  Conferring monopoly positions in an
industry that was already the most innovative of
any will promote stagnation rather than increased
innovation.  When companies turn from competing by
offering the best products to earning money by the
threat of patent litigation, we will see our best
hope for job creation in this country disappear.
An industry that still generates tremendous job
growth through the startups of two guys in a
garage will not continue to grow when room for a
third person, a patent attorney, needs to be made
in that garage.
There exists a perfectly adequate vehicle to
protect creators rights in this industrythe
Copyright law.  The nature of software is that it
is a writing, an expression, of mathematical
ideas.  The Copyright law protects the expression,
and it does so without requiring costly and time
consuming proceedings.  For people working in the
fast paced software industry, the way a copyright
is created is ideal.  While feverishly working to
meet deadlines, there is no need to explain what
youve done to a government agency; the very act
of writing the software confers the copyright on
it.
Furthermore, Copyright law confers the correct
level of protection on computer software.
Regardless of what current regulations may say,
the fact is that all computer programs express
mathematical algorithms.  Every part of every
computer program manipulates numbers with logic.
Any software that performs any task does so
through mathematics.  It is inconsistent to hold
that mathematical algorithms are unpatentable
while granting patents on systems composed of
software.  If the Patent Office were truly
following the law, it would recognize the inherent
mathematical nature of software, and it would not
grant patents to software-based inventions.
In the last decade, the Patent Office has been
granting patents on software and algorithms,
regardless of the superficial attempts to cast
claims as systems, methods, or processes.
The Supreme Court did not say in Diamond v. Diehr
that pure software inventions are patentable.  By
adopting this position in its recent practice, the
Patent Office has made a dangerous step that could
decimate the very industry it wishes to protect.
Whenever the Patent Office grants a software
patent, it grants a right to the patent holder to
devastate innocent businesses.  Due to the arcane
nature of this technology, our courts find it very
difficult to distinguish frivolous software patent
lawsuits from legitimate ones.  As a result, a
frivolous plaintiff is in a very strong
blackmailing position, where the defendant can
look forward either to an extortionate settlement
or enormous legal costs.  An excellent remedy
would be to change our law to allow a successful
defendant to recoup legal costs in patent cases.
Until that day arrives, at least our Patent Office
can refrain from granting these dubious patents.
We may hear today from proponents of software
patents who will claim that these patents can
protect the independent inventor.  This belief is
a delusion.  The expensive patent process protects
the large, methodical corporation that can afford
to apply for scores of patents much more than it
protects the poorly capitalized lone inventor.
And, when that inventor tries to produce his
invention, he may well find that those large
corporations can ruin his own business with their
large software patent portfolios.
In summary, these are my main points.
1.	The software industry thrived without
patents, creating its fundamental base in an era
of no software patents.
2.	Software patents harm the industry, with no
corresponding benefit.
3.	Software embodies mathematical algorithms.
4.	The law (starting with the constitution)
argues against patents for software-related
inventions.
5.	The proper form of protection for software is
Copyright.
As a postscript to the figures on the patent
lawsuit I discussed before, the final figures are
not in.  Although Adobe has been successful twice
already, the plaintiffs are asking for
reconsideration of the unanimous appeal judgment
against them.  These kinds of festering sores are
what our country can ill afford when we are trying
to lead the world in creative industry.
ALPHA Testimony on patent hearings January
26, 1994
or
Will the Software Inventor be a Road Kill on the
Information Superhighway
Commissioner Lehman, I commend your holding
hearings on software patents.  Much has been said
about software patents and it is useful to get the
facts on the record and give people an opportunity
to state their views.
My name is Paul Heckel.  I am the founder and
president of two software companies and a founder
and acting president of ALPHA a non profit
organization of software patentholders.  I have
probably been the software developer who has been
the most active proponent of software patents.
Patent policy is too important to be left to the
lawyers.  Inventors must play an active role.
ALPHA1 is an ad hoc organization of software
patentholders and others interested in software
patents.  While we have only about 20 members,
those members include a dozen software
patentholders, two of whom were on the board of
the Software Publishers Association and three of
whose patents were maligned by the League for
Programming Freedom in various publications.  We
also count among our members a former Commissioner
of Patents and Trademarks.
ALPHA suggests a beginning, as is an appropriate
name for an organization of inventors.  It is an
acronym for Abraham Lincoln Patent Holders
Association.   ALPHA is named after Lincoln for
three reasons.
First, Lincoln was the only president to hold a
patent; indeed, Lincolns last litigation in
private practice was a patent case.
Second, Lincoln was intrigued by technology and a
champion of the small inventor.  As president, he
brought machine guns and breechloaders into use in
the Civil War on his own initiative and he
promoted the use of ironclad warships,
breechloading cannon, incendiary weapons and
aerial reconnaissancemost of these coming from
small inventors.
Third, in trying to abolish slavery, Lincoln found
himself countering arguments that outlawing
slavery abridged ones freedom to own slaves.
The League for Programming Freedom by its very
name similarly tries to justify appropriating the
work of others by claiming a freedom.
ALPHA strongly supports the broadest form of
software patentability.  Inventiveness should be
judged by the content of the invention, not by the
color of the technology.  It  supports improving
the quality of the patent office examination of
patents.  It particularly supports increasing the
professionalism of the corps of patent examiners
by various means including increasing their pay.
Being a patent examiner should be a high prestige
job, not just a stepping stone to a legal
practice.  We generally support the positions of
the American Bar Association, the Software
Entrepreneurs Forum and the Intellectual Property
Section of the California State Bar.
I also speak on behalf of HyperRacks, a software
company I founded.   The United Inventors
Association of the United States of America, an
umbrella organization of inventors organizations
supports our position.
	Since we expect many people to speak on
behalf of software patents, we feel testimony
based on the personal experience of our members
would be more useful here.   Three of the alpha
members listed below had planned to try to testify
here but just could not make the time.  I mention
this because many of the entrepreneurs who can
most speak to the importance of patents find their
businesses keep them much to busy to get involved
in public policy issues which can have a major
effect on them.
The Morgans
Mike and Susan Morgan founded SoftView and
developed MacInTax and a forms generation product.
They eventually sold the company to ChipSoft.  The
fact that they had applied for software patents
made it easier to raise money.  As Susan told me,
When the venture capitalists asked how we would
protect ourselves against, say, Microsoft coming
out with a competitive product and stealing our
market, the fact that I said we had applied for
patents put that problem to bed.  It makes the VCs
feel much more comfortable and thats a big
difference.  Mike and Susan have started their
second software company and are applying for
several patents.  At this early stage they have
already hired two programmers. Their business plan
is to license technology to other companies and
they expect it will be lot easier with patents.
Tom Cannon
Tom Cannon founded SuperVend to develop his
invention: kiosks which let a user select greeting
cards from a laser disk, add a personal message
and print them out.  This invention replaces the
long racks of greeting cards, with kiosks having a
much  smaller footprint.  As a result, this
invention will likely be used in supermarkets and
department stores and so threatens to disrupt the
current marketing channels.  This is an example of
why established companies dont like innovation.
Hallmark tried to take his invention by filing an
interference based on a patent Hallmark had filed
earlier, and what Tom feels is a much different,
invention.  Because Tom had received a patent and
was advised he had a good interference case he was
able to sell his company on an attractive basis.
He is developing the technology further.
Reed Hastings
Reed Hasting founded Pure Software, a company to
develop his invention which helps software
developers detect errors so improve the quality of
their programs.   The result is highly reliable
code.  He started the business, became profitable
and then raise $2,000,000 in investment from
venture capitalists.   He said patents were
important in encouraging him to start his venture,
and they helped convince venture capitalist to
invest in his company.   Recently he found out
that one of the established companies in his
market had incorporated Reeds invention into
their product and he is having to face how to deal
with those that would use technology he pioneered.
Dr. Robert Markison
Dr. Robert Markison is associated with the
University of California at San Francisco as an
associate clinical professor of surgery.  His
specialties are trauma  and hand surgery.   He is
a leading expert on computer keyboard-caused
repetitive strain injuryan affliction which may
afflict 15 to 30% of keyboard users.  He is also a
member of the American Collage of Physician
Inventors and holds several patents.  Dr. Markison
also uses copyright protection and when Oracle
recently demonstrated its capabilities for the
information superhighway they came to him and
licensed his HyperCard-based application Salvaging
a patient with a stab wound to the heart to
demonstrate Oracles capabilities.
Commissioner Lehman, Oracle has a product called
Oracle Card which is generally considered to be
similar to, if not a clone of, HyperCard the
product my company sued Apple computer for patent
infringement on, and on which Apple settled and
took out a license.  Oracle has not provided an
effective response to my notifying them about my
patent.  Given that Oracle seems to respect
copyrights.  I am looking forward to their
testimony on software patents.
 Commissioner Lehman, Dr. Markison has asked me to
tell you that he has seen first hand the
emotional and financial damage done to independent
inventors whose inventions are ripped off by big
companies. and that he fears many small
inventors will be road kills on the information
superhighway.
Elon Gasper
Elon Gasper invented the idea of talking tutors
lip synched animationto help his daughter learn
to read.  He decided to develop his invention he
sold his house, and with that money and much of
the life savings of his relatives he founded a
company, Bright Star.  Over time he raised
$3,500,000 in 3 rounds of venture financing.
Recently, he  sold out on a 5 year performance
based payout.  Elons investors held up one round
of financing until they got a notice of allowance
on a pending patent.   This suggests the
importance of timely patent prosecution.  Elon
told me that without patents, or at least patents
pending, he would never have started the company,
nor would his investors have invested.    Elon has
licensed his patents for recurring revenue .
Bright Star, a company that would not exist
without its software patents, currently employs 33
people.  His product have helped tens of thousands
of children learn to read faster and better.
Hal Nissley
Hal Nissley invests in Silicon Valley startups
often playing an active role such as being on the
board.   With his contacts he often brings other
investors into his deals.  Currently he is
invested in four companies which have software
patents or are in the process of getting them.  He
says patents are a major factor in any decision to
invest, especially in software companies where an
established company has major marketing and
financial advantages over a startup.
Paul Heckel
In 1982 I founded a company, based on a new
computer metaphor. The fact my idea was patentable
gave me more confidence in starting the company
and it helped me raise money from investors.   I
raised about $400,000 in two rounds, mostly from
friends and former clients. We had four people on
the payroll for a while and we brought two
products to the market.  While we were able to
prove our concept and build a base of happy users,
we never attained a positive cash flow largely
because our initial marketing efforts were on a
dieing computerthe Atari ST.
Having been granted a patent by the U.S.
government, I relied on these rights in shaping my
business plan and making business decisions.  But
when I asserted my patents, I found out that big
companies rarely respect patents unless you sue
them.  Patents, I found, were judged, not by the
content of their inventiveness, but by the color
of the patentholders bank account.
Apple Computer, to whom we had shown our product,
came out with HyperCard.  It incorporated many of
our ideas and infringed our patent.  We got a
contingency fee lawyer to sue Apple for
infringement.  Ultimately, Apple settled with us,
recognized our patents and took out a license.
Later when IBM bundled a product that the world
considers to be a HyperCard clone we tried to deal
with IBM to little effect.  The stories of my
struggles getting Apple and IBM to recognize my
patents is told in the second edition of my book.2
IBM claimed to have prior art on my patent and
which the refused to show me.  Why is there a
double standard in that suspected infringers have
no obligation to show prior art of which they are
aware, but patent applicants are?  IBM pressured
my publisher not to publish my description of
their treatment of an inventor, foreshadowing what
I would find to be a recurring attempt to keep the
pro-software patent side of the argument out of
the general and trade press.
I sent one patent back to the patent office for
reexam and another for reissue after settling with
Apple figuring when I got the patents back I would
have a much clearer idea my coverage and would be
able to restart my company.  While the reexam came
out three months ago, the reissue is still in
process.  It has been there almost four years.  It
took the United States less time to win World War
II than it is taking the patent office to reissue
my patent.  I know of several other people who
have had similar experiences.    The problem seems
to me to be systemic and requires changes to
patent office procedures to ensure that the most
critical patents get a higher priority for
examination.   This, I believe, requires changing
the incentive structure for examiners. It appears
to me that examiners want to do a good job,
especially on critical patents, but the system
penalizes them for putting in what they feel is
the necessary time on such cases.   It is
difficult for me to make business decisions or
raise money until I know the coverage of my
patents, and I cant know that until the patent
office issues a notice of allowance.  The effect
is that I have not been able to upgrade our
product.  This delay has been devastating to my
company in that we have missed a window of
opportunity to bring out an improved version of
our product.   Now rather than being a product
development company as we would like to be, it
looks like we will be a licensing company.
I have twice been suffered what appears to me to
be clear malpractice on the part of my attorneys.
The first time was in my litigation against Apple
which I describe in my book. 3  The second
occurred when a patent lawyer I had just fired put
attorney client confidential information on record
at the patent office.  I have twice been to court
to observe patent lawsuits.4   In both cases the
alleged infringer charged inequitable conduct and
argued that the patent should be invalidated even
though the fault was entirely the fault of the
attorney.  In the first case (as I point out
later), the attorney seems to have lied on the
stand to avoid a malpractice suit, and in the
second case much of the testimony had to do with a
malpractice case the patentholder filed against
his former attorney and  which was settled for $8
million.  I expect most of the sloppy lawyering
and malpractice goes undetected, or is not acted
upon because clients are naive.  I believe that
this greatly damages the patent system as it means
there are fewer successful innovators to act as
role models to those who would innovate.
After Apple issued a press release saying my
patents were valid and Apple was taking out a
license, I found myself and my patents maligned in
the business and trade press. What I found most
frustrating was that those in the press who
attacked software patents refused to let a
software developer present the pro-patent side.
Many refused even to discuss the issue.
The National Academies of Science and of
Engineering published an article entitled Why
Patents are bad for Software  in their house
organ, Issues in Science and Technology. It was
coauthored by Mr.Stallman and was filled with
misleading information, attacking several patent,
including mine.  The article drew a stinging
letter from Patent Commissioner Manbeck, but
Issues would not print a response from me or any
software developer.
 The League for Programming Freedom has repeatedly
framed the issues as patent lawyers like software
patents and software developers do not.  The only
people I saw publicly defending software patents
were patent lawyers, lending credence to Mr
Stallmans view.  I felt patents were particularly
valuable for software developers and U.S.
competitiveness and felt that it was important for
software developers to make the case for software
patents.  One of my concerns was that small
innovative software developersthe most creative
part of the communitywould not use patents and
the result would hurt the software industry and
U.S. competitiveness.  And so I founded ALPHA to
counteract the misinformation on software patents.
The description surrounding my patent in the
Issues and other articles authored by Mr. Stallman
or The League for Programming Freedom  were at
best grossly misleading.  Suspecting that the
other patents might have been mischaracterized, I
contacted the named inventors.  Shortly
thereafter, the Association for Computing
Machinery published another of Mr. Stallmans
attacks on software patents.  But the ACM, unlike
organizations like the Licensing Executives
Society5 and the National Academies of Science and
Technology, agreed to let a software developer
defend software patents. I wrote a twenty-page
article, Debunking the Software Patent Myths.6 The
ACM also ran several followup letters on both
sides of the question in following issues.  I want
to commend the ACM for presenting both sides of
the software patent issue.  In a similar vein, I
would like to commend Commisioner Lehman for
holding these hearings and letting everyone
present their views, the facts, and the analyses
on which they are based.
Over time I have begun to understand how the
system works.  Most big companies are in favor of
software patents in the same way people are in
favor of trash incinerators.  Not in my back yard.
As a result, people who villify software patents
or any patentsserve the interests of companies
that use patents.  In a sense it discourages
competitors from building the equivalent of a
trash incinerator in their back yard.  As a result
the established companies might take a formal
position in favor of software patents, but it is
not in their interest to fight for them in public.
Why educate your competitors?
When I investigated the patents The League for
Programming Freedom  attacked, I found the very
patents he chose to argue against software
patents, provide devastating evidence against his
case.  I refer to my Computer Lawyer7 article
which is mainly an abridgement of my ACM article.
The League for Programming Freedom  referred to 9
patents.  While 9 is a small number, it is enough
for a rough analysis.  This is what I found:
1. All 9 patents protected commercial products.
2.  Software patent are stimulating new business
formation.  Four of the nine patents were held by
companies that were started to exploit the
patented technology.  A fifth patent was filed by
a company that had been in business for only  a
few years. This is a startling figure.
Commissioner Lehman, doesnt this strongly suggest
software patents stimulate new entrepreneurial
businesses?
3.  Software patents stimulate the commercial
introduction of fundamental advances by small
entities. Three of the patents held by small
companies introduced technologies that have since
been widely adopted.
4. Where similar-size companies had a dispute,
they settled differences quickly without
litigation.
5. Patent piracy by large entities appears to be
common and small entities have a tough time
getting their rights respected.  Four of the five
small companies had had to sue to enforce their
patent rights.  The one case were infringement was
resolved without a lawsuit was where both
companies were small.  I suggest this is a major
problem.  Patents are not respected in practiceat
least  big companies dont respect the patents of
small companies.  Since I wrote this article I
have talked to several inventors in many different
technologies who have had to enforce their patents
against larger entities and their experience only
serves to reinforce this finding.
6. Small entities using patents are exceptionally
cost-effective in encouraging innovation
especially compared to federal funding.   This
last point is illustrated by the following table.
Innovation	Commercial	 Efficacy	Cost
	Cost-effectiveness
Source	Products	(Patents Asserted)
	(000,000/yr)
Large entity	4	2	$30,000	33,333
Small entity 	 5	 5	$10,000	 250,000
Federally funded	0	1 (assumed)
	$487,000,000	1.03
If someone invents something, gets a patent on it,
starts a company to  exploit the invention, and
asserts his patent against someone he believes is
infringing, such a person is doing what U.S policy
is trying to encourage.  I suggest the number of
such instances is a measure of efficacy of
innovation.  Consider the cost of innovation from
the taxpayers perspective.   2 million dollars
were allocated from the public treasury to fund
the patent office in 1989 and this was used to
calculate the costs of small and large entity
patenting.  We also used the amount of money
funded for Computer Science R & D in 1989 as the
cost of federally funded innovation.  We can
calculate measures of effectiveness and find that
from the taxpayers point of view large entities
are 33,000 times as cost effective as federally
funded research, and small entities are 250,000
times as cost-effective as federally funded
research.
Might I suggest we evaluate federal funding of the
PTO and research on the same basis of cost
effectiveness to the taxpayers.
In considering funding of the information
superhighway, I suggest you consider the great
contribution the patent system can make because of
the great cost effectiveness of entrepreneurial
inventors.
Stallmans data is sparse; the underlying model,
crude; and the calculations, rough.  I think we
would all welcome a more sophisticated analysis
based on a larger data base of patents.  However,
this data present strong prima facie evidence that
patenting is an extremely cost effective way for
encouraging innovation in software.  Remember, I
did not select the sample to analyze.  The League
for Programming Freedom did.  These results are
based on their sample.
Commissioner Lehman, based on Stallmans data,  I
suggest it would be good public policy to
completely fund the small entity patent office
from the general fund, say by allocating a 1/2%
override on all federally funded R & D.
As the Commissioner may remember I testified at
the harmonization hearings.  The thrust of my
testimony their was the importance of the
entrepreneurial inventor and thus patents to what
I called the ecology of innovation.   Having
talked with about 20 non-software inventors who
had tried to enforce their patents, I have an
experience base to say that innovation works
similarly in software as in other areas.
The Spreadsheet Patent
The story of one of our members, Remy Landau,
again demonstrates the problems of how the patent
system works in practice.  Remy Landau and his
partner Rene Pardo invented what the League for
Programming Freedom called the automatic
recalculation patent for spreadsheets.  This
invention has been held up by the League and the
press as well known, obvious and is frequently
cited as an example of a bad patent.  In my
opinion Pardo and Landau made the major invention
behind the computer spreadsheet.  It is an
invention which is behind the success of Lotus and
other software companies.   It is the source of
Mitch Kapors net worth of over 100 million
dollars.  It is responsible for much of Apples
early success which provided the profits they used
to  fund the Macintosh development.
Pardo and Landau made their invention and filed
for patents on it in 197024 years ago and have
yet to receive dime one for their invention.
VisiCalc was introduced in 1978.  Pardo and Landau
made their invention in 1970.  The Pardo/Landau
patent does not refer to display devices, nor does
it use the term spreadsheet.  Their invention is
an improvement on BASIC a terminal based computer
language.   Anyone who reads the patent can see
that their invention was to take the BASIC
statement numbers, split them in two parts, and
use the two parts as indices into an array of
formulas.  They taught how such an array of
formulas could be used to solve business problems
by letting the user place the formulas in the
position where they made visual sense.  They
taught that the computer should determine the
order of recalculation rather than demanding the
user do it as is done in BASIC.   They started a
business, hired people, raised investment funds,
developed a software product to run on timesharing
computers, brought their product to market, and
developed a user base.  It seems clear to me that
they are to the modern spreadsheet what the Wright
Brothers were to the airplane.
The patent system has treated them poorly.  They
got a notice of allowance of their U.S. patent,
but shortly thereafter the Benson decision came
down and the Patent Office withdrew their patent
prior to issue.  It did nothing on the application
for years while resisted issuing patents on
software inventions.    Pardo and Landau appealed
pro se to the CCPA.  That means they were not
represented by lawyers; the appeals court ruled in
their favor in the decision In re Pardo is a
landmark case on software patentability.
You should know the current patent mass is largely
due to IBM whose internal policy was that software
should not be patentable, who headed a government
commission to make it not patentable, and who
filed an Amicus brief in the Benson decision
against patentability.  I mention it here because
that action on IBMs part case a ten year delay in
the issuing of the Pardo/Landau patent8.
The Pardo and Landau patent issued in 1983, 10
years after the Canadian patent.  Commissioner
Lehman, should it take 13 years to issue a patent?
Pardo and Landau unsuccessfully tried to get Lotus
and other companies to respect their patent.  So
in 1989 they did a deal with a third party to fund
the litigation.  When I talked to Remy Landau
shortly after the newspapers had announced the
lawsuit and the columnists had attacked the
patent, I was surprised to have him tell me no one
from the American press had contacted him.
Finance is the area that has been most effected by
computer spreadsheets. The invention may have been
obvious to The League for Programming Freedom  in
the late 1980s with the advantage of hindsight,
but it was not obvious to my former Professor of
Finance who taught Finance at the time of the
invention.  William F. Sharpe, told me that when
he first used VisiCale he was impressed with the
concept behind it. He said he did not find it
obvious.  He has used spreadsheets extensively
since he discovered them.  Indeed, Professor
Sharpe is quite knowledgeable about computers
having used timesharing systems since the early
1960s when he was at RAND. He wrote several
publications including  a book on BASIC and he ran
the Stanford GSB Computer Center in the early
70s.  He is, I might add, a Nobel Laureate in
Economics.
Pardo and Landau are in litigation  against Lotus.
In July of last year I went to hear the first
phase of the trial.
I was shocked at what I was to see in the
courtroom.  I heard a patent attorney in my
opinion commit perjury and testify against his
client to save himself from a malpractice suit.
Pardo and Landau find that the are being accused
of fraud.  This is a standard tactic big company
infringers use when the dont have a case on the
merits. The issue was this:  Did the inventors
intend to mislead the patent office when they had
affidavits filed saying the invention was enabled?
Lotus says that the affidavits should have stated
the affiant had a post financial association with
the inventors.  The only association the affiants
had with the inventors was prior to filing the
affidavits.  Only one fellow worked for Pardos
fledgling company for 6-8 weeks a year or two
earlier.  Lotus says the inventors intended to
deceive the patent office by not mentioning the
prior association in the affidavits.  If the
inventors had intended to mislead the patent
office on a material matter then they committed
fraud.   I dont believe the issue was very
material, Examiners tell me they dont place a
great deal of reliance of affidavits anyway, and
there seems little doubt but that the invention
was enabled.  In short, Lotus was nitpicking the
patent prosecution.
The inventors testified that they though the
affiant were disinterested because they had no
current interest in their invention.  The
inventors patent lawyer testified in open court
under oath that he helped the affiants prepare the
affidavits, did not verify their lack of
association with the inventors, but relied on his
having told the inventors to get affiants who had
no such association. I didnt find his testimony
credible.   In their closing arguments, the
inventors attorney called the patent attorney a
liar and even the Lotus lawyer acknowledged
discrepancies between deposition and court
testimony.  In my opinion the patent lawyer
perjured himself on the stand in open court and
testified against his clients so as to protect
himself from a malpractice suit.  I have talked to
enough inventors to know that patent attorney
malpractice is not unusual in either patent
prosecution or litigation.   I only marvel at what
I was to see in open court.
Although the trial was in July, the decision has
yet to come down.   I fully realize the difficulty
patent attorneys face in patent prosecution and
the multiple opportunities for errors.  However, I
believe clear and willful actions should be be
treated severely.
Commissioner Lehman, having talked to may people,
lawyers and inventors alike, I have concluded that
not only  is poor quality work by patent lawyers
common, but the lawyers often act to cover up
their errors and so do more damage to the interest
of their clients.   I suggest such actions by
patent lawyers damages U.S. patent system and
should be punished so as to send a clear signal to
the patent community.  It is particularly damaging
to small inventors who, unlike big companies, do
not have the sophistication to judge the quality
of their lawyers work until it is too late.  When
Judge Sotomeyer hands down her decision, I
respectfully request you review that decision to
see if it is appropriate to suspend Mr. Rhodes
from practice under 35 USC 32.
Twenty-four years ago Pardo and Landau made one of
the major computer software inventions.  Their
invention has been one of the driving forces of
the personal computer industry.  They were
responsible for a landmark computer software
decisions, In re Pardo which the pursued pro se.
And while many people have become
multimillionaires on the Pardo/Landau invention,
Pardo and Landau have yet to receive dime one for
their contribution.
My discussions with many inventors whose
inventions have been ripped off shows that this
case may be extreme but that it is not unusual.
Commisioner Lehman, is this image we want to
project of what happens to inventors who try to
benefit society by inventing something?
Few things are as strongly based in our history as
the patent system.  James Madison proposed the
patent clause in the Constitution. George
Washington walked the first patent law through
Congress, Thomas Jefferson acted as the first
patent commissioner.  Franklin and Jefferson were
amateur inventors.   Lincoln was an inventor and
an active proponent of patents and invention.  Did
these founders of our country intend that the
inventor have the rights to his invention as the
Constitution says?  Or did they intend that the
benefit go to the inventors widow and children?
Or to Lawyers?  Did our founding fathers intend to
put up such a thicket of laws and regulations that
patent attorneys would be forced to perjure
themselves and testify or act against their
clients interests to avoid a malpractice suit?
Recommendations:
If I might make some specific recommendations:
1. Either get rid of patents entirely or make them
meaningful legal instruments in the hands of small
inventors.  We should not continue to perpetuate a
system that encourages  naive inventors to spend
their time and money, to get money from  friends
and relatives, and to bring their inventions to
market motivated by being given patents rights, if
those rights are not meaningful.  We need
legislation and court decisions that will cause
companies analyzing infringement to reach the same
conclusion when they do an economic analysis as
the they do when they do a moral and legal
analysis.
2. We need to drastically reduce the amount of
time it takes to get a patent issued and to do
reissues and reexaminations.  No one benefits from
the uncertainty of what is protected by a patent.
3. Currently if an attorney commits malpractice,
the inventor must file a malpractice lawsuit to
collect damagesusually years after the patent was
filed.  Change the law to prevent the invalidation
of patents because of the the actions of the
attorneys in prosecuting the patent.  If
infringers are to benefit in not having to
recognize a patent because of errors of the
prosecuting attorney, then their remedy should be
to recover damages from the attorney who erred in
prosecuting the patent.
4. I urge you to find some way to change the
general climate so inventors are seen as heros and
not as villains.    The culture which has led to
these hearings seems to be one which denies real
inventors both credit and financial reward for
their inventions.
5. Require that suspected infringers bring prior
art of which they are aware to the attention of
the patent office.  Eliminate the double standard
for producing prior art.
6.  We should codify the rules of engagement in
potential patent disputes so as to make level the
playing field between large and small, and rich
and poor.   As I see it, the current rules
encourage game playing and often end up by
exploding into wasteful litigation due to a slight
miscalculation on one side.  The rules should be
designed to encourage the disclosure of all
relevant facts by all parties and encourage
settlement early on.  They should also be designed
to encourage the principles to deal directly with
each with the assistance of, rather than through
their attorneys.
6.   Improve the quality of the patent examiners
corps by upgrading status and pay.
7. I suggest affirmative action in favor of
software company patentholders to rectify the
wrongs afflicted by past prejudice.  I suggest
that the patent office review the Amicus briefs
filed by IBM, CBEMA and others in the Benson and
similar cases to identify those companies who
spoke against the patentability of software.  Just
as we we have affirmative action to rectify the
wrongs of past racial prejudice, we should have
affirmative action to rectify the wrongs of
prejudice against software inventors.   I suggest
that the identified companies (a) be given lower
priority  by the patent office in examining their
patents; (b) not be allowed to assert their
patents against small software companies; and(c)
not be allowed to use non-patent prior art to
invalidate issued patents asserted against them.
Should not those who caused the current software
patent mess be the ones to suffer from the
problems caused by that mess?
In Conclusion
Commisioner Lehman, I think I have been able to
show ample evidence that the patent system does
encourage people to start companies and introduce
innovative products.   Unfortunately, I think it
shows that many of those so encouraged have been
naive to the realities of patent enforcement.  I
suggest we will have even more innovation if the
system would operate so as to better enforce
patents even when held by those who can ill afford
to litigate.
Commissioner Lehman, some people have felt that
you are would not be a good commissioner because
you are a copyright lawyer rather than a patent
lawyer.  I admit to having been one of them.  But
I am of a different view now.  You have an
advantage over patent lawyers.  You can look at
the patent process from the perspective of a
copyright lawyer and how much more successful the
copyright is in ensuring rights holders can
enforce their rights independent of their
financial worth.   While inadequate patent
protection has caused us to lose many of our
innovations to foreigners, our stronger copyright
protection has been a huge moneymaker for the
United States especially in the film industry.
Why are there criminal laws against copyright
infringement but not against patent infringement?
Why is it that when a possible infringer considers
whether to respect a patent he asks not about the
content of the patent, but the color of the
inventors financial worth?  My recommendation to
you is that you seek to get for patentholders the
respect that copyright holders have, and seek to
get for patent infringers the disrespect that
copyright infringers have.  If you in your term of
office you can bring the patent system to the
level of the copyright system as it works in
practice, you tenure as Commissioner, your place
in history will be assured.
TESTIMONY ON PATENT PROTECTION FOR SOFTWARE
RELATED INVENTIONS
I am Jonathan Band, a partner in the
Intellectual Property Group of the Washington,
D.C. office of Morrison & Foerster.  The views I
express here today are my own.
I attended the PTO hearings two weeks ago in San
Jose, and I would like to share with you three
observations based not on the testimony -- which
you heard -- but on my conversations with many of
the Silicon Valley spectators. This is, if you
will, a report from the peanut gallery.
First, using Ron Laurie's perceptive
classification, a small but not insignificant
minority of the audience fell into the "software
patents are bad" category, while a majority fell
into the "bad software patents are bad" category.
My further discussions with the "software patents
are bad" adherents revealed that they were
confused and frustrated by the case law on the
patentability of software related inventions, and
that they had no confidence in the ability of the
PTO to search the prior art.  This suggests that
if the PTO successfully addresses the concerns of
the "bad software patents are bad" people, many of
"software patents are bad" people will be
satisfied as well.
Second, and following from the first point, I
detected a strong mandate for serious procedural
reforms that would improve the quality of software
patents and eliminate submarine patents.  The PTO
has already announced that it will introduce
legislation establishing a 20 year term from
filing and reforming the reexamination process.
These proposals met with near universal support in
San Jose. There was also strong support for pre-
grant publication of applications and reform of
the continuation and division practice.  The PTO
should give these and the many other amendments
suggested close consideration.  As the PTO reviews
these proposals, it should place the interests of
the inventing community ahead of those of the
patent bar, the primary beneficiaries of the
current obfuscation and litigation.  Reform of the
patent system to make it simpler and more
predictable while eliminating the game-playing and
the lawsuits would be a lasting legacy of the
Clinton Administration in the technological
history of our nation.
Speaking of game-playing and the patent bar, the
current hopelessly confusing state of the case law
on the patentability of software related
inventions means that the success of a software
patent application turns more on the cleverness of
the patent lawyer than on the quality of the
invention.  This, of course, is backwards.  The
PTO should establish a commission consisting of
programmers, law professors, practitioners, and
jurists to establish some order in this area.
My third observation on the San Jose hearings is
that there is an underlying concern in the
inventing community that in the past decade the
pendulum may have swung from too little
intellectual property protection to too much I.P.
protection.  As Judge Kozinski of the Ninth
Circuit has observed, "overprotecting intellectual
property is as harmful as underprotecting it."
Judge Kozinski further notes that "creativity is
impossible without a rich public domain."  For
this reason, the intellectual property laws are
full of what Judge Kozinski calls "careful
balances between what's set aside for the owner
and what's left in the public domain for the rest
of us."  Because patents and copyrights are
monopolies created by the intellectual property
laws, regulation of those monopolies is the
responsibility primarily of the intellectual
property laws, and only secondarily of the
antitrust laws.  Given the PTO Commissioner's
emerging role as the Administration's intellectual
property policy advisor, the PTO must be vigilant
about maintaining the balance between protection
and competition.
Thank you for your attention.
TESTIMONY OF JEFFREY A. BERKOWITZ,
FINNEGAN, HENDERSON ET AL.
Good afternoon Mr. Commissioner and other
distinguished members of today's panel.  I am
Jeffrey Berkowitz, an associate with the
intellectual property firm of Finnegan, Henderson,
Farabow, Garrett and Dunner in its Washington,
D.C. offices. This afternoon I would like to
address the tenth question listed in Topic B of
the Notice for today's hearing.  My comments are
my own and not necessarily those of my law firm.
In question number ten the PTO asks for comments
on how the PTO should handle the submission of
computer program code listings.
Specifically, the PTO seeks comments on the
following four items:
(1)	Should the PTO require submission of program
code listings?
(2)	Should the PTO require submission of code
listings in machine readable format only?
(3)	Should program code listings be included in
patent documents or should they be made available
only through a publicly accessible database?
(4)	What hardships would patent applicants face
if these requirements were imposed?
In my opinion, the PTO should not require
submission of program code listings.  The
following discussion concerning my opinions on the
first item of question ten necessarily provides my
opinion on the remaining items.
Currently, applicants may file program code
listings with the PTO, and I emphasis the word
"may".  Because these listings, particularly when
in machine readable format, can take hundreds of
pages, it is clear that the PTO must deal with
substantial financial, printing, and logistical
problems when an applicant chooses to submit a
program listing.  In an effort to deal with these
problems, the PTO promulgated 37 C.F.R.  1.96,
under which program listings must be included in
the application itself, either in the
specification or as part of the drawings, if the
listing is under 11 pages in length.  If the
listing is 11 or more pages in length, then the
listing may be submitted in the form of a
"microfiche appendix," which will not be part of
the
printed patent but will become available to the
public once the patent is issued.
Some applicants choose to submit program code
listings (regardless of the number of pages) to
ensure that their applications comply with the
statutory requirements of  112, first paragraph.
However, if a programmer of ordinary skill in the
art could write a program (without undue
experimentation) from the disclosure of a
program-less application (that is, an application
for a software-related invention absent a program
listing), and if such a listing is not required to
satisfy other statutory requirements (for example,
the best mode requirement of  112, second
paragraph), then the applicant would not need to
file a program code listing for the invention.
Based on this reasoning, many applicants typically
choose not to file program code listings.
A requirement for program listings would prevent
applicants from filing applications until product
development is complete, which would further delay
the process of filing applications, examining
applications, and issuing patents for
software-related inventions.  In many of the
software-related patent applications that I have
written and prosecuted, inventors have not yet
completed development of their software-related
inventions to be patented prior to filing the
application.  Thus, there is no final program
listing to be submitted with the application.
This should not prevent the applicant from filing
an application on his or her invention.  In this
regard it is important to note that, in other
technologies applicants can and do file patent
applications without having completed product
development.
Applicants also choose not to file program code
listings because filing the listings would make
the entire program available to the public which,
in some cases, may divulge important trade secrets
or other information the applicant may not need to
specifically divulge in order to secure patent
protection.  Even if applicants choose to submit
machine readable listings, such listings may be
reverse engineered.  As long as a programmer of
ordinary skill in the art could write a program
(without undue experimentation) from the
disclosure of a program-less application, and if
such a listing is not required to satisfy other
statutory requirements, then the applicant should
not have to file a program code listing for the
invention and divulge important trade secrets.
Furthermore, a requirement for the submission of
program code listings, regardless of the form of
the listings, will only further increase the PTO's
burden in connection with both the examination of
software-related inventions as well as the
practical aspects related to storing program code
listings and making the listings available to the
public.  Examiners do not have time to study
program listings regardless of the form in which
they are submitted to the PTO.  Nor does the PTO
have resources to waste in storing program code
listings and making them available to the public.
Some of the hardships associated with a mandatory
requirement for submission of program listings are
apparent from the above discussion.  There are
also a number of problems associated with the
current microfiche appendix requirements that are
worth mentioning.  First is the availability and
cost
associated with the microfiche appendix
requirements outlined above.  When an applicant
chooses to submit a program listing of 11 or more
pages he or she must locate a company that
provides the microfiche services, a task that is
not so easy, and spend additional money to have
the listing put on microfiche, a cost that may be
high depending upon the length of the program
listing.
Instead, if the PTO believes that it is necessary
to require appendices for program listings, I
suggest that the PTO consider more practical
approaches such as submission of program listings
on a CD-ROM or other mass storage device and in a
format that may be used by Examiners to inspect
efficiently and effectively the program listings.
I believe these other approaches are less
expensive and more accessible to inventors of
software-related inventions than the archaic
microfiche appendices instituted in the current
rules.
Finally, I am also concerned that requiring
submission of program code listings would surely
lead to litigants unnecessarily raising issues
concerning a program listing should the PTO adopt
a submission requirement.  This, however, is
beyond the scope of these hearings.
Thank you for your time today to present my views.
TESTIMONY OF ROBERT H. KOHN
BORLAND INTERNATIONAL, INC.
U.S. Patent & Trademark Office Hearings
on Patenting of Software-Related Inventions
January 26-27, 1994
San Jose, California
Thank you, Commissioner Lehman, for the
opportunity to testify.
A.	Background of the Witness
I am Robert H. Kohn, Vice President of Corporate
Affairs of Borland International, Inc., a leading
developer and marketer of desktop and
client/server computer software, including dBASE,
Quattro Pro, Paradox, Interbase, and Borland C++.
I have worked in the entertainment and computer
software industries my entire career.  My
experience in the software industry includes many
types of application and utility software for both
mainframe and desktop computers.  After a brief
period in private practice and as Associate Editor
of the Entertainment Law Reporter, I joined the
legal department of Ashton-Tate Corporation in
1983.  Until its acquisition by Borland in 1991,
Ashton-Tate was one of the largest software
companies in the world.  In 1985, I left Ashton-
Tate to become associate general counsel to Candle
Corporation, a leading supplier of IBM mainframe
software.  And in 1987, I joined Borland as
General Counsel.
I want to emphasize that I am sensitive to the
need for intellectual property protection on both
a professional and personal level.  My
professional career has focused on protecting the
valuable intellectual property assets of software
companies.  I am also an author myself, having
recently written a reference book on music
licensing that was published by Prentice Hall.  So
I can certainly appreciate the need to protect
intellectual property.
I am testifying today in my capacity as Vice
President and General Counsel of Borland, a
publicly traded, Silicon Valley company.
B.	Enforcement vs. Scope of Protection: The
Important Role of Competition in Promoting
Innovation
On behalf of Borland, I want to comment
specifically on Question 4 in the Hearing Notice
and, if time permits, more generally on questions
regarding the scope of protection for visual
aspects of software programs.  Question 4 asks
whether
the present framework of patent, copyright and
trade secret law:
(a) Effectively promotes innovation in the field
of software?  and
(b) Provides the appropriate level of protection
for software-related inventions?
Like all other software companies, Borland invests
heavily in both the creation and acquisition of
new software products.  And, like other companies,
Borland needs strong governmental enforcement of
existing intellectual property rights, especially
in foreign markets, in order to protect its
investment.  But it is particularly unproductive,
at these hearings and at other forums for public
debate of these issues, to hear two extreme views
espoused:  one group, generally small inventors,
argues for no protection or, perhaps, at best,
very weak protection.  A second group, generally
large companies, addresses the issue of scope
rather than enforcement, arguing that broader
protection for software is necessary and, indeed,
the broader the protection the better.
We believe that much of the polarization you have
heard, and will hear, is the result of a confusion
over what is being debated.  Protectionist
interests, in particular, confuse enforcement of
what is an undisputed intellectual property right
with the underlying scope of intellectual property
protection.  We in the industry all understand
that software, as a product, is particularly
susceptible to unauthorized duplication.  We
therefore need strong enforcement of existing
intellectual property rights to make sure that we
are protected against the piratical copying of our
software.
But issues concerning the enforcement of
intellectual property rights must not be confused
with issues concerning the scope of intellectual
property protection.  It is too easy to wrap
oneself in the proverbial American Flag of anti-
piracy and anti-counterfeiting enforcement.  There
is no dispute that strong anti-piracy enforcement
is required to promote the resources necessary for
research and innovation.  But it does not follow
that, because strong enforcement of intellectual
property promotes innovation, a broader scope of
intellectual property protection will also.
We should understand that many of those who very
responsibly argue for limitations on the scope of
intellectual property protection are not trying to
defend pirates.  They are, rather, trying to
strike a medium under which the proper scope of
intellectual property protection, as established
by Congress and the courts, is respected and
strongly enforced by the administrative branch of
government.
This distinction between the enforcement of
existing rights and a broadening of the underlying
scope of protection was recently addressed at the
1993 Berkeley Roundtable on the International
Economy, in which the Vice President, the Commerce
Secretary and the Commissioner all participated.
The report of the roundtable on "Maintaining
Leadership in Software" states the distinction
between enforcement and scope very clearly:
"Industry representatives argued that the
importance of protecting intellectual property
from theft by commercial counterfeiters and
unscrupulous users must be distinguished from
issues concerning the proper scope of intellectual
property protection.  The government's role in
deterring theft by commercial counterfeiters and
unscrupulous users, through the improvement of
intellectual property laws and simplifying
enforcement of those laws, particularly overseas,
should continue.  But the government should
carefully weigh the important balance between
providing incentives through protection of
intellectual property and promoting innovation
through industrial competition when considering
issues such as reverse engineering, free use of
command structures and other elements required to
promote interoperability among computer software."
(emphasis in original)
Unfortunately, Question 4 in the Hearing Notice,
in our view, heightens rather than diminishes the
confusion and polarization.  Question 4 seems to
be based on a premise that strong protection for
existing intellectual property rights necessarily
implies a greater scope of intellectual property
protection, and, further, that a greater scope of
protection implies a greater amount of innovation.
Implicitly, Question 4 neglects the important role
that competition plays in encouraging innovation.
We believe that the implication inherent in
Question 4 should be the subject of much greater
scrutiny and analysis.
Within the industry we all, or at least most of
us, agree that greater enforcement of existing
intellectual property rights is necessary.  What
has fractionalized the industry is the attempt by
some to use the need for greater enforcement to
attempt to expand the scope of underlying
intellectual property rights, particularly within
the copyright area.  As the Commissioner is aware,
just two weeks ago the Head of the Antitrust
Division, Assistant Attorney General Anne
Bingaman, gave a major speech on the occasion of
the 60th Anniversary of the founding of the
Antitrust Division.  The Assistant Attorney
General recognized the polarization within the
industry that has been caused by attempts to
increase the scope of intellectual property
protection:
"The substantive reach of the exclusive rights
granted under the intellectual property laws also
has been a matter of particular concern and
ferment in the software industry.  The courts and
the agencies have been faced with difficult
decisions about the scope of both patents and
copyrights in this field, as is clear to anyone
who has paid attention to the long series of
important court decisions on computer software
copyrights, including Whelan, Altai, and the
recent decisions in Lotus v. Borland, now under
review in the First Circuit.  The scope of
copyright protection for computer software has, we
believe, important competitive implications, as
well as important implications for incentives to
innovate."
We were particularly heartened to hear the
Assistant Attorney General most eloquently state
her concern about attempts to increase the
underlying scope of intellectual property
protection.  Again please permit me to quote what
she had to say:
"Given my strong belief in competition, I think
courts should be hesitant to read the statutory
grant provisions expansively, but should recognize
the anticompetititve potential of restrictive
practices at or beyond the borders of the clearly
conveyed statutory rights."
While the Assistant Attorney General was directly
addressing only the courts, we believe the same
cautions should apply to the administrative branch
of government as well.
C.	Protection of "Control Mechanisms" and
"Visuals"
Many of the questions to be addressed at these
Hearings deal with the visual aspects of a
computer's screen display.  In evaluating the
proper scope of protection for the visual aspects
of computer programs, we believe that the Patent
and Trademark Office would do well to consider the
analytical framework employed by the engineers and
computer scientists (as opposed to the lawyers and
judges) in the software industry.
As the Commissioner is aware, much of the original
and seminal work in graphical user interface
analysis and design was done at Xerox Corporation
in the  1970's.  The research at Xerox spawned a
wealth of user interfaces, far beyond just those
in Xerox's products -- Apple's Macintosh and LISA,
Hewlett-Packard's New Wave, Microsoft's Windows, X
Windows, and IBM's Office Vision and OS/2, to name
but a few.
Much of the research at Xerox was published in
scholarly papers for distribution both inside and
outside of Xerox.  The most famous of those papers
entitled "A Methodology for User Interface
Design," was published by Xerox Palo Alto Research
Center in January of 1977.  Because of the
enormous importance of that paper, I am going to
attach it to Borland's written comments and I ask
that you consider is as part of these proceedings.
The Xerox research produced a methodology of
interface design that is based upon what the Xerox
researchers called a "taxonomy" or classification
for user interface analysis.  This taxonomy is
designed to permit analysis and evaluation of what
each aspect or component of a user interface does.
The taxonomy was created for software analysis and
not for any legal purpose.  But remarkably, it
dovetails seamlessly with the overall intellectual
property scheme of patents, copyrights and trade
secrets established by Congress.
As the Xerox research concluded, every user
interface has three separable components:  (1) the
user's conceptual model, (2) the "control
mechanism" or "command invocation" of the product,
and (3) the "visuals" (or "information display").
The user's conceptual model is the abstraction
selected by the software developer which users can
relate to the task they are trying to perform.
For example, the "spreadsheet metaphor" is the
conceptual model that underlies Borland Quattro
Pro line of products.  Under our intellectual
property scheme, the "conceptual model" of a
particular piece of software would not be
protectable at all (except, of course, insofar as
it may be protected as a trade secret or under the
terms of a contract or confidential relationship).
The "command invocation" or "control mechanism" of
a user interface is the mechanism that extracts
the functionality built into the software.   It is
a set of actions and results defined in particular
relationships to one another.  Menu items and
keystrokes are part of the control mechanism and
were clearly identified as such by the Xerox
research published in the mid-1970's.  Indeed, the
control mechanism component was originally called
the "Command Language."
Under the intellectual property scheme established
by Congress, the "control mechanism" of a software
product falls within the ambit of the patent law,
specifically, utility patents.   In order to
secure utility patent protection over a "control
mechanism" an inventor should be required to
satisfy the statutory requirements of novelty,
advancement over the prior art, and so forth.
This would be true even if the control mechanism
was a sequence of steps in a visual display.  For
example, if the user entered a database by first
clicking on the picture of a door to simulate
knocking, and then clicking on the picture of the
doorknob to simulate turning it, the sequence of
steps would be part of the control mechanism - and
must satisfy the rigors of patent examination if
it is to be protected.  If the command mechanism
does not meet the rigors of patent protection, it
should not be protected by any other form of
intellectual property protection, such as
copyright.
Finally, in Xerox's terminology, there are the
program's "visuals."  For example, the screen
displays of many sophisticated user interfaces
have a truly separable visual or expressive
component -- images that can be manipulated
through animation techniques.
The Congressional scheme provides for protection
of these "visuals."  Under both the statute and
the case law, the visual display of a computer
program may be protected under the copyright law
if, and only to the extent that, its artistic
features can be identified separately from, and
are capable of existing independently of, the
utilitarian aspects of the software program.  Note
that the definition of computer program under the
copyright law is "a set of statements or
instructions to be used directly in a computer in
order to bring about a certain result."   The
screen display is a "certain result" of the "set
of statements or instructions" that comprise the
underlying computer program and must independently
qualify as a work of authorship.
We understand that there has traditionally been a
role for design patents which overlaps with the
role of copyrights, and that role, insofar as it
relates to computer programs, has not been well
articulated.  The Patent & Trademark Office has
requested comments on the applicability of design
patents to computer software and we are in the
process of formulating our views for a possible
submission on the subject at a future hearing.
Thank you for the opportunity to appear today and
I would be happy to answer any questions from the
panel.
STATEMENT OF THE BUSINESS SOFTWARE ALLIANCE
Before the Commissioner of Patents and Trademarks
February 10, 1994
I.	Introduction
Mr. Secretary:
My name is Dianne Callan.  I am the Deputy General
Counsel of Lotus Development Corporation of
Cambridge, Massachusetts.  I am appearing here
today on behalf of the Business Software Alliance
("BSA").  On behalf of the BSA, I would like to
thank you for convening this hearing to consider
the many issues associated with the patenting of
software-related inventions.  We appreciate having
the opportunity to participate in this hearing.
The BSA was organized in 1988 to promote the
continued growth of the software industry through
its public policy, education and enforcement
programs in the United States and more than 50
other countries throughout North America, Europe,
Asia and Latin America. BSA members are actively
involved in nearly all aspects of microcomputer
software development, including, for example, the
production of operating systems, application
programs, and networking software.  Current BSA
members participating in this statement include:
Aldus Corporation, Apple Computer, Inc., Autodesk,
Inc., Intergraph Corporation, Lotus Development
Corporation, Microsoft Corporation, Novell, Inc.,
and WordPerfect Corporation.
II.	The Software Industry's Contribution to the
U.S. Economy
In the last five years, every governmental,
academic and industry study of technologies that
are key to America's future has identified the
vital role to be played by the software industry.
Software is characterized by both rapid
technological innovation and widespread use in
downstream markets.  Software innovation improves
the competitiveness of other industries which
utilize software products to make themselves more
innovate and
competitive.  The benefits of continuous software
innovation permeate much of the american economy.
In march of last year, the BSA released a study
prepared by Economists, Inc. entitled The U.S.
Software Industry:  Economic Contribution in the
U.S. and World Markets.9  Based on government and
industry information the study reviewed the
economic contribution made to the American economy
by the U.S. "core" software industry:  prepackaged
software; custom computer programming services;
and computer integrated design.
The Economists, Inc. study found that the "core"
software industry:
(1) 	Is the fastest growing industry in the United
States;
(2)	Is now larger than all but five manufacturing
industries;
(3)	Is contributing to the economy of virtually
every state in the nation; and
(4)	Is achieving tremendous success in the
international marketplace.
Notwithstanding this impressive record, the
software industry's role in the growth of the
nation's economy will be even more critical in the
future as new and more advanced technologies
continued to evolve.
III.	Views of the BSA
The BSA has several views on the subject of the
hearings:
	Strong intellectual property protection is
essential to the continued health and growth of
the software industry.  Software is difficult and
expensive to create yet easy and inexpensive to
duplicate or steal.  Moreover, the real value of
software, and the principal assets of software
companies, are not tangible factories or raw
material inventories.  Apart from employees,
buildings and computer equipment, the assets of
software companies are intellectual property, the
technology embodied in the computer programs that
are their products.
	The BSA does not believe that a new form of
protection for software-related inventions is
necessary or desirable.
	There is, however, an urgent need to improve
the operation of the United States patent system
as it pertains to software-related inventions.
Patents continued to be issued which do not appear
to meet the statutory mandates of novelty and non-
obviousness, and these patents impose a
substantial cost on the software industry and on
society as a whole.  Those aspects of the patent
system that permit long gestation periods for
patents also cause economic costs to society
without providing commensurate benefits.
Members of the BSA have widely divergent views as
to the value of patents being granted on software-
related inventions.  However, all members
recognize that the current patent system does not
adequately deal with such patents.  Therefore,
these comments, which are the minimum common
points agreed upon by the participating BSA
members, primarily suggest procedural changes to
the operation of the patent system, to improve its
effectiveness regarding the protection of
software-related inventions.
IV.	Discussion
The BSA respectfully suggests that the following
changes would improve the effectiveness of the
patent system:
	The patent term should run for a fixed time
from the filing date.
	The examination process should be improved:
	as to the content of the prior art database,
	as to the accessibility of that prior art
database to the examiners, and
	as to the training and treatment of the
examiners.
	Applicants should be encouraged to conduct a
patentability search before filing and to present
the prior art located in the search to the PTO
before the application is examined.
	An opposition procedure should be
established, with provisions that ensure expedited
results.
	Reexamination proceedings should be
strengthened procedurally and expanded
substantively to include non-prior art validity
issues.
I would like briefly to explain why the BSA
believes each of these changes would improve the
system.
A.	Term Change
An important problem with the patent system is the
issuance of patents after inordinately long
application periods, brought about by continuation
and continuation-in-part applications and,
occasionally, interference proceedings.  Whatever
the cause, the result is the sudden appearance of
a patent years after the technology to which it
relates has been developed and commercialized.  At
that point, design-around possibilities may no
longer be feasible and the patent consequently can
assume an enormously enhanced power to disrupt
long-established expectations, for a full 17 year
term from the issue date.  The BSA supports the
Commissioner's intention to establish a fixed term
from the original filing date, as that would give
the patent owner a strong incentive to have her
patent issue promptly, and would in any case
reduce the likelihood of the "stealth" patent that
suddenly appears after having lain hidden in the
PTO for 15 or more years.  Furthermore, the spur
to an applicant to timely present all claims and
applications stemming from a single disclosure
would promote additional efficiencies in the
examination process.  The BSA is gratified to
learn that the PTO will support legislation
embodying this concept.
B.	Strengthened Examination
Most of the prior art regularly available to PTO
examiners comprises collections of patents and
publications.  However, especially in the field of
software-related patents, much of the relevant
prior art exists not as patents or publications,
but rather as companies' internal technical
manuals, reference works, bulletins and other
similar documents.  Thus, often the most relevant
prior art is not readily available to examiners of
software-related applications. Groups such as the
Software Patent Institute have undertaken to
compile databases with these types of software-
related prior art.  It is important, especially in
this area, that the PTO expand the universe of
prior art on which it typically relies, and
improve its access to the universe.  The BSA
hereby offers to provide ongoing assistance in
establishing and providing content for suitable
databases as well as examiner training and
software tools for searches in those databases.
C.	Pre-Examination Search
Because of the quantity of prior art relating to
software-related inventions, as well as the
diversity of the nature and location of such prior
art, the BSA urges that an applicant should be
encouraged to conduct a reasonable prior art
search, and to present the results of the search
to the PTO within a short time after filing the
application.
D.	Publication of Applications for Opposition
A third party may often be aware of prior art not
readily accessible to the PTO and may also be the
entity with the greatest interest in preventing
the issuance of a patent
covering what is in the prior art.  The BSA
believes that providing an opportunity for
submissions during prosecution (as is done in the
EPO after publication of the application and EPO
search report) would facilitate a more complete
view by the examiner of the relevant prior art.
In addition, once claims are allowed, an
opposition period of sufficient duration to permit
reasoned investigations pertaining to those claims
would provide the public with a timely and
efficient opportunity to submit relevant
information pertaining to claims as they are
expected to be issued.  (Our position is premised
on the assumptions that: 1)the fact that the
period for filing an opposition to a patent
expires, without any opposition actually being
filed, would not in any way affect the presumption
of validity of an issued patent;  2)any
opposition activity or proceeding would take place
in an expedited manner, so that the opposition
process cannot be used, as it is in some
countries, including Japan, to unduly delay the
issuance of the patent, to the disadvantage of the
patent owner; and 3) any opposition activity or
proceedings would include appropriate procedural
safeguards to limit potential abuses of the
process.)
E.	Expanded Reexamination
The current reexamination process is generally not
viewed as a viable option by opponents to a patent
due to the largely ex parte nature of the process.
The BSA urges that reexamination be modified to
provide more of an inter partes proceeding,
allowing opponents to a patent to feel more
comfortable in relying on this procedure to
efficiently resolve their concerns in what may be
the most efficient forum.
Further, the scope of reexamination proceedings
should be expanded to additionally cover all prior
art categories, as well as non-prior art validity
and enforceability issues, for example,
inequitable conduct regarding an applicant's non-
disclosure of material prior art during
prosecution of an application.10  BSA acknowledges
and supports the Patent Office's intent to forward
legislation to Congress making reexamination a
more attractive vehicle for challenging a patent's
validity.
We appreciate having the opportunity to present
these remarks.
[Intellectual Property Section, California
State Bar]
PRESENTATION AT PUBLIC HEARINGS ON THE
PATENT OFFICE
27 January  1994
San Jose, California
The Honorable Commissioner Lehman and Mr. Kushan,
my name is Mary O'Hare. I am the chair of the
Executive Committee of the Intellectual Property
Section of the State Bar of California. The
Section is voluntary, comprised of more than 3700
attorneys practicing in the intellectual property
fields of copyrights, trademarks, trade secrets,
and patents. Our members are from large and small
firms, corporations and nonprofit organizations,
representing, for the context of this hearing,
individuals, those nonprofit organizations, small
businesses, and large corporations.
We are proud that our organization was one of the
first to have Commissioner Lehman as its keynote
speaker this past fall and we thank the
Commissioner and the Patent Office for holding
these hearings in California.
All too often in the past, California and the
needs of California attorneys and their clients--
more than twenty-six hundred miles and three time
zones away from the Patent Office--have been felt
to be out of sight and out of mind. Nonetheless,
California has been the center of the United
States' cultural and technical renaissance of the
late twentieth century--a renaissance that,
perhaps now more than ever, is a key to
Californias vitality. California's two largest
Industries-entertainment and technology--are also
the United States' two largest export engines.
We of the Intellectual Property Section hope that
these hearings signal the Patent Office's
willingness to have easy and open access to the
Patent Office for California practitioners--a
privilege until recently primarily enjoyed by the
Washington, D. C. patent bar.
While I am chair of the Intellectual Property
Section, my intellectual property expertise has
been gained in the context of a motion picture
entertainment practice. Honorable Mr.
Commissioner, the tragic earthquake in Southern
California may have rattled our homes, our
offices, and our psyche, but let me assure you
that Californians are not so rattled as to ignore
the importance of your presence here -- or to
presume to have a motion picture attorney address
you on matters concerning the Patent Office.
It therefore pleases me to introduce Michael
Glenn, an officer of the Executive Committee of
the Section and a patent attorney in the Silicon
Valley who has represented both individual
inventors and large corporations before the Patent
Office, especially with regard to complex
electronic inventions, including semiconductor,
computer and software inventions for the past 14
years. Mr. Glenn recently published an analysis of
the current state of the patent law regarding
software inventions, "Software, Patents, Allapat
and All That", in the Sections publication, NEW
MATTER. Mr. Glenn will present the statement of
the Section.
*   *  *  *  *  *
Todays Hearings have been convened to receive
comments from the public on patent protection for
software inventions.  Rather than respond to the
specific questions raised in the Notice of these
Hearings, we will address the important, broader
issues that form the context in which the issue of
patent protection for software inventions arises.
These issues include: 1) the expertise and ability
of the Examining Corps, especially with regard to
the difficult task of applying complex legal
principles to emerging and sophisticated
technologies; 2) the availability of task
appropriate tools and resources to the Examining
Corps; 3) the need to make Patent Office services
and resources readily available to the public; and
4) the understanding that the U.S. Constitution,
in providing the Congress with the power to
promote the progress of science and useful arts by
securing for limited time to authors and inventors
the exclusive right to their respective writings
and discoveries, did not limit the types of
discoveries for which a grant of exclusive rights
would be secured.
Preliminarily it must be observed that patent
myths abound, and the Patent Office should use its
best efforts to dispel these myths. These Hearings
are one excellent way to raise the general level
of public understanding of the U.S. patent system.
However, the primary job of the Patent Office is
to examine patent applications.  A quality
examination and precise application of the patent
laws by the Patent Office are necessary  to assure
that the interests of both the public and the
inventor are properly served.
First, while recent efforts to improve the quality
of Patent Office services, especially the quality
of the Examining Corps and, as a result, the
quality of patent examination and of patents
issued by the Patent Office have not gone
unnoticed, more needs to be done.  Because the
process of examining a patent application
necessarily demands both a high level of technical
expertise and a thorough understanding of the
legal standards that are applied during the
examination, the Patent Office must continue to
attract and retain Examiners who not only have the
technical knowledge necessary to understand the
invention, but who also understand the legal
framework within which the Patent Office
functions.  To this end, ability and merit should
be the most important standards by which Examiners
are hired, promoted, and retained.
Secondly,we encourage the Patent Office to do more
with regard to improving the quality of the patent
examination process.   For example, in many
technical areas, a search of issued United States
patents alone cannot reveal the most relevant
prior art.  In rapidly developing technologies,
such as computer software and biotechnology, where
the enforceability and availability of
intellectual property rights in the past have been
uncertain, the most relevant art may be found in
industry journals, and in proceedings of
professional societies and institutes.  The
Examining Corps should be encouraged to search all
relevant information sources. Intensive training
in using these information sources should be
provided to the Examining Corps, such that the
most relevant prior art is applied by the
Examiners to every patent application filed with
the Patent Office.
Thirdly, since the Patent Office is also a
tremendous depository of knowledge, we encourage
the Patent Office to explore the possibility of
giving the public throughout the United States
free or inexpensive access to the Patent Office
database through an on-line source, such as the
Internet.  At present, the few public patent
depositories scattered across the U.S. are
underfunded, understaffed, and resource
constrained.  For example, on-line searching is
not available at the Sunnyvale patent depository
here in Silicon Valley; and those wishing to
perform a computerized search of the now available
CD-ROM database there are limited to only twenty
minutes of use.  The Patent Office search room in
Washington, D.C. is not accessible for the public
at large, attorneys, and inventors who live, work,
and invent in California. Ready public access to
such publicly owned information would allow
inventors to make informed decisions about whether
or not they should pursue patent protection, would
allow those seeking to enter a new market to
review the patent literature before entering upon
a course of action that could lead to a wasteful,
potentially disastrous patent infringement law
suit, and would allow those seeking to license
technology to have access to the marketplace of
ideas contained in the Patent Office database and
be better able to establish a fair value for such
technology.  As important, the public would become
more familiar with, and better educated concerning
the patent system.
Fourth, from time to time an issue may arise when
a recently issued patent is publicized as part of
a marketing campaign by a successful patent
applicant, or as part of an ideological debate
concerning the applicability of the patent laws to
the technology protected or the breadth of
coverage afforded the invention by the patents
claims.  As a result, a discussion ensues
concerning the wisdom of extending patent
protection to new and emerging technologies.  We
caution the Patent Office not to allow the mere
existence of public debate alone to provide a
rationale for establishing separate rules for such
technologies.
This discussion is not new.  In the days of the
Wright brothers there was the fear that the future
development of aviation would be seriously impeded
if Wilbur and Orville should be allowed a basic
patent on their invention.  As we all know, this
was not the case.  As Wilbur Wright put it,
[w]hen a couple of flying machine inventors fish,
metaphorically speaking, in waters where hundreds
had previously fished...and spending years of time
and thousands of dollars, finally succeed in
making a catch, there are people who think it a
pity that the courts should give orders that the
rights of the inventors shall be respected and
that those who wish to enjoy the feast shall
contribute something to pay the fishers.
With regard to enforceability of patent rights for
new and emerging technologies, the Patent Office
must show leadership.  The statutory mandate of
the Patent Office is clear - novel and unobvious
inventions that comprise patentable subject matter
must be granted a patent.  As a general principle,
patentable subject matter cannot be limited to
known technologies, but, as stated by the Supreme
Court in the Chakrabarty case, must also encompass
anything under the sun that is made by man.
Otherwise, only old technologies will be found to
comprise patentable subject matter, at which point
the patent system will lose all meaning.  It is
the ownership of inventions that spurs innovation,
not just in the promise of exclusivity afforded by
a patent grant, but more significantly in the
incentive to avoid a patent by inventing around
the patented invention.
Finally, while the patentability of software
inventions has long been an interesting topic of
discussion, first in the courts and the Patent
Office, and now in the press, much of the
discussion may be caused by misunderstanding and
confusion.  We suggest that some of the
misunderstanding stems from the confidential
nature of the examination process.  In many areas
it is not possible to perform an infringement
search to clear a new product because the most
relevant patents are still pending in the Patent
Office, and not available to the public. The
Patent Office could explore opportunities for
involving the public in the examination process to
avoid any surprise attendant with the grant
ofbroad reaching patents.  For example, the Patent
Office may want to consider the pre-grant
publication of patent applications and/or pre-
grant public opposition proceedings.
We applaud the Patent Office decision to reexamine
a recently issued patent on its own initiative in
light of new art discovered after issuance of the
patent.  As an organization we have no opinion
regarding the outcome of the reexamination.  We
only applaud this bold and welcome policy on the
part of the Patent Office to pursue excellence.
The ultimate outcome of such actions will be to
improve the stature and regard with which a United
States patent is held.  This, in turn, will
provide more certainty concerning the validity of
an issued patent.  Reducing the likelihood of a
successful attack on the validity of a patent
should encourage early settlements of patent
disputes and strengthen American industry by
strengthening the incentive to innovate, rather
than to litigate.
In closing, the Patent Office must continue to
serve the needs of a broad range of applicants,
from independent inventors to multinational
corporations, while taking into account the
effects of a fast changing global economy.
Patents not only protect inventions, but they also
protect employment and national wealth.  The
United States is a technology leader because of
the incentives it provides to those persons who
take the effort and risk involved in bringing new
inventions to the marketplace.   Of all the
nations of the world, the United States has the
only significant software industry, the only
significant biotech industry, and  the only
significant microprocessor industry, to name a
few.  These industries form a mighty technology
river that has human creative energy as its
source.  The American experience shows us  that
industry requires this creative energy to thrive
and that such creative energy requires incentive.
The role of the Patent Office is paramount because
the Patent Office is charged by law with providing
incentives for this creative energy by protecting
patentable inventions.
We pledge that if you involve Californias
inventors and pracitioners in the on-going
discussion of Patent Offfice procedure and policy
your job will be easier and, we can together
insure that the patent system and the Patent
Office fulfills the Constitutional proviso of
promoting the progress of science and the useful
arts, all to the economic benefit  of the citizens
of California and the rest of the United States.
Thank you.
Statement of Dr. Richard LeFaivre
on Behalf of the Computer and Business
Equipment Manufacturing Association
and Apple Computer, Inc.
Hearing on Patent Protection for Software Related
Inventions
January 26, 1994
San Jose, California
Good morning.  My name is Dr. Richard LeFaivre
from Apple Computer.
I am here today wearing four hats:
First, as a computer scientist with 25 years of
experience in software technology as a researcher,
professor, and R&D Director.
Second, as Vice President of Advanced Technology
at Apple Computer.  My organization is responsible
for a large percentage of the patents granted to
Apple, and the protection of the innovation we do
is very important to me.  In particular, we have
seen a marked shift in our innovation focus from
hardware to software over the years, so I am very
interested in the topic of these hearings.
Third, I am a founding member of the Executive
Committee of the Software Patent Institute.  As
you may be aware, the SPI was founded to provide
training in software technology and access to
prior art, to help ensure that those software
patents that are issued are of high quality.  I
should point out that the Software Patent
Institute has chosen to take a neutral stance on
the broad issue of the patentability of software,
and that the views I am about to express do not
necessarily reflect the views of the SPI.
Finally, and most importantly, I will be
testifying today on behalf of the Computer and
Business Equipment Manufacturers Association
(CBEMA).
Interest of CBEMA
CBEMA is a trade association whose members
represent the leading edge of high technology
companies in the computer, business equipment and
telecommunications industries in the U.S.  In
1992, CBEMA's 26 members had combined estimated
sales of more than $270 billion dollars,
representing about 4 1/2% of the U.S. gross
national product.  CBEMA member companies employed
approximately one million workers in the U.S. last
year.
The computer industry performs approximately 20%
of the total private sector R&D investment in the
U.S.  That figure is five times the investment of
the aerospace industry, three times the investment
of the health care industry, and four times that
of the chemical industry.  This investment allows
our members to rapidly advance the capabilities of
their products, and to gain access to, and compete
successfully in, a tough international
marketplace.  It also results in significant
numbers of jobs just within the R&D function.
I am here today because patent protection for new
computer functions is crucial to all of our
members.  Software-related inventions fit within
our present patent system, and patents issued
under a sound application examination process
support the Constitutional mandate of promoting
the useful arts and sciences.
CBEMA members file for, and obtain patents for,
software-related inventions; they also enter into
agreements to utilize such patents held by others.
Because our companies typically have broad product
lines, they address patent issues in many areas of
technology.  They see no reason to treat software-
related patents differently from patents related
to other technologies.
Question 1:  Format and Claim Drafting Should not
Determine Patentability of Software-Related
Inventions
In the first question set forth in the hearing
notice there are a number of subparts relating to
claim subject matter and claim formats.
CBEMA'S response to this question is simply that
if the claim is drawn to the solution of a real-
world commercial problem, and the claimed
functional steps or elements, as a whole, meet the
strict legal requirement to be new, non-obvious
and useful, then a patent should issue.  The
function claimed, not the format, is important.
It should not matter whether new, non-obvious and
useful process steps are claimed in the context of
a program or a disk, or claimed in a hardware or
method format, or in the context of a
semiconductor chip.  Software-related inventions
are valuable to the purchaser, not for what they
communicate, but for the functions they perform.
The functions are what are important and what
should be assessed for novelty and non-
obviousness.
Question 2:  Software-related Patents Have Had an
Overall Positive Impact
Relative to question two, our members have
integrated their software-related patents into
their overall patent portfolios and practices, so
that separating out their impact is difficult.
However, this integration itself demonstrates that
these patents are just like all others.  They are
sought when the inventor or his or her employer
believe that the investment in obtaining the
patent will be returned.  Conversely, CBEMA
members often must respect the software-related
patents of others, which they do in the same
manner as for other technologies.
Question 3:  The Standards for Software-Related
Inventions Should be The Same as Those for Other
Technologies
Regarding question three, the standard for patent
eligibility for software-related inventions should
be maintained at the same level as for all other
technologies.  An alteration in that standard
would negatively impact investment in our
industry.  If the standard were to be restricted
severely, it would disarm CBEMA member companies
in their dealings with foreign competitors because
licenses under U.S. patents are used to negotiate
access to foreign markets and foreign technology.
Obtaining patents for software-related inventions
in our principle competitor countries is generally
equivalent to that in the United States.
Software-related technology will be one of the
leading technologies of the 21st century.
Discrimination against this technology would set a
terrible example sure to be rapidly adopted by the
developing world.  To now have the leading country
in software creation and patents declare that such
inventions are excluded from the statute, despite
falling within the terms of statutory subject
matter, or are to be treated differently from
patents involving other technologies, would
reverse much of the hard fought progress that has
been made over the last decade in improving
intellectual property protection throughout the
world.
Question 4:  The Combination of Patent, Copyright,
and Trade Secret Laws Are Needed To Provide the
Appropriate Level of Protection for Software
Technology
Relative to question four, patents provide the
relatively broad protection necessary to bring in
risk capital for new and useful inventive
functions that are generally defined in terms of
processes or methods of operation.  This
protection should be afforded only after a
detailed examination to ensure that the claimed
functions are truly novel and non-obvious.
In contrast, copyright protects only the
expression contained in the computer program, as
it does for other literary works.  High level
functional processes are expressly excluded from
protection by statute.
Trade secret laws provide the necessary protection
to facilitate the disclosure of confidential
software-related designs to employees, joint
venture partners and others within a structure
supporting that confidentiality.
Thus, each protects different aspects of the
intellectual property.  The inventor, who may not
wish or be able to author a complete software
product, deserves protection.  The author of a
program deserves protection from piracy and
plagiarism.  Those with valuable confidential
information, willing and able to keep it
confidential should be able to protect that value
against those with which it has a fiduciary
relationship.
Question 5:  Creation of a Sui Generis Regime of
Protection to Replace the Current Patent and
Copyright Regimes Would be a Legal and Economic
Disaster
Finally, with regard to question 5, CBEMA supports
continued reliance on the tested, well-developed
protection of patents, copyrights and trade
secrets.  We strongly support continued
improvement in the patenting process for software-
related inventions.  Nothing suggests the need to
treat software differently.
A new and untested regime would fail to provide
inventors and authors with any certainty of
protection for an extended period of time while
judicial precedent was developed to determine the
scope of the law.
Additionally, international protection for our
software research and development is critical.
There is no certainty that a new protection system
could be implemented worldwide, whether through
multilateral or bilateral negotiations.  The hard-
fought protections in the GATT/TRIPs and NAFTA
Treaties regarding literary work protection for
programs and the issuance of patents without
discrimination based on technology were just
obtained last year.  It is inconceivable that such
protections would now be abrogated with the ink
hardly dry on those provisions by the adoption of
sui generis protection.
Treat Software-Related Inventions Like other
Inventions
In closing, our message to you is this:  Don't cut
back on patent protection for software-related
inventions because some invalid patents may have
been issued.  The current re-examination process
and the Federal court system provide mechanisms
for the removal of these mistakes.  We believe
that further training for Examiners, and access to
a larger library of prior art can and will reduce
the possibility of future mistakes.  Overall, the
system is working -- and should be improved, not
abandoned.  If the standard for patentability is
changed for software-related inventions, or if
patent protection is dropped in favor of some new
form of protection, it will severely and
negatively impact CBEMA members, our industry, and
the country.
Thank you for permitting us to submit these
remarks and for your consideration of them.  We
look forward to working with you to improve the
United States Patent system in the future.
Computer and Business Equipment
Manufacturing Association  Member Companies
3M
AMP Incorporated
Apple Computer, Inc.
AT&T
Bell & Howell
Bull HN Information Systems, Inc.
Compaq Computer Corporation
Dictaphone Corporation
Digital Equipment Corporation
Eastman Kodak Company
Fujitsu America, Inc.
Hewlett-Packard Company
Hitachi Computer Products (America), Inc.
Honeywell Keyboard Division
IBM Corporation
Information Handling Services
Lexmark International, Inc.
Mitsubishi Electric America, Inc.
Multigraphics, A Division of AM International,
Inc.
NCR Corporation
Panasonic Communications and Systems Company
Smith Corona Corporation
Sony Corporation of America
Tandem Computers Incorporated
Tektronix, Inc.
Xerox Corporation
Biography
Dr. Richard LeFaivre
Vice President, Advanced Technology Group, Apple
Computer, Inc.
Rick LeFaivre is Vice President of the Advanced
Technology Group of Apple Computer, Inc.  He is
responsible for Apples future technology
directions in such areas as advanced systems
(system software, hardware architectures,
information architectures, media architectures),
communication technologies (wireless, broadband,
ubiquitous computing, interactive TV),  user
interaction technologies (speech, pen, graphics,
imaging, video), and user solutions (intelligent
systems, authoring tools, learning environments).
He also oversees Apples Corporate Library,
External Research portfolio, and the Apple
research centers in Paris and Singapore.  He
joined Apple in March of 1991.
Previously, Dr. LeFaivre was Director of Windows
and Graphics Systems at Sun Microsystems,
responsible for both technology and product
development of Suns windowing and graphics
subsystems.  Prior to joining Sun in 1989, he
spent eleven years at Tektronix, Inc. as Director
of computing and visual systems research in Teks
central research labs, and from 1974 to 1978 he
was a professor in the Computer Science Department
at Rutgers, the State University of New Jersey.
Dr. LeFaivre received his B.A. in mathematics from
the University of Missouri-Columbia, and his M.S.
and Ph.D. in computer science from the University
of Wisconsin-Madison.
TESTIMONY OF JAMES A CHIDDIX
BEFORE THE PATENT & TRADEMARK OFFICE
HEARINGS ON PATENT PROTECTION FOR
SOFTWARE RELATED INVENTIONS
January 26, 1994
Let's start at the beginning.  The Constitution
says that patents are to be granted in order "To
promote the Progress of Science and useful Arts".
Time Warner Cable, for which I am Senior Vice
President, Engineering and Technology, is the
second-largest cable operator in the United
States, serving more than 7million subscribers in
36 states. Two years ago, we built the first 150-
channel cable system in Queens, New York, which
remains the most advanced cable system in the
world today. Currently we are building the
country's first electronic superhighway, what we
call the "Full Service Network", in Orlando,
Florida, which will offer a host of two-way
interactive services, including video on demand,
interactive shopping and distance learning.  Time
Warner Cable plans to spend more than $5 billion
over the next five years to deploy Full Service
Networks in the majority of our service areas
across the country.  The Administration and
members of Congress have indicated that building
such networks is a national priority.
In our experience, however, the current patent
system is, to some extent, working against the
development of an advanced communications
infrastructure.  Ever since we announced our Full
Service Network plans, we and our suppliers have
received a number of inquiries from individuals
and companies who purport to have patent rights
that cover basic, but to us, obvious, elements of
the information superhighway as well as of
traditional cable systems.  I would like to
describe for you two of these patents.  The point
is not whether these patents are valid or invalid,
or whether any particular use is infringing or
non-infringing--although we firmly believe that
nothing we are doing infringes any valid patent.
The point is that, either way, while none of these
patents stand as a significant impediment to our
deployment of Full Service Networks, they do serve
to illustrate that the current patent system is
out of balance and that, rather than promoting the
progress of science and useful arts, that system
is, in many ways, stifling such progress.
The Cutler Patent (U.S. Patent4,135,202)
The Cutler patent purports to cover many uses of
optical fiber to transmit television signals to
receivers in the home.  This patent was granted in
1979 and will expire in 1996. The use of fiber, of
course, is basic to the electronic superhighway
and has also been used for many years in
traditional cable systems.  Indeed, Time Warner
Cable has been a pioneer in the deployment of
optical fiber in cable systems.
The "inventor" of the Cutler patent did not invent
optical fiber.  Rather, he merely filed a patent
for using fiber to transport video signals to the
home.  The patent statute says that patents are
not to be granted if "the subject matter as a
whole would have been obvious at the time the
invention was made to a person having ordinary
skill in the art to which such subject matter
pertains" (35U.S.C.ʤ 103).  I am not a lawyer,
but it seems to me that the idea of using optical
fiber to transport video signals to television
sets is not only obvious, but also inherent in the
fiber optic medium itself.  If such a patent were
valid, I would think it would also have been
possible to obtain patents after the invention of
television for using that medium to transmit
drama, sports or news programming. These, however,
are merely self-evident uses that are inherent in
the medium of television--just like video
transport is inherent in the medium of optical
fiber.
The StarSight Patents and Patent Application
(U.S.Patent 4,706,121, PCT Patent Application
No.92/04801)
The StarSight patents purport to cover a wide
variety of features used in connection with
Electronic Program Guides ("EPGs"). EPGs are on-
screen guides that provide program listings for
channels that are broadcast or provided by a cable
system. They do not directly involve Full Service
Networks, but, rather, are used to provide
schedules for traditional, analog channels.
StarSight has a number of patents, but the
features I discuss here are purportedly covered by
a patent granted in 1987 and another that is
currently pending before the patent office.
Pursuant to this patent and application, StarSight
apparently claims or seeks protection for the
following EPG features;
--	The ability to move a cursor of
automatically- varying size about on an on-screen
program guide to highlight a particular program on
the schedule and then to press a button on a
remote control device to tune to the channel on
which that program is being transmitted.
--	The ability to combine two or more criteria
such as "sports" and "football" to obtain a
listing of the times and channels on which
programs fitting those criteria will be telecast.
Again, to me, these features seem obvious and
inherent in the technology that provides them.
Daily newspapers have long provided channel
listings, often using a grid format that shows
what programs are on what channel at what time.
In addition, individual broadcast channels and
cable systems have long telecast on-screen
programming schedules.  When a television viewer
uses such a schedule, she or he finds a program of
interest, identifies the channel, and punches the
number into the remote.  The StarSight system
merely does this tuning process automatically
through a straightforward transfer of the process
to a computer.  Similarly, when I want to watch
football games on television, I simply scan the
program schedule for such programs. It would be a
simple, but somewhat time-consuming task, to write
out a list of such programs.  But again, preparing
lists from data based on multiple criteria is a
simple, straightforward and obvious computer
application.
Under existing law, patents for what I have just
described may be valid or invalid.  As I said at
the beginning of my remarks, however, in either
case such patents present impediments to progress.
If such patents are found to be valid, surely the
patent system has gone too far in providing
protection for what would seem obvious to a lay
person, let alone to "a person having ordinary
skill in the art".  The result of awarding such
patents at best results in added costs for no
added value--if a license is obtained--and at
worst, prevents consumers from fully realizing the
benefits of the technology--if a license cannot be
obtained at an affordable price.
If such patents would ultimately be found to be
invalid, however, the patent system would still
not be working properly.  Some of the StarSight
patents are currently being challenged in court.
Business, however, cannot come to a halt in the
meantime.  Also, litigation is costly, slow and
never free from risk.  Rather than expend time and
money on litigation, many prudent business people
will choose to avoid the problem. Indeed, one of
our suppliers of set-top boxes has informed us
that, rather than challenge the StarSight patents,
they will instead "de-feature" the boxes they are
making for one of our cable systems, removing the
ability of those boxes to provide some of the
features that StarSight claims are covered by its
patents.  This is not an uncommon or irrational
decision.  This supplier will be spending many
millions of dollars to manufacture these new
boxes.  Even though they believe the StarSight
patents are not valid, it is simply not worth the
risk and the cost of fighting them in court.
Of course, our supplier could always attempt to
obtain a license for these features.  But again,
this would result in added cost for what in our
view provides no real value.
So, in our view, the present system of patent
protection is not optimally promoting innovation
in the field of software-related inventions.
Rather, the current system is in some important
instances stifling innovation, increasing costs
and leading to "de-featuring" rather than
fostering the development of new and better
products and services.
However, it is not the framework of the system
that is the problem.  The statutory test of
obviousness--and the person-of-ordinary-skill
standard--in themselves strike the proper balance.
What is needed then is not a new framework for
patent protection for software-related inventions
but a more rigorous application of the present
standards.  For one thing, obviousness should
include routine applications of a given
technology, regardless of whether there is prior
art showing that particular application.  For
another, any "invention" that merely transfers a
series of routine tasks to a computer should also
be viewed as obvious.
As your notice for these hearings states, "the
computer software industry has evolved into a
critical component of the U.S. economy."  Indeed,
the importance of this component is growing
greatly every day as the computer, cable and
telephone industries continue to converge.  If the
United States is going to continue to be at the
forefront of these crucial industries, it is
imperative that the patent system be restored to
its proper balance, so that it can properly
foster, rather than frustrate, innovation.
TESTIMONY OF  D. JOSEPH CLARK, PH.D.
CHAIRMAN & CEO
VIDEODISCOVERY, INC.
PATENT & TRADEMARK OFFICE PUBLIC HEARING
SAN JOSE, CALIFORNIA
JANUARY 26, 1994
INTRODUCTION
Good morning.  My name is Joe Clark and I am the
Founder, the Chairman and CEO of Videodiscovery in
Seattle, Washington.  Videodiscovery is a small
but well-known publisher of multimedia products
for science education K-college.  I started
Videodiscovery in my basement in 1983 with very
little money and business experience.  The company
has grown to over 60 people in the course of 10
years in spite of original obstacles.
Thank you for offering me the opportunity to share
with you some of my thoughts regarding the patent
process and ways in which it could be improved.
First, I would like to provide a little background
information.
My doctorate is in microbiology and my research
experience of nearly 20 years is in the field of
molecular genetics.  I was a faculty member at the
University of Washington in Seattle for 12 years
prior to starting Videodiscovery.  In 1981 I
received a grant from the Department of Education
to produce a videodisc for biology education.  I
became interested in videodisc technology in 1978
and feel that I helped pioneer the multimedia
industry.  My focus has always been on education.
PATENT CASE HISTORY
I started to learn about the US Patent system on
January 23, 1993 when I received a letter from
Optical Data Corporation calling attention to the
award of two patents.
This letter not only directed our attention to the
awarding of two patents, but also stated that as a
publisher with videodisc products in our
curriculum programs, Videodiscovery probably may
be infringing on these patents.
Seven other publishers of multimedia products in
education received similar letters, including
Scholastic, Inc.,  Encyclopaedia Britannica, Scott
Foresman, Prentice Hall, Decision Development
Corporation, South-Western Publishing, and Holt,
Rinehart, Winston.  I can assure you that among
this group there was uniform disbelief and anger
that the U.S. Patent & Trademark Office (PTO)
would have the audacity to provide anyone with a
patent on what I would call the "Socratic Method."
1.	The first patent, Number 5,120,230, was
issued on June 9, 1992.  Entitled "Interactive
Method for the Effective Conveyance of Information
in the Form of Visual Images," this patent covers
an instructional methodology that involves an
interactive trilogue between the teacher, class,
and video display device.
2.	The second patent, Number 5,173,051, was
issued on December 22, 1992. Entitled "Curriculum
Planning and Publishing Method," this patent
covers a lesson creation methodology to use
software to develop customized curricula.
In defense of the PTO, the first patent, (Number
5,120,230) was rejected twice because of the
obviousness of the invention, but persistence on
the part of the applicant paid off and the patent
was finally awarded in June of 1992.
At that time in early 1993, I was in contact with
all of the parties who had received the letter
from the patent holder.   I found a consensus that
the patents were invalid on the basis of prior art
and the obviousness of the claims, and that the
patents would have a negative impact on the
development of the electronic publishing industry.
Through this process, I started to find out more
about the patent process and the options available
to Videodiscovery to get the two patents
invalidated.  As a small company, Videodiscovery
initially felt it was unable to challenge the
validity of the patents.  I was advised by my
attorney that litigation would cost a minimum of
$200,000 and possibly up to $300,000.  Since the
patent holder was a direct competitor, and we had
been put on notice, I felt we had no choice but to
address the problem.
On August 12, 1993, Videodiscovery filed a
complaint against the patent holder in Federal
Court requesting a declaratory judgment finding
the two patents invalid based on the obviousness
of the patents and the existence of numerous
examples of prior art.
On October 28, 1993, the last day their answer to
our complaint was due in court, they elected to
dedicate one of the patents, No. 5,120,230, on a
"Method of Instruction," to the public domain.  In
a surprise move, they also asked that the PTO re-
examine the second patent.  Currently, the case is
pending.
VIDEODISCOVERY'S EXPERIENCE ILLUSTRATES PROBLEMS
WITH PROCESS
Let me read the abstract to you and describe in a
few words Patent No. 55,120,230:
"Interactive Method for the
Effective Conveyance of Information
in the Form of Visual Images"
An interactive method of effectively and
efficiently conveying information which makes use
of videodisc technology, along with associated
printed material.  Video images are stored on a
videodisc, which images can be randomly accessed
for display.  The choice of which video images are
displayed, or repeated, can be in response to the
requests, or needs, of the recipient of the
information.
EXPANSION OF PATENTS IN MULTIMEDIA INDUSTRY
When the first rumblings started with the
announcement of Patent Numbers 5,120,230 and
5,173,051 in January of 1993, I cautioned my
colleagues that this was just a warning of what
was forthcoming from the PTO and that we should
work very hard to get the patent process altered.
The announcement by Compton's of their patent
eight months later confirmed my worst fears.
A wrong has been perpetrated by the issuance of
the following patents in the last two years which
affect the multimedia industry:
1.	Patent No. 5,120,230:  "Interactive method
for the effective conveyance of information in the
form of visual images," awarded to Optical Data
Corporation;
2.	Patent No. 5,173,051:  "Curriculum Planning
and Publishing Method," awarded to Optical Data
Corporation;
3.	Patent No. 5,241,671:  "Multimedia search
system using a plurality of entry path means which
indicate interrelatedness of information," awarded
to Compton's NewMedia; and,
4.	Patent No. 5,012,334:  "Video image bank for
storing and retrieving video image sequences,"
awarded to Dubner Computer Systems, Inc.
The process of awarding patents is very similar to
the phenomenon of earthquakes.  When the Dubner
patent was issued, there was little notice; it was
akin to about a 1.5 on the Richter Scale.  Patents
'230 and '051 on the "Socratic Method," using a
computer to implement that which has been routine
in publishing for years and correlating films and
text to instructional objectives, came in at about
4.3 on the Richter  Scale.  Compton's patent on
multimedia, on the other hand, raised the
rumblings and destruction to approximately 7.4.
This is clearly serious business.
PTO IS NOT AT FAULT
Because the patent process is cloaked in secrecy,
those of us in the industry are expectant and
anxious about the other patents which are in the
pipe line.  It is quite similar to living in an
earthquake zone.  We know that there will be other
earthquakes and after-shocks. One cannot predict
when.  The extent to which this anxiety is based
on physical laws is one thing.  The extent to
which it is based on inadequate and archaic
formulations of man and his culture is another.
Clearly, a system which produces patents, many of
which are found invalid in courts, or cannot be
reasonably challenged, should be changed.  With
actions at the PTO, including these hearings
called by Commissioner Lehman, many of us are
optimistic about significant and appropriate
changes to the system in the future.  If any of
the recently issued patents in multimedia had been
publicly viewed prior to award, I cannot believe
that they would ever have left the patent office.
Industry members recognize that they are not
unique, that the "inventors" were not the first to
invent, that they are too broad to warrant patent
protection, and that they do not promote the
multimedia industry.
It seems that the PTO is a victim and not the
perpetrator of these wrongful acts.  What makes
the system of awarding patents dysfunctional is
the combination of rapid technological advances,
the emergence of new industries, of new industries
based on those advances, and the secret process of
issuing patents.  By definition, emerging
industries are built on a series of new ideas.
WE NEED IMMEDIATE FEDERAL RELIEF
Because patent examiners have little or no
experience in a new, emerging industry, and there
is no prior art, they have no basis to evaluate
the uniqueness of the "invention."  It is
difficult for patent examiners to separate
legitimate from illegitimate inventions.
Publish Prior to Award:  An obvious solution is to
remove the veil of secrecy before the patent is
ultimately awarded.  The collective members of the
industry would readily know if the patent is
obvious, if it is superseded by prior art, and
whether it deserves to be protected by a patent.
The examiner, who is not privy to the history, the
prior art, nor the perspective of what is obvious
from what is unique, has no chance to make an
informed judgment.  In most cases, I can believe
that the examiner has no choice but to issue the
patent.
My understanding is that the GATT Accord will
force the United States to change the method of
issuing patents to a more open process.  We will
be obliged to adopt the system which is common to
all of the other nations in the world but a
handful.  The first-to-file process mandates that
a patent is good for 20 years from the date of
filing and will reduce the risk of "landmine"
patents.  It is essential that with this change,
the law also mandates a reasonable period of
public disclosure of the patent prior to actual
award.  This is generally the case in other
countries.  This simple change will obviate the
problems we are facing in the multimedia industry
where patents are being awarded for processes and
methods which are entirely unwarranted.  These
patents are obvious ideas, they are preceded with
prior art, and they are damaging to the industry
as opposed to supporting the industry.
Constitute a Commission:  I am suggesting that the
Commissioner be empowered to establish a
commission of a dozen representatives of the
emerging industry.  This commission would be
instructed to: (1) assist the PTO in establishing
reasonable guidelines for patentable ideas; (2)
assist in building a library of prior art at the
PTO; and, (3) review each patent in a new industry
prior to award.
This suggestion is made only as an alternative to
the "public disclosure prior to award" process.
It is made in anticipation that changing the
patent process will take considerable time, and it
is made to counter applicants' concerns that
should they apply unsuccessfully under the current
system, they will still maintain trade secrets.
However, this is not enough.
Change Re-examination Process:  The re-examination
process at the PTO requires serious attention and
modification.  As you know, the current process
allows the challenger to a patent to pay a fee of
$2,200 and present reasons why the patent in
question should be invalidated.  This material is
reviewed by the examiner and the inventor and they
inform the challenger of their conclusions.  The
challenger is provided the opportunity to a
rebuttal and the PTO closes its door.  The
inventor and the patent examiner then work in
secret to evaluate and re-shape the patent to
maintain its validity.
I would like to emphasize that the re-examination
process needs to be changed to be fairer to both
parties.  Currently, the process greatly favors
the inventor.  A challenge can be made, but the
challenger has no additional input beyond the
initial and rebuttal stage while the PTO and the
inventor work to re-shape the patent.  The outcome
is often a changed patent which is harder to
defeat.
CONCLUSION
I would like the committee to understand that
these suggestions come out of frustration with the
system and should be interpreted to mean that we
are anxious to obtain some relief immediately.
The patents which have been granted would never
have been granted with any type of open forum.  As
long as secrecy prevails, we are not unlike
earthquake victims who are paralyzed and extra-
ordinarily anxious about moving back into their
homes and business, worrying that after-shocks or
another major quake are right around the corner.
The multimedia industry needs the confidence to
proceed in a totally focused and creative manner,
to the benefit of education, business, and
national productivity.
Testimony at PTO Hearings on Patenting of
Software-Related Invention
George S. Cole, Esq.
793 Nash Avenue, Menlo Park, CA  94025 (415) 322-
7760  -6117 (fax)
Good afternoon.
The first problem area that I would like to
address is the paucity of adequately educated
Patent Examiners. I will presume we are familiar
enough with the problem that I dont have to
detail it - even Future Shock is now twenty
years old. But 160 examiners are simply not enough
to examine annually thousands of patent
submissions in detail, keep up with the literature
in an expanding number of technical fields, and
remain abreast of the continually challenged and
adapting common law. Not that and sleep or eat
lunch, too. This problem is particularly acute in
the area of Software-Related Invention, which is
why were here today. It is so bad that there is a
serious possibility that the current approach will
be abandoned, perhaps in favor of alternatives
such as privatizing the process. We could try
giving the people in Ann Arbor a secure trade
secrets database of computer inventions, which
would then serve as the basis for seeing if a
right to sue infringers existed.
Frankly, Im in favor of improving the review
process, not weakening or abandoning it. It costs
society far less to have the determinations made
during an impartial review process than it does
through adversarial patent litigation. What the
PTO needs - what we need the PTO to have - is
access to more people with the knowledge needed in
the patent review process. We need the process to
continue to keep the current legal and technical
standards - to improve upon them, particularly the
technical standard, particularly in fast-advancing
fields such as computer software. Yet we face an
inherent problem in the current system that will
keep us from solving it by just adding more
examiners. Thats because to become a Patent
Examiner, you need a scientific degree - a
Bachelors degree - and a legal education.
Virtually all who have such dual qualifications
pick them up in that order; science first, then
the law. Very few do it the opposite order, which
is what I did - law first, then a science - in my
case, a Masters in Computer Science at Stanford
in 87, six years after my law degree at Michigan
in 81. The order most prospective examiners gain
their dual backgrounds matters - and Ill explain
why in a moment.
The old approach would be to simply try adding
more examiners. That is necessary - and I would
suggest that with some creativity on the part of
government and business, that the money to do so
could be found. Suppose every patent issued gave
the government 4% of the royalties received? But
this is not going to be the most effective
solution, overall. It simply does not use the
advances in communications we are so busily
pursuing, nor react correctly to societal trends.
For one thing, there are often far more rewarding
opportunities available to people who have the
dual training in law and a technical field than
practising in Washington, D.C. If you doubt that,
compare todays weather here in San Jose with the
East Coasts winter.
Another approach would be to stop issuing patents
in troublesome areas such as computer software. If
the U.S. were the only country where software
patents could be issued, that might make sense.
But since it is not, and since only larger
companies can realistically and consistently press
for patents abroad - and then, by international
treaty, enforce them within the United States -
this would only put us at a severe competitive
disadvantage. Our most valuable resource,
individual creativity, would possibly end up
completely stifled by this abandonment.
Another approach would be to cease to require that
the Patent Examination process involve both legal
and technical evaluation, that is, to decrease the
standards by which potential 17 year monopolies
are judged. Since we are here precisely because
people are furious with a perceived inadequacy of
standards, I do not suggest this.
A core problem with the present system, where most
patent examiners - and most patent attorneys, for
that matter - have only a bachelors degree in one
field, which they picked up before they got their
law degree. So the science the Patent Examiner
possesses is dated, and potentially outdated.
Undergraduate science used to be good enough -
just like a basic college degree used to be all
individuals needed to be on the leading edge of
our society. Thats not true any longer. By the
time science makes its way through the labs to the
educators and into the curriculum, its going to
be dated. Maybe, five years behind the times? And
undergraduates generally dont read up on the
leading edge literature in the field, if only
because they are busy struggling to establish the
underlying foundation of knowledge that would
allow them to comprehend the leading edge
literature.
Then the prospective Patent examiner takes three
years to get his law degree. And hes busy
studying in that field, so hes probably not
working too hard at keeping his science current,
let alone advancing it. Though he might start to
do so when hes bored in the third year of law.
So by the time our prospective examiner approaches
the Patent Office, his technical background is
probably eight years old. In a fast moving field
such as computer science, hes already in trouble.
And does he really have enough technical smarts to
truly comprehend just where the bleeding edge of
advances lies? But if the PTO starts to require
its examiners to have a graduate degree in
science, the pool of potential examiners shrinks
drastically, worsening an acute problem.
So how do we provide the benefits of a process
that involves both scientific and legal evaluation
with an inherent limitation on the number of
people, under our current educational system, who
simultaneously obtained both qualifications?
What I would like to suggest is that the Patent
Office consider leveraging its personnel. Just
as the Federal Judiciary can call upon Special
Masters, or Judges Pro Tem, to extend the
effectiveness of the cadre of full-time Judges,
the Patent Office should look for ways to use the
tens of thousands of individuals with advanced
education in our society. Not as full-time Patent
Examiners working solely for the Government, but
as additional personnel called in (and paid for)
as needed. Perhaps the specialists fees could be
paid by the petitioners or opposers.
The Patent Examiners job would change from doing
all of the work on every application him or
herself, to managing the process - submitting
patent applications for review to technically
qualified individuals, or consulting with  legal
scholars or practitioners on complex legal
considerations, and then coordinating and
consolidating the results. Is there a concern over
maintaining the traditional secrecey of the
application process? Researchers have lab
assistants or graduate students;  law partners
have associates.  I suggest that, since they  have
already faced and solved the same type of issues
dealing with confidentiality and tracing of
information that the Patent Office would face this
is a solvable concern.
There are many, many individuals throughout the
country who could be called upon to assist. Fees
could be paid (or, perhaps more attractively to
some, an arrangement could be made for income tax
credits or income tax waivers). Professors at
universities, legal scholars at law schools.
Researchers in governmental labs. Graduate
students, in science or law, working on an
internship basis. With the modern technology
available, a secure facsimile transmission could
allow the PTO to coordinate such efforts
throughout the country. We could see a virtual
Washington PTO office in every community in the
country. Though those of us in California would
still have the weather advantage.
The Patent Examiner then becomes a specialist in
reviewing and delegating, when necessary, to
outside expertise for impartial review, thorny
problems or those requiring familiarity with the
most recent advances in a specialized and fast-
paced field. He or she under this approach has
more of a chance to master information and rapid
changes, and not be overwhelmed by them.
Proposed Amended Regulation Concerning The
Scientific Competence of Patent Attorneys
I would like to address some particular problems
in the current regulations which attempt to
provide protection against inadequately trained
individuals serving as patent attorneys.
Section 10.7(a)(2)(ii) requires an individual, who
seeks to be registered to practice before the
Patent and Trademark Office, to establish to the
Directors satisfaction that he or she possesses
the legal, scientific, and technical
qualifications necessary to enable him or her to
render applicants for patents valuable service.
There is no requirement that this competency be
maintained. The examination of a would-be patent
attorney is only an initial hurdle; once passed,
it acts as a lifetime assurance that the attorney
possessed the necessary qualifications, both legal
and scientific. This may have been enough when
science did not advance rapidly. It is no longer
adequate.
Furthermore, the PTO presumes that a patent
attorney is competent in the field of science
underlying a patent the attorney prosecutes before
the Patent and Trademark Office. It is left for
the client to discover that his patent attorney
lacked the scientific competency to adequately
evaluate, or prosecute, his patent. The PTO,
though  required the attorney to provide proof of
competency in a given field, does not thereafter
track the  patent attorneys particular scientific
field of competency.  That initial information -
insisted upon for the protection of the public -
is simply discarded.
So for two reasons, the current PTO regulations do
not provide adequate protection to the public
against attorneys whose technical expertise is
either outdated or simply in a different field.
Necessarily, the Patent Bar is a national practice
with uniform standards; but attorneys in different
states now face different continuing legal
education standards. In many states, attorneys
must continue to study a minimum amount to remain
active in their practice - but the coursework
required, and available, almost always focuses on
a states particular rules are are dictated by its
legal education guidelines. Thus state-oriented
continuing legal education is almost never
relevant nor applicable to the Patent Office
concerns. Moreover, this places an additional
burden on attorneys who strive to keep up with
developments in their scientific domain(s) in
which they are consonant.
This does not meet with todays reality. Both
legal and scientific fields experience constant
change during an attorneys practising lifetime.
Engineers and scientists generally expect to have
to engage in on-going work, attend ongoing
education classes, or return to studies in their
field, several times during their decades of work.
Lawyers, too, are expected to be able to increase
the scope of their competency as well as to
maintain it.
The solution to the first problem is to establish,
at the time the attorney takes the Patent Bar, the
scientific field or fields in which a patent
attorney is qualified. This is in fact already
done by the Patent Office - but no record of the
determination is kept. Federal guidelines
currently determine how an attorney may initially
establish his or her qualifications; see Code of
Federal Regulations 37 CFR 10.7. The second and
third problems could be solved by additional
guidelines stating how an attorney may maintain or
upgrade his or her qualifications, and how these
efforts will also meet any continued legal
education needs under the laws, both before the
Patent Bar and before the many State Bars. To meet
these needs, and to correct some current
imperfections, the following amendment to the Code
of Federal Regulations governing registration as a
patent attorney or agent is proposed:
Section 10.7 is amended  adding new sub-sections
(c) and (d) as follows:
(c) For the protection and benefit of applicants
for patents,
(i) individuals will be registered to practice
only  in the scientific or technical fields in
which they have and maintain a necessary
background of scientific or technical knowledge;
(ii) individuals will be able to establish and
maintain multiple fields of practice by
continuing, renewing, and expanding upon their
scientific or technical training; and,
(iii) patent attorneys will be permitted to
satisfy as much as one-half of their continuing
legal education requirements by substituting
courses in a scientific or technical field which
would allow them to maintain or expand the field
or fields in which they are registered to practice
in before the Patent and Trademark Office;
(d) to meet the requirements of subsection (c),
(i) the Director is required
(a) to establish and maintain a listing of the
field or fields of scientific or technical
expertise in which any patent attorney or agent
may qualify,
(b) to update the listing of the field or fields
of scientific or technical expertise at least once
every decade;
(ii) the current list, in which a bachelors
degree from an accredited college or university is
considered to preliminarily satisfy the standard
of scientific or technical competence, is:
(a) Biology, Biochemistry, Botany, Computer
Science (including Artificial Intelligence,
Database Design, Expert Systems, Operations
Research, Operating Systems, Robotics, and
Software Design, but excluding  Computer
Management, Database or Data Management, and
Information Systems), Electronics Technology,
Engineering (Aeronautical, Agricultural,
Biomedical, Ceramic, Chemical, Civil, Computer,
Electrical, Electrochemical, Geological,
Industrial, Mechanical, Metallurgical, Mining,
Nuclear, Physics, or Petroleum), Food Technology,
General Chemistry, Marine Technology,
Microbiology, Molecular Biology, Organic
Chemistry, Pharmacology, Physics, and Textile
Technology;
(b) any person competent in any of the above
fields is also deemed competent to file  patents
for designs or commonplace items;
(iii) the Director is required to establish and
maintain a listing of the field or fields of
scientific or technical expertise in which each
patent attorney or agent is qualified,  and to
issue the initial and renewal certificates to each
patent attorney or agent upon proof of
satisfaction of the educational requirements;
(iv) each patent attorney or agent shall keep and
maintain the certificate(s) specifying the
field(s) in which he or she is qualified to
practice;
(v) an individual may maintain his or her
qualification in a field by successfully
completing, once during every five year period, an
undergraduate level course (including a
correspondence course) comprising either four
quarter hours or three semester hours from an
accredited college or university in that field,
which course would be acceptable as meeting the
requirements for breadth or depth for an
undergraduate major in that science;
(vi) an individual may establish the necessary
background for an additional scientific or
technical field by successfully completing, within
any five-year period, no less than one half years
study (four quarter courses of at least fifteen
units, or three semester courses of at least
eleven units) in courses from an accredited
college or university in that field which would be
acceptable as meeting the requirements for breadth
or depth for an undergraduate major in that
science;
(vii) the addition of an additional scientific or
technical field shall be deemed as maintaining the
requirement for one other scientific or technical
field in which the attorney is already qualified;
(viii) the completion of the course of study for
either a bachelors or advanced degree in a
scientific or technical field shall be deemed as
meeting the requirements of either subsections
(iii) or (iv) above; and,
(ix) the certificate for any given field shall be
good for nine years from year in which it was
issued or renewed.
(x) Upon enactment of this regulation, the
Director shall within four years modify the
register of patent attorneys and agents to include
the field(s) of competency for each patent agent
or attorney who was registered before this
regulation came into force, and issue a
certificate of competency for such field(s) to all
currently registered patent attorneys or agents.
Each such patent agent or attorney shall be deemed
to be competent in any field for which he or she:
(a) provides the PTO with a degree from an
accredited university; or
(b) prosecuted a patent before the PTO within five
years prior to adoption of this regulation.
Notes Concerning The Proposed Amended Regulation
(1)  The list of fields started from that
currently provided by the Patent and Trademark
Office in their handout General Requirements For
Admission To The Examination For Registration To
Practice In Patent Cases Before the U.S. Patent
And Trademark Office, and is amended to include
the range of fields dealing with Computer Science
where students will most likely have gained an
understanding of the science underlying the
design, implementation, or methodologies
applicable to software, while excluding the sub-
fields where students will more likely have only
practical understanding in applications or
business management of software.  The list also
restates the Engineering sub-fields in alphabetic
order for easier comprehension.
Two general classes of patents may be filed by any
patent attorney or agent: design patents, and
patents for items which are intended for
commonplace use, that is, items which the average
layperson would adopt and incorporate into the
regular pattern of daily life (e.g. the safety
pin, or a new recreational toy or game). The
reason for this general class is that the
evaluation of their patentability depends more on
common cultural acumen than field-specific
scientific exactitude.
The additions to the list of fields are in
italics.
(ii) the current list, in which a bachelors
degree from an accredited college or university is
considered to preliminarily satisfy the standard
of scientific or technical competence, is:
Biology, Biochemistry, Botany, Computer Science
(including Artificial Intelligence, Database
Design, Expert Systems, Operations Research,
Operating Systems, Robotics, and Software Design,
but excluding  Computer Management, Database or
Data Management, and Information Systems),
Electronics Technology, Engineering (Aeronautical,
Agricultural, Biomedical, Ceramic, Chemical,
Civil, Computer, Electrical, Electrochemical,
Genetic, Geological, Industrial, Mechanical,
Metallurgical, Mining, Nuclear, Physics, or
Petroleum), Food Technology, General Chemistry,
Marine Technology, Microbiology, Molecular
Biology, Organic Chemistry, Pharmacology, Physics,
and Textile Technology;
(b) any person competent in any of the above
fields is also deemed competent to file  patents
for designs or commonplace items;
(2)	The amount of study needed to maintain a
certificate of good standing in the Patent Bar is
similar to that deemed necessary for continuing
legal education. A four-unit quarter course will
typically require eight hours of work a week for
approximately ten weeks, for a total of eighty
hours (excluding class time). In California, which
has some of the stricter continuing legal
education requirements in the country, an attorney
must take twelve hours a year of continuing legal
education. Thus in five years, an attorney in
California will have had sixty hours of legal
courses. Half of these hours may be taken by self-
study means.
By allowing the patent attorney to count half of
his hours of study dedicated to maintaining or
expanding his scientific competency, a California
patent attorney could maintain both scientific and
legal competency with a grand total of about one
hundred hours every five years (eighty hours in a
science course, half of which count towards his
continuing legal education, plus an additional
twenty hours of continuing legal education).
(v) an individual may maintain his or her
qualification in a field by successfully
completing, once during every five year period, an
undergraduate level course (including a
correspondence course) comprising either four
quarter hours or three semester hours from an
accredited college or university in that field,
which course would be acceptable as meeting the
requirements for breadth or depth for an
undergraduate major in that science;
(3)	The amount of time needed to add an
additional field of patent practice is based on
the amount of time needed for in-field
specialization at the undergraduate level. Most
undergraduate majors  require about two years of
focused coursework. Scientific and engineering
majors typically require more than that - some
exclude all but the minimum of other courses
deemed necessary to establish an unbalanced
education. But about half of this coursework will
be mathematical prerequisites, laboratory work, or
scientific breadth courses. A registered patent
practitioner who already has a bachelors degree
will either have had the math (or find a way to
pick it up as needed), have had a practical
experience in the difference between theory and
practice of science, and, by virtue of his current
qualification, established breadth outside the
field he or she is seeking to add. Remember, also,
that the attorney seeking to take the core courses
will somehow have to establish to the instructors
satisfaction that he or she possesses the
necessary prerequisite scientific knowledge to
complete the course - or will perforce obtain such
knowledge in order to pass the course. That may
require further background work by the attorney
which he or she may wish to take on a less formal,
and less expensive, audited, correspondence , or
self-study basis. Thus the amount of focused work
necessary to establish the core knowledge in a new
domain will be much less than that required to
gain an undergraduate major in that domain.
(vi) an individual may establish the necessary
background for an additional scientific or
technical field by successfully completing, within
any five-year period, no less than one years
study (four quarter courses of at least fifteen
units, or three semester courses of at least
eleven units) in courses from an accredited
college or university in that field which would be
acceptable as meeting the requirements for breadth
or depth for an undergraduate major in that
science;
(3)	Some degree of continuing scientific
knowledge in a currently mastered field will come
from studying another field, if only because the
attorney will be constantly seeking analogies from
the current field, using shared or consonant
methodologies, or depending on mathematical
knowledge common to both. This is in part why many
degree programs insist that their students have
breadth in their background, to allow them to more
readily keep abreast of related fields. Moreover,
different scientific fields change and move at
different speeds. Rather than require the same
study in every field, a certain leeway for adding
and maintaining knowledge is granted by allowing
addition of a new field to be counted as
maintaining not all other fields, but one other
field.
(vii) the addition of an additional scientific or
technical field shall be deemed as maintaining the
requirement for one other scientific or technical
field in which the attorney is already qualified;
(4)	The Patent and Trademark Office currently
works from a presumption of the first part of this
century, that a single undergraduate degree was
all that most people, including most scientists
and science teachers, would ever have. Yet there
are an increasing number of individuals who seek
out advanced degrees, or multiple advanced
degrees. The next part of the regulation
explicitly acknowledges that adding an advanced
degree in a scientific or technical field subsumes
the underlying undergraduate degree in that field.
(viii) the completion of the course of study for
either a bachelors or advanced degree in a
scientific or technical field shall be deemed as
meeting the requirements of either subsections
(iii) or (iv) above; and,
(5)	The choice of how long a certificate remains
valid, no matter what number is chosen, will
always appear arbitrary. A fixed period is to be
preferred for two reasons: (1) it lets the
possessor schedule and plan for its continued
maintenance, or for a career change (for example,
into management); and (2) it is easier for the PTO
to maintain. A simple computer program could be
written that would keep track of registered agents
and attorneys, their field(s) of competency, and
the date of their continuing education and of
their certificates renewals. If coupled to
generated notice letters, it would require minimal
effort to operate.
The period chosen was one year less than twice the
period in which coursework is required, to allow
some time for corrective study, when an attorney
has failed to keep current, while ensuring that
only a limited period of decreased familiarity
with the field exists, for the protection of the
public.
(ix) the certificate for any given field shall be
good for nine years from year in which it was
issued or renewed.
(6)	Finally, there should be a provision for
grandfathering in all currently qualified patent
attorneys or agents, to allow both the PTO and
these individuals time to adapt to the new
requirements:
(x) Upon enactment of this regulation, the
Director shall within four years modify the
register of patent attorneys and agents to include
the field(s) of competency for each patent agent
or attorney who was registered before this
regulation came into force, and issue a
certificate of competency for such field(s) to all
currently registered patent attorneys or agents.
Each such patent agent or attorney shall be deemed
to be competent in any field for which he or she:
(a) provides the PTO with a degree from an
accredited university; or
(b) prosecuted a patent before the PTO within five
years prior to adoption of this regulation.
Currently-registered patent attorneys or agents
have two grounds for establishing field(s) of
competency. The first is that used by any attorney
or agent seeking initial registration. The second
is to give credit for existing practical
experience. The four-year implementation period is
to allow the PTO to plan and arrange for an
efficient method for registering and issuing
certificates of competency. The five-year
preceding practice period, when coupled with the
four-year implementation period, is equal to the
nine-year competency period. Once implemented,
patent attorneys will be required to maintain
their qualification by the study required in
subsection (v) for each field; so within nine
years after the adoption of the regulation (the
period a certificate of competency remains valid)
currently practising patent attorneys or patent
agents would have studied to remain up-to-date in
their field(s).
Presentation of Digital Equipment
Corporation
by Ron Reiling
at Public Hearings and Request for Comments on
Patent Protection for Software-Related Inventions
Marriott Crystal Forum
Arlington, Virginia
February 10, 1994
Mr. Commissioner and members of the panel, thank
you for the opportunity to appear today to discuss
patent protection for software-related inventions,
and the standards and practices of the Patent and
Trademark Office ("PTO").  My name is Ron Reiling
and I represent Digital Equipment Corporation.
Digital Equipment Corporation is one of the
world's largest suppliers of networked computer
systems, software, and services.  It invests
heavily in research and development and relies
upon the patent system to protect this investment.
We are vitally interested in software-related
inventions because Digital spends hundreds of
millions of dollars each year on software
development.    	It is generally accepted that
creativity and innovation drive technology and
industrial progress.  Thus, the importance of
adequately rewarding the world's best minds by
safeguarding their inventions through patents will
increase dramatically in the years ahead as
technological advances accelerate.
In today's global, highly competitive environment,
some believe that we are witnessing a fundamental
shift in business history.  We are, they say,
progressing from "managerial capitalism" to
"intellectual capitalism."  And they believe that
the importance of intellectual capital will
ultimately lead to a dramatic shift in the wealth
of the world; from material resource owners to
those who control ideas and knowledge, i.e.,
intellectual property.
A fundamental feature of the patent system is that
it establishes the basis for intellectual effort
to be regarded as an asset which can be traded in
the marketplace.  The patent system is essentially
a legal mechanism which facilitates and encourages
investment and effective marketplace competition
in much the same way that real property and
contract laws establish the basis for trade in
land and goods.
Accordingly, an effective patent system which
promotes creativity by providing a beneficial and
stimulating environment for inventors is
essential.  This environment will produce a
constant ferment of new products and competitive
processes, forging the growth of a vigorous
American economy.
Turning now to the specific issues, Digital
believes:
(1) that software-related inventions should be
treated the same as any other inventions;
(2) that no legislative changes are necessary in
order to properly protect software-related
inventions;
(3) that increased examiner training, as well as
expanded content and better classification of the
prior art available to examiners would improve the
examination process;
(4) that mechanisms are already in place for
public involvement in patenting, including
citation of prior art and reexamination, though
the PTO should provide an "early" reexamination
incentive.
A.  General Comments on Software-Related Patenting
It is important that patents can be obtained for
all types of software-related inventions,
including, for example, software-related
inventions at the operating-system level; at the
user-application level; and those pertaining to
the storage or transmission of information, such
as memory data structures, packet-switched
networks, and magnetic and optical media.
B.  Standards of Review for Software-Related
Patents
The standards for patentability applied by the PTO
for software-related inventions should be the same
as those applied to any other technology.  These
include the well-developed concepts of novelty,
non-obviousness, and adequacy of disclosure.  It
would be a mistake to single out any technology
and treat it in a discriminatory manner.
The issues attendant to software-related patenting
have been evolving for twenty or more years.  We
are finally approaching a point in this
evolutionary process where predictability may be
possible.  That is very significant for creating
an incentive for continued research and
development investment.  It would be misguided, in
our view, to redirect software-related patenting
at this time by altering the established standards
of review.
The standards of review generally prevailing
require a two prong test:  First, as a threshold
determination, the invention must pertain to
statutory subject matter under 35 USC 101.
Second, the invention must be new and non-obvious.
For both of these tests, the PTO must consider the
claimed invention in its entirety -- including all
limitations concerning structure and function of
software.  It remains a truism:  The claims define
the invention!
Recently, the PTO appears to have changed its
standard of review of certain software-related
inventions -- by ignoring novel software-related
steps (and means) in claims, therefore finding
them anticipated by prior art that does not
disclose the ignored claim features.
Consequently, the PTO has abridged its long-
standing "claim-as-a-whole" analysis for novelty
determinations.  In other words, the PTO has
imported 35 USC 101 considerations into 35 USC
102 and 103 determinations.  If left unchecked,
this approach will eviscerate the patenting of
software-related inventions.
The PTO has asked whether implementing a known
process, technique or method on a computer should
be patentable if, but for the use of software, the
overall process, technique or method is known.
The answer is emphatically yes, it should be
patentable, provided the software recitations in
the claims present a new and non-obvious
invention.  It should not be PTO policy or
procedure to exclude software limitations from
novelty determinations.
On another point, the PTO should not impose any
special duty on patent applicants for software-
related inventions under Rule 56.  Applicants
should not be required to conduct patentability
searches; meeting such a requirment could be a
hardship for individuals and small entities.
PTO Rule 56(a)(2) already encourages applicants to
examine carefully the closest information over
which the inventor (or others associated with the
application) believe any pending claim patentably
defines.  We propose that the PTO remind
applicants of that portion of the Rule in Office
Actions, and even suggest that applicants cite and
distinguish such information.  Of course, this
approach need not and should not be limited just
to software-related inventions, but, rather, be
employed with respect to applications in any
technology field.
With respect to the ways that a software-related
invention is described in an application, to a
great extent that depends on the type of
description to which the invention is amenable.
No special requirements should be proscribed or
required for software-related inventions.
Typically, block diagrams are a useful way to
communicate the software steps and functional
relationship of components included in software-
containing systems.  Blocks within the diagrams
should be deemed adequate illustrations to support
elements of both method and apparatus claims.
Program code listings should not be encouraged;
they should be accepted, provided the
specification without regard to the code listings
provides a clear and understandable description of
the structure and function of the invention so
that effective examination can be undertaken by
the PTO.  Where code listings are included as
appendix, the PTO should not distribute the code
listings unless it receives a specific request for
the appendix.  It is advisable that copies of all
patents, including any appendix, be made available
electronically to the public, e.g., over public
networks.
C.  Administrative Practices Regarding the
Examination of Software-Related Patents
i)  Quality.
With respect to PTO administration, it is vital
that it invest in quality!  The PTO has recently
shown improvements in timeliness and quality of
examinations, but further improvements are
essential.  Congress should approve the hiring and
training of more examiners, including computer
engineers.  Examiners should be required to meet
standards of excellence, and a suitable, on-going
qualification assurance program including
continuing education requirements should be
imposed.  These measures should be adopted to
improve consistency in determinations of
patentability.
ii)  Office Actions.
Examiners should be encouraged to continue to
improve the quality of Office Actions by including
better explanations of rejections.  We have
observed a recent approach in Office Actions of
providing only conclusory statements in prior art
rejections, which do not assist applicants in
understanding the nature of rejections. Office
Actions should provide more specific citation of
references and their nexus to the claimed subject
matter.
iii)  Searches.
Essential to patent examination is a comprehensive
patentability search.  Resources within the PTO
have improved greatly in recent years, and
computer searches provide a valuable addition to
patent document searches.  We believe that PTO
examiners could utilize these resources more
advantageously, and perform better prior art
searches. Too often other patent offices around
the world locate references, including United
States patents, which should have been located,
but were not, during patentability searches by the
PTO.
The PTO should study ways of improving its
computerized prior art searches.  New and improved
prior art databases could be developed and
accessed by examiners during searching.  For
example, a closer integration of the resources of
the Library of Congress with those of the PTO may
provide useful search resources.
iv)  Electronic Database.
It would be helpful if an electronic database were
developed that would include, e.g., computer
program user guides and developer kits, as well as
the vast range of other technical reports and work
product relating to computer programs.  The public
should be able to add to the database over the
Internet.
v)  Public Involvement.
Digital believes that the patenting process should
afford public involvement.  Digital suggests that
mechanisms for accomplishing this are already in
place, but are not adequately utilized.  For
example,
(a)  The PTO should consider inviting the public
to cite prior art references pertaining to issued
patents, as contemplated by 35 USC 301.  The
cited references collected in the file wrapper of
patents could assist in ensuring the issuance of
valid patents.  The public would have the sense
that the PTO wants public contributions, and the
PTO could achieve this with minimal costs.
Significantly, any prior art references submitted
to the PTO under this procedure should also be
placed in the PTO search rooms to improve search
quality in related cases.
(b)  The reexamination process could be refined to
provide an incentive for early challenges of
issued patents. For example, reexaminations
requested within three months of patent issuance
could carry significantly reduced fees. That would
place early reexaminations more within the reach
of individuals and small entities.  Early
decisions in reexaminations are in the public
interest.  Moreover, early reexaminations should
be preferred from an administrative standpoint in
that the original examiner is more likely to be
available and familiar with the patent's subject
matter. 	Unfortunately, present reexamination
practice provides little incentive to removing
invalid patents promptly after issuance, thereby
avoiding wrongful enforcement of those patents
against those who do not have "killer" references.
Many have suggested pre-grant opposition, e.g.,
following publication of applications 18 months
after filing.  We have misgivings about such an
approach, which stem primarily from the potential
for delays in examination that could result.
Post-grant oppositions, on the other hand, provide
less flexibility than the present system of
reexaminations.
 (c)  It is incumbent on the PTO to better
disseminate information about the courses of
action available to the public if a patent is
wrongfully issued, including citation of art and
reexaminations.
In conclusion, software-related patents are of
great significance to businesses today.
Businesses have a vested interest in assuring the
efficient operation of the PTO in issuing valid
software-related patents.  Software-related
patents protect and stimulate innovation today,
and will be of even greater significance as the
"information super-highway" comes into fruition
during the coming decade.
Digital is pleased to have had this opportunity to
share its views on software-related patenting.  We
would be happy to discuss any points raised in
greater depth, and we invite the Commissioner to
contact us if we can be of further assistance.
Testimony on Software Patents
[Prepared remarks of Les Earnest]
Based on my 40 years of experience in computer
system development, much of it before software
patents were introduced, I believe that the
alleged connection between such patents and the
stimulation of innovation is tenuous at best and
probably negative.  Let me confess that even
though I oppose the continuation of software
patents, as a defensive measure I have filed for
some that have been granted.
When I entered the field as a programmer in 1954,
there were only about a hundred of us in the whole
world and each of us was turning out thousands of
inventions each year.  Software was given the same
kinds of protection as other documentation, namely
copyright and trade secret.  It was certainly a
good thing that there were no software patents
because my colleagues and I could have papered
over the field and retired for 17 years or so to
collect royalties.  Since such patents didnt
exist, we kept working and had quite a good time
doing it, sharing ideas and standing on each
others shoulders to see how high we could reach.
In 1956 I went to MIT to help design the SAGE air
defense system.  It was a technological marvel,
chock full of inventions, both hardware and
software.  It was the first real-time computer
system and depended on the large software system
that was cooperatively written by many people.
This project helped transfer a lot of technology
from MIT to IBM, but almost nothing was patented.
Dozens of SAGE systems were deployed around the
country, each with a vacuum tube computer that
covered a floor area about the size of a football
field.
It is fortunate that the Soviet Union never
attacked the U.S. in that era, because the
marvelous technology in SAGE had several Achilles
heels that would have caused it to fail
catastrophically under attack.  However, those
shortcomings were kept well hidden from Congress
and the public and, as a result, so-called
command-control-communications technology became
a major growth industry for the military-
industrial complex.  The most recent example of
that line of development was the grossly defective
Star Wars system.  But that is another story.
Beginning in 1959 I developed the first pen-based
computer system that reliably recognized cursive
writing.  I believe that it was more reliable than
the 1993 version of Newton, but the idea of
getting a patent on such a thing never occurred to
me or my colleagues.  It wouldnt have done much
good anyway, because the computer on which it ran
filled a rather large room and the 17 year life of
a patent would have expired before small, portable
computers became available.
In order to cope with a personal shortcoming, I
developed the first spelling checker in 1966.  I
didnt think that was much of an invention and was
rather surprised when many other organizations
later took copies.  Of course, nobody patented
things like that.
John McCarthy and I organized the Stanford
Artificial Intelligence Laboratory and I served as
its Executive Officer for 15 years.  There was a
great deal of innovation that came out of there,
including the first interactive computer aided
design system for computers and other electronic
devices, early robotics and speech recognition
systems, a software invention that became the
heart of the Yamaha music synthesizers, document
compilation and printing technologies that later
came to be called desktop publishing, the Sun
workstation and public key cryptography.
Few of these inventions were patented in the early
period, but we later began to file for such
coverage.  The pace of innovation has necessarily
slowed over time.  Concurrently the amount of
patent protection has increased.  I suspect that
these changes are connected.
Yesterday in this forum, my friend Paul Heckel
said that Software patents stimulate new
businesses.  Im afraid that Paul has that
backwards  in fact, new businesses stimulate
software patents.  Venture capitalists want the
comfort of patents on the products that are being
brought into the market, even though know how is
far more important in most cases.
In 1980 I co-founded IMAGEN Corporation, which
developed and manufactured the first commercial
desktop publishing systems based on laser
printers.  We filed for software patents to try to
appease the venture capitalists, even though it
was not actually important to our business.  Of
course, they didnt understand that and the
lawyers were happy to take our money.
Based on my experiences, I also joined the League
for Programming Freedom to help resist the patent
conspiracy and I later served for a time on its
board of directors.
In summary, for many years there was a great deal
of innovation in the computer software field with
no patents.  Under the stimulation of software
patents, the pace now seems to have slowed.  I
believe that there may be a connection, not only
because of the time that must be spent in deciding
what to cover and preparing the filing, but also
because patents owned by other organizations, many
of them actually representing prior art,
constitute a mine field that must be carefully
navigated.  I recommend a return to the good old
days, when success depended on moving faster than
the other guys rather than trying to catch them in
a trap.
STATEMENT BY DENNIS FERNANDEZ
Fenwick & West
Palo Alto, CA
INTRODUCTION
Good afternoon, ladies and gentlemen, my name is
Dennis Fernandez.  I am a registered patent
attorney at the Silicon Valley-based, technology
law firm of Fenwick & West.
Before I practiced law, I was an electrical
engineer and technical manager for several years
at various companies in the computer and
electronics industry, including NCR/AT&T, Digital
Equipment Corporation, Raytheon, and Racal
Limited, where I did semiconductor chip design and
processing, as well as managed chip marketing and
distribution.
Today, I specialize in patent prosecution and
litigation in the semiconductor chip industry.
And as you well know, in this highly competitive
electronics industry, intellectual property
protection has become a very important part of
doing business.
This afternoon, I wish respectfully to share with
you a few brief comments based on my practical
industry experience, as an electronics engineer
and also as legal counsel to such engineers, as to
how software patents have already, or might in the
future, impact their business interests.
DISCUSSION
Because of the limited time alloted for speaking,
I direct my comments only to a few points which
are relevant to chip design software.  I believe
these comments may reflect the interests of
companies who do business in an area known as
electronic design automation, or "E.D.A.",
wherein fairly sophisticated software is written
to automate the highly complex process of
designing and testing semiconductor chips and
related system boards.
In this context, my comments pertain generally to:
(1) special technical need for software patent
protection, (2) practical timing problems in U.S.
patents, and (3) apparent effect of software
patents on innovation.
	Special Technical Need for Software Patent
Protection
Because of the highly functional nature of
technical innovations developed in EDA software
products, patenting seems to be an appropriate way
for legal protection.
For example, EDA software typically includes
software programs for synthesizing logic circuits,
generating test program vectors, or simulating
digital and analog system components.  These
software functions involve fairly abstract ideas
which would not be protectible ordinarily under
copyright law, but would be protectible under
patent method or apparatus claims, if sufficiently
inventive.
Thus, due to the largely functional nature of
innovations in EDA software, I believe that patent
protection would be appropriate.
	Practical Timing Problems in U.S. Patents
There appear to be two practical problems which
may apply to EDA companies with respect to timing
related to U.S. patent applications.  First, the
17-year patent duration may be too long.  In the
context of the EDA industry, where software
products typically have product lives that less
than half this duration, it might be more
appropriate to provide a shorter period of patent
enforceability.
Second, the current 2 to 3-year backlog in the
United States Patent & Trademark Office,
particularly in the electronics and software arts,
may pose some problems to companies in the EDA
industry, both for those companies who wish to
enfore their patents during the market window of
their software products, and also for those
companies who wish to learn the existence of
relevant, and thereby avoid possibly, competitor
patents.
	Apparent Effect of Software Patents on
Innovation
In the highly competitive EDA business,
particularly in the Silicon Valley, it has been my
experience in a number of recent cases that the
presence of relevant software patents do not
necessarily serve to impede or deter competitive
product development.
Typically, clients in this business tend to be
fairly sophisticated in their understanding of
patent enforcement matters.  These individuals are
aggressive entrepreneurs, typically backed by
venture capital institutions, who are doing
pioneering technical work and product development,
and these individuals often find ways to design
around even what initially appear to be fairly
broad claims.
Also, it has been my experience that such EDA
clients are often able to raise reasonable
arguments of non-infringement based on relevant
prior art, thereby providing themselves with
opportunities to make, sell or use their EDA
products, possibly without legal liability.
Thank you very much for your kind attention.
Statement by Jerry Fiddler for PTO Hearings
I sit before you not as an expert in intellectual
property law.  Im not a lawyer, and most people
in this room know far more about intellectual
property law than I ever will.  Rather, I wish to
speak to you as an expert software engineer, and
the founder and CEO of a successful software
company.  Wind River Systems is a $30M public
company, with 40% of our revenue from overseas.
We create software for embedded systems, the
microprocessors found inside our cars, fax
machines, telephones, robots, factories, and
consumer electronics.  According to Software
magazine, last year we were the ninety-second
largest software company in the US.
My perspective on software patents is simple.
Stop issuing software patents.  Software patents
should not exist.
I say this for a number of reasons.  First and
foremost, I look at the reason patents exist,
which is for the benefit of society.  Certainly
there are fields where patents are essential
because of  the  large investment involved for
creation of technology and the ease of copying
that technology.  In such situations, patents
incent the major investments necessary for those
inventions which benefit society.  This doesnt
apply to software.  Availability of patent
protection is not necessary to incent creation of
software.  Copyright and trade secret protection
are entirely adequate and more appropriate for
protection of software.  Yes, major investments
are necessary to create software, but that
investment is primarily involved in quality
implementation and support of the software, not
development of the algorithms and concepts that
might be patentable.  Therefore, unlike a drug,
for instance, it is not substantially cheaper or
quicker to copy a programs functionality than it
is to develop the original.
The deal society makes with the inventor - Tell
us about your invention, and you can have a
monopoly for seventeen years - is not a fair deal
today with  software.  In a field changing as fast
as software is today, seventeen years might as
well be a millennium.  The deal might as well be
phrased Tell us about your invention and you can
monopolize it forever, so the fact that we,
society, know about it is meaningless.
In fact, patenting of software is actively harmful
to society.  People dont need software
monopolies.  They need software that is open,
compatible and that adheres to their expectations
and standards.  They need the software equivalent
of expectations like accelerator on the right,
brake on the left.  Patenting of software can
only impede these goals.
Furthermore, patenting of software will not
accelerate its creation or advancement.  Rather,
it will impede that advancement, which is far
better driven by the free market than by monopoly.
Imagine where we would be today if patents had
been granted on technology or concepts critical to
word processors or  spreadsheets.  Rather than the
sophisticated and elegant tools we now have
available thanks to competition, we would still be
using something very much like the primitive first
versions of those tools.  Worse still, we must
remember that word processors and spreadsheets
have been largely responsible for spawning an
industry, and making the personal computer a part
of most of our lives.  The quality and
advancements in those tools have created
opportunities for computer manufacturers, and for
other software vendors who can sell to users who
have computers primarily to run those primary
tools.  It is not too strong to say that if there
had been strong patent protection for the first
word processors and spreadsheets, the personal
computer industry might  today be five to ten
years behind where it actually is.  As another
example, if aspects of the TCP/IP network protocol
had received patent protection, today the Internet
might very well not exist.
Creation of software will also be impeded by the
difficulty of writing software that doesnt
inadvertently trip across a patent somewhere.
This is true in other fields where patenting is
less controversial, but it is far worse in
software.  It is not unusual for a program to be a
million lines long, and consist of many thousands
of subroutines and functions.  Algorithms and
ideas are embodied in each of these components,
and in combinations of them.  Some of these
algorithms may be studied in school or found in
books, but many are developed on the fly as the
program is created.  Many of these subroutines and
functions might be far afield from the purpose of
the program as a whole.  An operating system, for
instance, might contain routines for sorting and
searching, handling queues, parsing text,
controlling hardware, testing memory, etc.  It
will be impossible to know which of these
routines, algorithms and ideas violate a patent,
because every programmer would need to understand
every software patent ever issued.  Software is
simply too complex, and composed of too many
pieces, components, and ideas to lend itself to
being broken down into patent-sized chunks.
I envision a world in which progress in software
is totally blocked by a web of patents, owned by a
very few very large companies.  Not the best or
the most creative companies, but rather those with
the most lawyers.  In a world like that, it would
be completely impossible to start and build a
company like mine.  This nightmare could come to
pass very quickly.
To date, there has been little litigation
regarding software related patents.  God help us
all when that litigation does begin.  Judges and
juries will be asked to rule on whether a large,
complicated program, potentially millions of lines
long and written in an obscure computer language,
violates an arcane patent.  The claimed violation
will be built into the very fiber of the  program,
hidden within the programs structure and data in
complex and subtle ways.  One expert will say one
thing, another expert will say the opposite.
Neither judge nor jury will be competent to
understand the nature or veracity of the patent,
much less which expert is closer to the truth.
The patent will have been issued by an examiner
who is not expert in the specific software field,
and might not understand the concepts essential to
operating systems, fuzzy logic, or whatever, much
less the prior art.  The chances of a fair and
informed decision will be vanishingly small.
Software is perhaps more analogous to literature
and music than it is to mechanical invention.  It
would be silly to think about patenting the first
person novel, or the sonata form.  Yet there are
software patents that, to a software engineer, are
just as absurd.
As a software company CEO, I am perfectly content
to compete based on the quality of the software we
create and the support we provide for it.  I am
fully satisfied with copyright, contract, and
trade secret protection for the software we write.
We have begun to work on some patent applications
because I think we may need them for defensive
reasons, but I would far rather we didnt need to
do so.  If software patents become prevalent, it
will seriously interfere with our ability to
continue improving our products and developing new
ones.  It will also interfere with our ability to
provide open-ness and compatibility to our
customers - a key part of the value we provide
them.
The  best possible result of these hearings for
us, for our customers and for society would be for
software patents to simply go away.
TESTIMONY OF R. LEWIS GABLE
My name is Lewis Gable.  I am an attorney with the
law firm of Welsh & Katz, Ltd.  We are an
intellectual property firm with offices in Chicago
and Arlington, Virginia.
I have practiced patent law for over 30 years
specializing in the preparation and prosecution of
complex electronic and now computer-related and
software-related inventions.  While obtaining my
law degree, I was an Examiner in what was then
known as the Patent Office.  I examined the basic
patent of Kirby for the integrated circuit.  I
practiced through the seventies when there was
great doubt as to whether software-related
inventions were patentable subject matter as
defined by 35 U.S.C.  101.  I witnessed the
impact of Diamond v. Diehr, 450 U.S. 175 (1981),
and the establishment of the Federal Circuit.  I
have talked and written about software-related
inventions in the context of  101, often with
Mike Fleming of the Patent and Trademark Office.
I chaired the Electronic and Computer Law
Committee of the American Intellectual Property
Law Association.
The views that I express this morning should be
attributed only to myself.
I will focus on Questions 2 and 6 of Topic B.
Fundamentally, both ask how can the PTO improve
the quality of its examination process.  Question
2 asks how can an Examiner measure the "ordinary
skill of art" and Question 6, how "can the PTO
change examination procedures to assess novelty
and obviousness of software-related inventions?"
These Questions go to the heart of the obviousness
determinations required by Graham v. John Deere
Co., 383 U.S. 1, 17 (1966).
My point is that the experience level of the
average Patent Examiner is low and that the lack
of experience effects the quality of patent
examinations.  This is true of all arts, but is of
particular concern to software-related inventions.
Low experience levels are the result of constant
Examiner turnover.  The positive aspect of this
problem is that, perhaps, it can be effectively
addressed.  I am not saying that the Office
employs poorly qualified candidates, but rather
that examiners with only a few years of experience
fail many times to provide an adequate patent
examination.
The average years of experience have dropped over
a number of years since I was an Examiner.  When I
joined the Patent Office, my division (no groups
or art units in those days) was comprised mostly
of experienced Primary Examiners with 10 to 15 to
20 years of experience.  As a novice, non-primary
Examiner, all of my work was supervised by my
Primary Examiner, John Burns.  He retired while I
was still in the Office.  Mr. Burns had two new
examiners to train.  He could spend time with us
and criticize our Office Actions before they were
mailed out.  If I missed some feature of the
invention, he could identify a patent with that
feature by the inventor's name and the shoe where
I could find it.  He had examined himself or had
supervised the Examiners who had issued all of the
patents in the  inductor art for perhaps 10 to 15
years. Then, the ratio of inexperienced, non-
primary Examiners to Primary Examiners was low.
Today that ratio has been turned upside down.
Anytime that I receive an Office Action, I look to
see whether the responsible Examiner is a Primary.
I rarely have a Primary Examiner examining my
applications.  When I attend an interview in the
Office, I make it a practice to see how many
Primary and non-primary Examiners are in an Art
Unit.  Often the ratio is 9 or 10 to 1.  That
ratio also tells me a lot about how much
supervision the non-primary Examiners will recieve
from their Supervisory Patent Examiner.
One patent I obtained illustrates the critical
difference between experienced and inexperienced
Examiners.  This application involved  the use of
artificial intelligence for setting up a printing
press.  The application included 100 plus pages of
specification and 25 plus pages of flow diagrams.
It was examined in the printing group.  The
initial Office Action was received and it had only
a single rejection, i.e., the specification was
rejected as being inadequate under 35 U.S.C. 
112, first paragraph.  I interviewed the Examiner.
She had less than 6 months experience in the
Office.  She explained that all of the more
experienced examiners did not want this long,
complex application and had passed it down to her.
I went to the Group Director with my problem.  He
was responsive.  He assigned a senior Primary
Examiner to help the new Examiner.  The next
Office Action dropped the 112 rejection and cited
a number of pertinent references.  The references
were clearly evaluated and the rejections well
stated. I could then amend the application to
distinguish the prior art and bring this
application to issuance.  Both the Office and I
had done our jobs well and a sound patent was
issued.
The differences between a good and a poor Office
Action are not always apparent on their face.  An
Office Action can list all of the issues.  There
can be a  101 rejection.  The statutory basis for
each rejection may be set out.  The purported
teaching of a reference may be identified.  The
basis for combining references may be stated.
Even so, such an Office Action may be poor.  The
references may not be relevant, much less have a
clear teaching of the recited invention.  All of
the pertinent references may not be cited.
Significant claim limitations may be overlooked.
It is difficult to respond to such Office Actions.
The responsive Amendment is often quite long and,
when that set of rejections is overcome, the next
Office Action may set out a new round of
rejections.  The expense of such examinations is
unnecessarily high for my clients and the
resultant patents are clouded with a meaningless
if not confusing file history.
It is not surprising that new Examiners may issue
poor Office Actions.  Patent examination involves
complex issues of law and technology.  Examiners
examine applications within a limited technology
defined by a group of subclasses.  Though limited,
it takes years of examining to learn thoroughly
the technology.  The ability to pick a pertinent
reference out of a shoe comes when the Examiner
has examined and issued the last 5 shoes of
patents.  The legal issues are equally
challenging, particularly in the Groups 2300 and
2600 which examine many of the software-related
applications.  Section 101 rejections are
particularly difficult. There are no bright lines
and such  determinations involve an evaluation not
only of the claims but the underlying
specification.
When the ratio of non-primary to Primary Examiners
is high, it is difficult to adequately supervise
all of the novice Examiners. Inadequate Office
Actions may be issued without thorough review.
SPEs with 10 or more non-primary examiners simply
cannot thoroughly evaluate each applied reference,
much less read the claims and specification of
each application.
My personal observations are confirmed by the
personnel figures provided by the PTO.  For
Computer Group 2300, there are approximately 160
Examiners.  Of that total, 130 Examiners or over
80% are non-primaries.  89 Examiners or over 55%
have less than 2 years experience.  Non-primary
examiners cannot issue Office Actions on their own
authority.  Their Actions must be reviewed before
issuance by a Supervisory Patent Examiner.  There
is one SPE for each of the 13 Art Units in Group
2300.  The arithmetic is simple; there are on the
average 10 non-primary Examiners for each SPE in
Group 2300.  In some Art Units, there are as many
as 14 non-primary examiners for one SPE.
The significance of these numbers is disturbing.
I don't believe that it is possible for one SPE to
review thoroughly the work product of 10 and
perhaps as many as 14 non-primary Examiners. My
personal observations are that Office Actions
prepared by non-primary Examiners are poorer in
quality than those prepared by the experienced
Primary Examiners.  I use the word quality here in
the sense of Questions 2 and 6 of how well or how
poorly "the level of skill in the art" and "the
novelty and obviousness" of the claimed inventions
are determined.  I believe that non-primary
Examiners and particularly those with less than 2
years experience may not fully understand the
invention sought to be patented or the prior art
references that they would apply.  I further
believe that the PTO does not have sufficient
management resources at the SPE level to supervise
the work product of its non-primary Examiners.
These numbers also indicate that there is a
massive Examiner drain at the 2-3 year level.
These Examiners are going to law firms and
corporate patent departments.  The attraction in
great part is salary.  After 2 or 3 years
Examiners are making only $32,000 to 35,000, and
firms and corporations can pay more.  Levels of
pay for Primary Examiners are more competitive
with those paid outside the Office.  The problem
is that most Examiners won't wait the 7 or more
years required to become a Primary.  Thus the
cycle continues.  An Examiner comes to the PTO, is
trained for 2 to 3 years and then leaves.
Mr. Commissioner, I have heard you talk at the
fall meetings of the American Intellectual
Property Law Association and the Intellectual
Property Owners and I applaud your efforts to
improve the environment and the job support given
to Examiners.  Your present efforts and, I would
suggest, a revision of the Examiner pay schedules,
particularly at the critical 2 and 3 year levels,
will do much to solve the Examiner turnover
problem.
I appreciate very much this opportunity to express
my views.
DRAFT TESTIMONY AT PTO PUBLIC HEARINGS JAN
26-27 1994
Scheduled slot: Thursday, Jan. 27, 10:59 am
Honorable Commissioner,
Distinguished members of the Panel,
MY NAME:		Gideon Gimlan
(ADDRESS:		c/o Fliesler, Dubb, Meyer &
Lovejoy
1281 Oakmead Parkway (Suite 202)
Sunnyvale, California 94086
Tel:  (408) 773-9100
Fax:  (408) 773-9830)
CURRENT     	Patent attorney with law firm of
Fliesler, Dubb,
AFFILIATION:	Meyer & Lovejoy of San Francisco
and Sunnyvale, California.  The firm represents
numerous high technology companies located in
Silicon Valley and elsewhere.  Its work (and my
own) includes the preparation and prosecution of
software-related patent applications in a variety
of areas including: networked computer systems,
graphic imaging systems, and mainframe computers.
PAST			7+ years as a Hardware/Software
engineer.
COMPUTER		Work assignments included choosing
to implement
EXPERIENCE:	functionalities in software or
hardware.
VIEWS OF:		These comments are my own personal
views based on general experience and not those of
my law firm or of any clients represented by the
firm.
I WANT TO FOCUS MY COMMENTS ON QUESTION NUMBER:
A3: 	What are the implications of maintaining or
altering the current standards for patent
eligibility for software-related inventions?
What is current PTO practice ?
And where is it leading us in the software arts ?
My personal experience is that, in so far as
anticipation and obviousness are concerned, the
Examining corps treats software-related inventions
no differently than other kinds of inventions. The
legal tests for 102/103 determinations are fairly
well established and most Examiners treat
software-based cases with the same uniform
fairness as hardware-based cases.  The issue of
finding good prior art is no different that in any
other art.
As an aside, I find that the EPO (European Patent
Office) tends to find closer prior art than does
the US Patent Office --but that applies to general
subject matter rather than to software-related
cases.
In so far as inquiries under 35 U.S.C. 101, I
fail to see across-the Office uniform consensus on
what is or is not statutory subject matter, the OG
guidelines notwithstanding.
Treatment of the statutory subject matter question
appears to vary greatly from Examiner to Examiner.
Some Examiners are lenient in what they consider
to be statutory while others seem to be on a
witch-hunt for a 101 basis of rejection.  This
injects a considerable degree of uncertainty into
the application process. You can't predict the
outcome of a 101 issue with any degree of
confidence. It very much depends on which Examiner
you draw for your case.
Perhaps, "software-related" isn't the proper term
for what I am trying to address here.  The problem
more properly fits under the broader rubric of:
"algorithm-related" inventions and should the PTO
be expending so much time and energy trying to
weed out claims that arguably extend or encroach
into nonstatutory areas?
I suggest that the answer is no.  The patent bar
and Examining corps are wasting client money and
taxpayer money arguing over metaphysical
abstractions, that to technologists in the field,
sounds like we are debating over, How many angels
dance on the head of a pin.
The case of In re Iwahashi 12 USPQ.2d 1908 (Fed.
Cir. 1989) serves as a good example.  It was not
strictly-speaking, a software-related case because
the claim preamble started off with "An auto-
correlation unit ... comprising:".  But, if one
wished to take some license and re-write the
preamble as reciting "A computer comprising:" (as
was done in Example-B of the PTO request for
comments), this should not in my mind materially
alter the gist of the invention.
Any digital signal processor (DSP), including the
one in Iwahashi can be viewed as a computing
machine or "computer" in short.  One can then go
out on a limb to call each invention that uses a
digital signal processor (DSP), "software-related"
because its operations can be described in
algorithmic terms.  Notice that I didn't say,
controlled by a "computer program" or controlled
by "software".  There are those skilled in the art
who will argue even today that a computer program
can be used as a "description" of the operations
to be carried out by a machine and the description
does not necessarily have to form part of the
machine that actually performs the operations.
The machine's control lines could be instead
driven by combinatorial logic.
In the end, it should make little difference that
an invention is implemented in hardware, software,
or in-between-ware.  In the eyes of the electronic
circuits that carry out a given invention there
really isn't any functional difference.  (The term
"functional" is to be distinguished here from
other practical considerations such as
price/performance.)  A set of electrical signals
are first supplied to the DSP machine.  Perhaps
the input signals originate from a memory device
like a ROM or a floppy disk, perhaps they come
from an X-ray machine.  Irrespective of origin,
the signals are somehow transformed by the
machine. Then they are output, perhaps for return
to a memory device, perhaps for routing to some
other immediate use; such as creating a real-time
high-definition video image.
One inventor recently looked at me with bewildered
eyes when I tried to explain some of the related
101 concerns and said, "I don't understand, data
is data, what does it matter whether it comes from
an X-ray machine or from memory? What is the
government up to?" [Some literary license taken in
this quote.]
I think the problem and answer lies in how we, as
human beings, come to appreciate the subtle
implications of a given invention.  We need to
step back and ask, Has the inventor come up with a
faster or cheaper way of doing things (even if the
improvement is found in software)? Has the
inventor compressed the physical size of an
apparatus, so that something smaller can now do
the job of something that previously had to be
much larger?  Has the inventor obtained a higher
level of resolution than was previously feasible?
We see in hindsight that these kinds of
improvements --faster, smaller, cheaper, better
resolution-- have brought us the miracle of
affordable palm-top computers, ones that have pen-
based, graphical user interfaces (GUI's) and ones
that, arguably, give even the technical neophyte
access to the powers of the digital revolution
because of their intuitive nature.
In hindsight, I think we can all agree that these
are the kinds of innovations that our patent
system is supposed to protect and foster.
But when we turn away from past glories and look
to the next invention, we are somehow daunted by
the enigma of this thing we call software.  We are
all, in a sense, blind men beating at a
pachydermial beast; each finding something
different based on the angle from which we
approached it.  Some say this software stuff is
more like the punched paper in a player piano, or
like the music recorded on a vinyl record.  Others
say its more like the mathematical proofs of their
college calculus classes.  Yet others say its
something that is still in its infancy, that will
grow and evolve into something we still do not
fully understand.
In the mean time, the software applications keep
pouring in. So what should we do? Should we tell
those who craft new software to go away?  You are
not welcome at the US PTO?  Should we direct every
algorithm-smith over to the line at the Board of
Appeals? Every Examiner has his or her own
personal angle on how to deal with the problem.
This haphazard system gives inventors
--particularly those that have the misfortune of
being assigned to an "anti-algorithm" or "anti-
software" Examiner-- the impression that they are
not receiving uniform, fair treatment.  It's
absurd to the mind of many technology gurus that
an invention is OK if implemented in hardware but
suddenly becomes unacceptable if implemented in
software.
The pat answer is, of course, that inventors can
always go to the PTO Board of Appeals, and if not
satisfied with results there, they should go
higher --to the Court of Appeals for the Federal
Circuit in Washington D.C.  But that doesn't
happen with regularity.  Many patent-worthy cases
fall by the wayside not because the Applicants
agree with the Examiner's 101 position (and I
sometimes wonder if even the Examiners agree with
their official position), but because of monetary
considerations.
One could argue that well to-do corporations
should lead the charge into the courthouse and
create better law.  That doesn't always work.
Some corporations are afraid to get on the bad
side of a key Examiner.  Even those that are more
brazen think twice about pouring more time and
money into an application that is already twice
rejected by an Examiner.  Most inventors, and
corporate executives for that matter, do not have
the experience or patience to grapple with the
kind of mystical questions that are posed when a
101 rejection is raised ... for example, whether
the claim is TRULY directed to statutory subject
matter or whether it is nonstatutory matter
"disguised" in the sheep's-cloth of otherwise
statutory, but nonetheless "insignificant" pre- or
post-computational activities.  After a while,
they would rather forget the whole thing.
If this state of affairs continues, I think that
many in the digital/software arts will simply
bypass the US Patent Office. They did so in the
past, prior to Diamond v. Diehr 209 USPQ 1 (S.Ct.
1981), and they will do so again, particularly if
word gets out that software-related applications
are not welcome at the US PTO.
In the short-run this is wonderful news for the
over-burdened Examiner's that deal with these 101
questions.  In the long run, our patent system
will fail to do what is supposed to, namely
encouraging inventors to come forward with their
inventions. Eventually, another country will pick
up the torch.
How should we deal with algorithm-related
inventions ?
I don't think we should simply stand back and wait
for the right case to make its way to a
sympathetic judicial panel.  We need to put out
the welcome mat for software inventions sooner
than that.  The on-going witch hunt at the PTO for
nonstatutory subject matter is driving our
technology gurus away.  These are the people we
need most to carry us into the future.  We need to
encourage them to file more often at the PTO, not
less. We need to encourage them to disclose rather
than to conceal.
Here is my proposal:
Unless the claims in an Application are clearly
limited to the practice of a mathematical
algorithm, the PTO should allow the Applicant to
disclaim within the body of the claim that portion
of the claimed system/process that falls outside
the scope of 35 U.S.C. 101 and then allow the
case to issue as is, assuming there is no other
basis for rejection.
After the patent issues, we should let experience
and the advice of technical gurus help us decide
whether an accused apparatus or method falls
within the scope of 101 such that it can be
covered by the claim or whether the accused
activity is protected by 101.
OTHER SUGGESTIONS
We need to amass a database that will help us
better understand the impact on society of
algorithm-related inventions and other emerging
technologies.
Congress and the Judiciary will forever have a
difficult time keeping up with technical
subtleties in new inventions.  They will
increasingly have to look to the Patent Office or
some other government agency for help, maybe not
as to what the law should be, but perhaps more so
as to what the expected impact will be on the
public welfare if patents are allowed or not
allowed for different kinds of inventions.
To answer that question on a more rational basis,
we need to accumulate a historic record of both
issued and non-issued (open-to-the public) cases
that are in some way related to the technology;
software or other.  Then we have to assess the
long and short run impacts on the public based on
a variety of what-if questions.  What if a patent
for drop-down menus had not been issued.  Would
competitors have tried to come up with
alternatives? What if a patent had been issued in
the case of Gottschalk v. Benson 175 USPQ 673
(S.Ct. 1972)?  Would engineers have nonetheless
come up with other practical ways of performing
BCD to binary conversion?  Was the court in Benson
ill-advised about the technical feasibility of
doing BCD to binary conversion in other ways?
This is something people in academia can do once
the database begins to build. Then we can react on
the basis of reason rather than hysteria.
A5:	Proposal for new, supplemental form of
protection for software inventions.
Rather than replacing patents and copyrights, add
a supplemental form of protection that software
practitioners can use.  The filing requirement
would be the entire source code and sufficeint
information to enable one skilled in the art to
compile, load, execute, and use the software.  The
test of novelty and infringement would be
algorithmic similarity as judged by one of
ordinary skill in the art.  The length of time
would be seven years and there would be no
injunctive relief.  A tribunal will decide a
mandatory royalty rate.
A1:	Protectability of Examples C (code on disk)
A floppy disk can be as much an article of
manufacture that cooperatively engages with a
digital signal processor (DSP) as a carburetor is
an article of manufacture that cooperatively
engages with the remainder of an automobile
engine.  Until the rest of the car supplies vacuum
power and a flow of gas, the parts of a carburetor
do not perform their associated functions.  But
that doesn't seem to bother the art units that
handle this kind of technology.  Ditto for any
electronic circuit sans a power supply.
A1:	Protectability of Example  G (database for
doing business).
If the technical "effect" is one that leads to a
faster, more compact, more accurate machine, then
the fact that the machine is used for conducting
business bears no weight.
Thank you for letting me express my personal
opinons on these issue.
IBM TESTIMONY
My name is Victor Siber.  I am Senior Corporate
Counsel for the International Business Machines
Corporation.
My comments represent the views of the IBM
Corporation.
The IBM Corporation spent $6.5 billion dollars on
research and development in 1992.  In the same
year we employed over 22,000 software programmers
and we sold $ 18.5 billion dollars of software
products and services ($11.1 billion software).
So we are intensely interested in the subject
matter of these hearings.
We protect the detailed expression in every one of
our software products by copyright.  And
approximately 3-5% of these programs contain new
and unobvious functions that are protected by
patents.  Patent coverage on these inventive
functions protects our investment, gives us
important business leverage, as well as access
into foreign markets.
I understand that this hearing was scheduled, in
part, to address questions raised by some broad
software patents that have recently issued.  These
patents are alleged to cover old processes.  The
response by some is to call for changes in the law
to prevent the issuance of patents in this
technology.
In the short term, that would hurt the U.S.
computer industry.  And in the long term, all
industries that use computers to gain a
competitive advantage will suffer.
The argument over these controversial patents is
not that they cover unpatentable abstractions.
These patents cover quite useful functions, which
others in the industry want to use.  The issue,
and the key to the controversy, is something quite
different:  whether these patents cover truly new
and non-obvious functions and thereby add
something to the useful arts.  In the final
analysis, that is the job expected from the U.S.
Patent & Trademark Office.  And it is a job that
is doable.
The United States was the first, and continues to
be the global leader in computer hardware and
software technology.  This technology is
important, not only in itself, but as a driver of
innovation in other fields.  And today it is
facing stronger and broader global competition.
As the industry matures and competition from
overseas increases, patents will be the key to
protecting the most valuable U.S.-originated
innovations.
You have posed a number of questions for the
hearing today.
Beginning with question 3 relating to altering the
standards for patent eligibility for software
related inventions, we completely oppose such a
proposal!
Going into the next century, the key inventions
will be in information processing.  Altering the
standards for patent eligibility for software-
related inventions will shift investment away from
this area.
The purpose of R&D in any technology is to gain an
advantage over your competitor.  But if your
competitor can legitimately copy the fruits from
your R&D and can create a product to compete head-
on with your product while you are still trying to
build a market for the product, then you have
lost.  The long term value of R&D in the
marketplace is in the new functions implemented by
software.  If such new functions are protected,
investment flows to the industry.  If not,
investment will dry up!
There are several other points I want to make on
this issue.
We can't divorce computer program-related
inventions from computer hardware and other
microprocessor inventions.  The overlap between
the two is so great that cutting back on one
automatically cuts back on the other.
An alteration in the standards for patent
eligibility will also put the courts and your
office in a quandary.  That's because computer
program-related inventions can be implemented
either in hardware or in software form. Applicants
will simply cast their patent claims in terms of
electrical circuitry.  And if you limit claim
coverage over computer program implementations of
circuit inventions, you will turn electrical
patents into nullities, because the circuit
function can be implemented by a programmed
computer.  Furthermore, if process patents cannot
reach computer implementations of the process
steps, there will be a negative impact on every
industry that uses computer-controlled industrial
processing or uses microprocessors in their
products.
From an international standpoint, a cut-back on
patent eligibility for computer program-related
inventions sets a truly unfortunate precedent for
the developing world.  It would violate GATT and
NAFTA provisions that prohibit discrimination of
patent eligibility based on technology.  The
biotechnology area provides a graphic example of
what happens when countries limit protection for a
technology. Leading European companies working in
this area of technology simply moved their biotech
R&D operations to the United States.
Concerning the issue of sui generis protection,
replacing patent protection for new and nonobvious
program and process functions, and replacing
copyright protection for the original expression
contained in computer programs with some form of
sui generis right would be devastating to the
industry.
In a single act, U.S. industry would be
unilaterally disarmed relative to our competitors
in Japan and Europe.  We would lose patent
priority rights in the 114 countries of the Paris
Convention and we would lose the copyright
protection automatically afforded to American
program works in 102 countries, as required by the
Berne Copyright Convention.
As you know from the TRILATERAL Work Studies
conducted jointly by the U.S. Patent and Trademark
Office with the Japanese Patent Office and the
European Patent Office, the standards for
patentability in the area of software-related
inventions are generally the same, except at the
far margins.  The Japanese Patent Office has
published for opposition in the last six years
approximately 4500 patent applications on
software-related inventions, while the EPO has
issued approximately 2700 patents since 1980,
which have resulted in multiple European member
country patents.
The majority of these software-related patents in
the EPO and the great majority in Japan are
issuing to non-U.S. companies.  Without U.S.
patents of a reasonable scope to bargain with,
U.S. companies will potentially lose access to
those markets.
With the introduction of a sui generis system,
there would be an extended period of uncertainty,
the bane of businessmen and investors, as a body
of case law was developed interpreting the new sui
generis law and determining its scope.
Additionally, there would be a complete absence of
effective international protection for the new
right.  The internationalization of a sui generis
law would require a sui generis treaty.  Such a
treaty would be negotiated without any
international consensus on what sort of protection
regime would be appropriate.  As you know, the
primary multilateral treaty to date for a sui
generis right, The Treaty on Intellectual Property
in Respect of Integrated Circuits, known as the
Washington Treaty, was strongly influenced by
developing countries (the GROUP OF 77) hostile to
IP protection generally.  The result was a treaty
so flawed that not one single major chip-producing
nation would support it.
The only remaining way to internationalize that
sui generis chip-protection right was through
reciprocity.  But reciprocity has its rewards and
its vices.  The European Community now points to
the reciprocity provisions in the U.S.'s
Semiconductor Chip Protection Act to justify its
discrimination against America's authors through
the reciprocity provisions in its E.C. Directive
on Copyright term extension, and for denying U.S.
author's the benefit of the unfair extraction
right in the draft E.C. Directive on database
protection, and in refusing to grant movie and
music producers and authors their fair share of
the blank tape and movie levies.
Finally, regarding the series of claim format
examples in question 1, we believe that the format
of the claim should be viewed from the perspective
of patentable subject matter.  If the claim, as a
whole, is directed to a machine, article of
manufacture, or machine-operated process, then
subject matter eligibility should not be an issue.
The focus of the examiner should be on the normal
statutory tests of novelty, non-obviousness, and
utility of the claim as a whole.  And to insure
compliance with the formality requirements under
35 USC 112, i.e., that the invention is
particularly pointed out and distinctly claimed.
Specifically, a claim directed to an article of
manufacture comprising a computer-useable medium
and a plurality of computer-readable program code
means for causing a computer to effect a plurality
of specific and interrelated functions should be
eligible for patenting under the statute. Such an
article of manufacture constitutes a machine part
that is commercialized separately.  It should be
protectable separately, like other machine parts,
if it meets the statutory tests of novelty and
non-obviousness.
In summary, the patent system is designed to
instigate the invention of new non-obvious, and
useful functions that add to the arts.  The key to
seeing whether the system is working is to see if
there is strong competition in the marketplace; to
see if new products are introduced to the market
on a regular basis; to see if employers and
investors vote for the system with their
pocketbooks by funding new development work.  As
for my company, we rely heavily on the patent
system to protect our investment in new products.
And we are negatively impacted probably more than
others, by poorly examined patent applications.
Thus, we want the issuance of poorly examined
patents curtailed.  And that is clearly doable if
the PTO would invest in hiring and training the
best possible examiners as well as in the creation
of an adequate database of software prior art.
Testimony for
Intellectual Property Owners Association
Regarding Public Hearings On Standards and
Practices Used in Examination of Patent
Applications For Software Related Inventions
Marriott Crystal Forum
Arlington, Virginia
February 10, 1994
By Stephen L. Noe
Intellectual Property Counsel
Caterpillar Inc.
Peoria, Illinois
Statement of Interest
Intellectual Property Owners (IPO) is a non-profit
association with offices at 1255 Twenty-third
Street, N.W., Washington, DC.  The association's
members include companies, universities, and
individuals who own and are interested in
intellectual properties of all types, including
patents.  My testimony has been approved by the
Board of Directors of IPO for presentation as an
IPO position.
Caterpillar is a member organization of the IPO,
as well as an interested party in its own right.
Caterpillar, the world's foremost manufacturer of
earthmoving and related equipment, is both a
producer and major user of computer software and
software related technology.
Introductory Comments
Today's hearing presupposes the continued
availability of patent protection for computer
software implemented inventions, a position
strongly endorsed by the IPO, and focuses on the
examination of such patent applications.  However,
implicit in this series of hearings is the
suggestion that software is somehow "different"
from other technologies, and must be treated in
some special way.  I disagree.
Considering some of the remarks made at the recent
hearings in San Jose, just agreeing on what is and
what is not "software related technology" may be
an Alice in Wonderland exercise in which a word
means "just what I choose it to mean--nothing more
nor less."11  For purposes of my testimony today I
will use "software" or "software related
technology" in a broad sense to include discrete
software products like word processors,
spreadsheets, and databases; highly complex custom
software that controls manufacturing systems, CT
scanners, and space shuttles; and embedded
software that controls engines, anti-lock braking
systems, and microwave ovens.  One can readily
come up with other examples, some of which may
look and feel more or less like software than
others, but all of which lie along a continuum of
software related technology.
Used in this broad sense, software related
technology encompasses far more than the products
of traditional software publishers, and includes
most consumer and industrial products susceptible
of electronic control.  Software properly takes
its place along side other evolutionary tools,
such as hydraulic, electrical, and electronic
control systems. Whether an automobile engine is
controlled by a camshaft or a microprocessor is of
little import to the driver so long as the engine
runs well and reliably.  Patent policy should not
be the factor that forces a manufacturer to choose
which tool to use to control the engine.
In short, the IPO supports treating software
related technology like any other technology
within the scope of the patent system.  Continued
patent protection of software related technology
is important to United States industrial
competitiveness, benefitting companies and
inventors working on program controlled apparatus
large and small, as well as developers of discrete
software applications.  The PTO should process
applications for patents on software related
technology no differently than applications in any
other technology, either in the examination
procedures those applications are put through or
in the way the statutory tests for patentability
are applied.  In particular, the IPO rejects the
proposal that software related patent applications
should be subject to special tests or standards
governing novelty, non-obviousness, or disclosure.
With that preface I will address the specific
questions posed in the Notice for these hearings.
Questions B.1 and B.2 - Are patents and printed
publications sufficient to assess novelty,
obviousness, and ordinary level of skill?  How can
prior art collections be improved?12
There is a quantitative and qualitative difference
between the PTO's collection of prior art relating
to software and its collections for other
technologies.   Many witnesses have testified to
this, and to the resulting difficulty examiners
face in locating the best prior art references to
cite against software related claims.  Respondents
to the Advisory Commission on Patent Law Reform
"suggested that a large amount of non-patent prior
art exists in forms that are not accessible to the
patent examiners."13
Patents, and more significantly printed
publications, do provide a sufficient and
representative collection of prior art to assess
novelty and obviousness of software related
inventions.  Examiners' access to the printed
publications is the issue, not the existence of
those publications.  To locate the prior art
references most relevant to a particular
invention, examiners and practitioners alike must
search far afield from the PTO's collections--in
textbooks, technical journals, and software
manuals, in narrowly published conference
proceedings, and in the online databases that
catalog such references.
Several avenues are available to and should be
used by the PTO to improve its access to and
ability to apply software related prior art.
These include:
_	Supplementing its own collections with non-
patent references;
_	Reclassifying and computerizing those
collections as necessary;
_	Encouraging the development of readily
accessible prior art collections outside the
Office;14
_	Training its existing examiners in the
technical programming skills necessary to
understand and properly apply the prior art
references that they find; and
_	Hiring as fully qualified examiners, computer
scientists or others who are qualified and trained
in software technology.
All of these recommendations were contained in the
Advisory Commission Report of August, 1992.15  A
number of these activities are currently being
implemented in the PTO, and the IPO applauds and
encourages those efforts.  The remainder of the
Advisory Commission's recommendations in this area
should be implemented as well.
Finally, the level of ordinary skill in the art in
the field of "computer programming," as phrased in
question B.2, is perhaps too narrow an inquiry.
Regardless of the field, printed publications and
patents do accurately reflect the level of
ordinary skill in the software related
technologies.
Question B.3 - Should a "special duty" of
disclosure apply to applicants for software
related inventions?16
No.  Such a burden would be neither fair nor
workable.  Even knowing when the duty applies
would be difficult and subject to interpretation.
There is no bright line separating software
related inventions from other inventions; instead,
there is a continuum of software relatedness which
encompasses products of all descriptions.
Developers who implement their inventions using
software should not be penalized for doing so by
the patent system simply for administrative
convenience.  Instead, the PTO must improve the
examiners' skills and resources in locating and
applying the relevant art.
There is another problem with the idea of placing
a special duty on applicants in software related
applications.  If applicants will encounter some
special burden if they characterize their
inventions as software, then it is in their
interest to search for another characterization.
The resulting misdirection will only complicate
the Office's efforts to classify its software
related art collections and to assign applications
to the art unit with the most expertise in the
relevant technology.
Question B.4 - Do present novelty and obviousness
standards accurately reflect inventiveness in the
field of software?17
Yes, as long as they are applied with reference to
the full scope of the relevant prior art and with
an understanding of the level of ordinary skill in
the art at the time the invention was made.  The
problem is not with the statutory tests, but
rather with the application of the tests.
Question B.5 - Should implementing a known process
using a computer be patentable?18
Whether a software implementation of a known
process, technique, system, or method is
patentable should be determined by applying the
statutory tests of novelty and obviousness to the
claims presented.  There should be no hard and
fast rule, one way or the other.  Accurate
understanding of the level of ordinary skill in
the relevant art (be it the art of programming, or
the art in which that programming is applied)
combined with application of the most relevant
prior art references, will produce the correct
result.  There is no need to apply special tests
or standards to software related applications.
Question B.6 - How can the PTO change examination
procedures to assess novelty and obviousness of
software related technologies? Should applicants
be required to search, explain, and distinguish
the prior art?  Should applicants be required to
distinguish their invention apart from the
computer implementation?  Should the PTO apply a
lower standard of proof to software related
technology?19
Once again, there should be no special standards
or tests applied to, or duties imposed upon,
applicants in software related patent
applications.  Difficulties in examining software
related applications result from examiners
unfamiliar with the technology attempting to
examine applications using incomplete prior art
collections. These difficulties can and should be
corrected by supplementing the art collections and
improving the examining corps' software expertise.
The novelty and obviousness of software related
inventions should be assessed using the same
statutory tests as interpreted by the courts for
all other technologies.  There should be no
special rules or formulae for application of those
tests to software related inventions--merely an
accurate assessment in light of the best prior art
references and the level of ordinary skill in the
relevant art at the time the invention was made.
Applicants for software related patents should not
be required to follow the special accelerated
examination practice.  A mandatory duty to search
for, disclose, and discuss prior art in software
related applications would be a powerful incentive
to characterize inventions as other than software
related in an attempt to avoid the burdens and
disadvantages of that duty.  Because of the
breadth of the software relatedness spectrum, that
burden could be applied to applications in almost
all significant technologies.  The advantages to
the examiner of requiring the applicant to prove
prima facie patentability instead of requiring the
examiner to prove prima facie unpatentability are
great, and examiners will naturally seek every
opportunity to characterize inventions as software
related.  Combined with applicants' strong
incentive to avoid such characterization, the
resulting game playing will merely exacerbate the
PTO's administrative problems.
The same analysis applies to the idea of requiring
applicants to prove novelty and obviousness "aside
from implementation. . .on a computer."  Examiners
will try to impose the requirement; applicants
will try to avoid it; and the quality of
examination and classification will suffer.
Nor should the examiners' difficulties in
assessing software implementations in the various
technologies be cured by eliminating from
consideration the implementation on the computer
and analyzing the remainder of the claim for
novelty and obviousness.  The examiners must do
the job required by the patent statutes, and
measure novelty and obviousness of the claimed
invention from the starting point of the level of
ordinary skill at the time the invention was made.
Anything less will distort the patent system's
incentive promoting innovation and disclosure.
The patent statute says that an applicant shall be
entitled to a patent unless the invention fails
certain tests including those of sections 102 and
103.  This places the initial burden on the PTO,
and requires that the examiner demonstrate prima
facie anticipation or obviousness before the
burden switches to the applicant to distinguish
the invention over the cited prior art references.
Permitting the examiner to use a standard of proof
lower than in other technologies effectively and
incorrectly places the initial burden on the
applicant.  The PTO must not implement rules or
procedures that change the statutory practice, but
instead must take the steps necessary to obtain
the ability to do the job that Congress has set
before it.
Other Access Issues - The Information Highway
One item of software related technology that the
PTO should follow closely and make early use of is
the National Information Infrastructure or High
Speed Data Highway. A major problem underlying the
difficulty in examining software related patent
applications is information related--the PTO does
not have sufficient access to the best prior art
information and the public has no convenient
access to the PTO search files.  The proposed Data
Highway could close this information gap,
providing a common resource to searchers both
within and outside of the PTO.  This technology
could even offer a cost effective way to implement
early publication of pending applications,
allowing interested parties to review applications
and provide relevant art. This approach would take
advantage of the knowledge of those most informed
in the field of software technology and most
concerned about the issuance of software related
patents.
Question B.7 - What is the most effective way to
describe software in patent applications?20
There is no "best" way to describe or depict
embodiments of software related inventions,
because of the breadth of software relatedness.
What may work well to describe an invention in
packet-switched digital telecommunications may not
be at all suited to describe the microcode and
processor controlling an innovative earth moving
machine.  Furthermore, what may be helpful to an
examiner preparing to search the prior art
relevant to a software related application may
well confuse the judge or jury trying the issue of
enablement of the resulting patent.
Current practice allows the applicant to choose
the combination of words and drawings that best
describes the embodiments of the claimed
invention.  That should be true regardless of the
technology involved.  The applicant knows the
invention, and should determine how to claim and
describe it within the general confines of the
statute.
Questions B.8-B.12 - What difficulties do
applicants face in complying with existing
disclosure requirements?  Should applicants be
required to conform to a standardized disclosure
format for software related applications?  How
should the submission of computer program code
listings be handled?21
The best mode requirement of US law used to be a
non-issue.  Best mode issues seldom arose in
patent contests.  However, recent judicial
opinions have caused quite a stir in this area,
and patent practitioners have responded as they
believe necessary to protect their clients'
property rights.  Some, in an abundance of
caution, feel the need to submit program source or
object code listings to satisfy the best mode
requirement.  Others believe that such listings
add nothing useful to the content of the
disclosure, and do not submit them.  Those who do
submit code listings today must choose between
submitting each page of listing as a sheet of
drawings (creating the "jumbo" and "super-jumbo"
specifications clogging the Office today), and
having the listings microfiched and submitted as
an appendix to the specification.  Each of these
alternatives is costly and time consuming.
The PTO cannot unilaterally resolve this matter;
resolution must await legislative or judicial
clarification.  However, the Office could begin
accepting code listings on standard machine-
readable recording media containing printable
files.  Such machine-readable listings could be
retained in the official file wrapper available
for public inspection in some manner, but should
not be routinely distributed with copies of the
issued patent--much as microfiche appendices are
handled today.  However, the Office should not
mandate the use of such machine-readable listings,
and should continue to accept microfiche and
drawings containing such listings.  Otherwise
those applicants awaiting definitive application
of the best mode requirement to software related
inventions will have no assurance that their
efforts to comply with requirements will satisfy a
future judge or jury.  Given the opportunity to
submit machine-readable listings, I expect few
applicants will spend the time and money to
prepare and submit drawings or microfiche.
Aside from the acceptance of machine-readable
program listings, the rules governing drawings in
patent applications need no change.  Flowcharts,
block diagrams, timing diagrams, pseudocode and
the like are all acceptable today, and applicants
can choose the formats they believe best disclose
and describe the preferred embodiments of their
inventions.
The PTO should not require patent applicants to
conform to a standardized disclosure format for
such applications.  No one format can be the
"best" for all of the wide range of software
related technology.  What would simplify
examination in the Office might well complicate
others' understanding of the resulting patent.
Concluding Remarks
The issues commented on here today are important
ones for all of American industry, because
software permeates every facet of technology.
Industry needs the assurance of patent protection
for innovative developments--software related or
otherwise--to maintain and improve technological
leadership into the twenty-first century.
Software related technology is not inherently
different from any other new technology that the
patent system has faced and adapted to in the past
and will be called upon to deal with in the
future.  The problem that exists today lies not
with the technology, but with the initial PTO
refusal to meet it head on--the PTO resisted until
the courts insisted.  Had the patent system and
the technology grown side-by-side, as is the usual
case, there would be no hearing today.
Now the PTO is a bit behind the curve, but
progress is being made.  This is the time to
accelerate, support, and encourage adaptation to
the technology, not to make a special case of it.
Who can say what the next generation of innovation
will bring, i.e., what will be the "software"
issue of the future.  With appropriate training,
tools, and hiring practices, the PTO can examine
software related applications just as capably as
anything else, and the patent law can remain
technology neutral, as it must.
The Intellectual Property Owners oppose
discrimination against patenting software related
technology, and support the treatment of such
patent applications in accordance with the well
developed body of law relating to other
technologies.
Testimony before the Commissioner of
Patents and Trademarks
10 February 1994, Crystal City, Virginia
Presented by
Robert Lippincott, Vice President, Content,
Ziff-Davis Interactive and Executive Vice
President, Interactive Multimedia
Association
Good morning, Mr. Commissioner, distinguished
members of the panel, ladies and gentlemen, my
name is Rob Lippincott. I am Vice President for
Content  at Ziff-Davis Interactive, an online
information services and multimedia publisher. I
also serve as Executive Vice President of the
Interactive Multimedia Association.  The
Association's general counsel, Brian Kahin, who
also directs our Intellectual Property Project, is
with me to help answer any questions you may have.
As a traditional magazine and newsletter
publisher, Ziff-Davis has built a  business on the
value added by the work of editors and writers
doing research,  selecting, highlighting, and
linking information, by aggregating rights, by
creating original material,  and by expressing the
opinions they believe will influence the market,
change  the flow of business,  or touch human
souls.  As multimedia information publishers, we
have come to  view interactivity as perhaps the
fundamental principle of the new media. It is how
editors and developers use computers to speak to
people; it is how people use computers to get the
information they  need; it is how  people speak to
other people through computers. Most importantly,
it is how communities grow and  how markets are
formed. Interactivity per se cannot be considered
to be a patented process, it is simply how we
communicate. It is this perspective which I
believe is shared by the majority of my fellow IMA
members and it is from that perspective that I
offer the following testimony.
The Interactive Multimedia Association is a U.S.-
based trade association with more than 280 member
companies and organizations representing all areas
of the multimedia industry. Its mission is to
promote the development of interactive multimedia
applications and reduce the barriers to the
widespread use of multimedia technology.
Multimedia draws on traditional content industries
(movies, television, music, publishing), which
have been powerful export industries for the
United States.  These are creative industries
which have functioned very effectively and
comfortably to date.  As my colleague, Tom Lopez,
testified in San Jose, a number of the creative
people in our emerging industry feel threatened by
abstract process patents that they believe give
patentees leverage over content developers and
publishers.
Our concern is not software patents in general but
patents that constrain and control human
expression and the flow of information.  Under the
European Patent Convention, patents are not
granted for "schemes, rules and methods for
performing mental acts, playing games or doing
business; programs for computers; [or]
presentations of information."  While we have
similar judicially created exceptions in our law,
in certain instances they have been eroded if not
eliminated.  The result is that we have a patent
system that has in certain instances been
stretched (beyond its resources and capabilities
some argue) to regulate abstract functions.
From the perspective of a number of our members,
multimedia developers and producers, the patent
system is a one-size-fits-all system for creating
property rights that is indifferent to its impact
on the industries it regulates, directly and
indirectly.  Software is treated the same as
chemical compounds, but has persistent problems in
the examination process.
Broad patents, especially patents that preempt
functions that cannot be designed around, should
not be granted without an extraordinary level of
quality control, preferably in the form of peer
review, as has been suggested by others in earlier
testimony.  Whatever the practical limitations on
the knowledge and experience of examiners, they
ought to be able to identify such broad claims and
route the applications accordingly.  Broad patents
are inherently regulatory in nature. It is
imperative that the claims be precise and that the
examination be thorough. Such patents must be
widely acknowledged and respected within the
fields and industries they affect.
Pre-grant publication, for both broad and narrow
patents, is an absolute necessity in the software
area because the patent database is so limited.
In Europe, Japan, and virtually everywhere else in
the world, patent applications are published
before the patent is granted.  Many of the patents
that trouble the multimedia industry because of
their breadth would never stand up to pre-grant
publication.
In 1966, the President's Commission on the Patent
System recommended against granting patents for
computer programs for practical reasons:
"The Patent Office now cannot examine applications
for  programs because of the lack of a
classification scheme and the requisite search
files.  Even if these were available, reliable
searches would not be feasible or economic because
of the tremendous volume of prior art being
generated."
28 years later, and an important 28 years in the
growth of our industry, the situation remains the
same, because the search  files have never been
completely developed and the volume of prior art
has, naturally, grown exponentially.  However, the
USPTO began to grant patents on software processes
liberally without addressing the practical
problems. Pre-grant publication is an alternative
which could, in due course, elicit sufficient
prior art to make such a database feasible.
Furthermore, we have the beginnings of an
information infrastructure that can make pre-grant
publication inexpensive and effective.  The patent
system should be an integral part of this
infrastructure.
The problems of subject matter and problems of the
examination process tend to go hand in hand.
While we applaud the fact that last month the PTO
finally began hiring examiners with degrees in
computer science, this did not happen until 12
years after the PTO liberalized its policy on
software.  With the PTO granting patents on
multimedia designs, business methods, and
educational methods, by rights it should admit
MBAs and Masters in instructional design as patent
examiners.  Given the past experience, we would
not expect this to happen anytime soon.  But the
notion [suggested in question 2.] that an examiner
trained in electrical engineering can deduce the
level of ordinary skill in these "arts" from
reading a few journal articles and patents is
clearly unsupportable.  The relevant "art" or
"arts" should be identified by applicant, the
examiners should be identified with the cited
arts, and their final signature should affirm that
they are skilled in those arts .   There are
number of other considerations we do not have time
to note here but will in writing.  We will do so
with the understanding that other industries may
feel differently about the operations of the
patent system.  Other industries may feel that the
opportunity to maintain trade secret protection
outweighs the need for a better examination
process.  We respect their views, because we feel
that system should be tailored to promote
innovation, not simply to validate preconceived
rights through the threat of exhorbitantly
expensive lawsuits.
As you, Mr. Commissioner, suggested in San Jose,
there is a dearth of economic analysis of the
patent system.  But there are costs that are real
and, for multimedia developers, frightening.
Stanford professor John Barton estimates the
average cost of patent litigation at $500,000 per
claim per side.  The cost of insuring against
inadvertent patent infringement (a minimum of
$50,000 per multimedia product, with a $50,000
deductible) is a marketplace measure of the tax
that the patent system places on our industry.
This figure is likely to be five to ten times the
cost of conventional errors and omissions
insurance, which covers most other liabilities.
This figure is one benchmark that multimedia
developers will look to to gauge what the PTO and
the Administration do to protect expression in the
multimedia age.
Thank you, Mr. Commissioner, for this opportunity
to express  the concerns of multimedia developers
and publishers.
TESTIMONY OF DANIEL J. KLUTH
AT THE PUBLIC HEARINGS
BY THE U.S. DEPARTMENT OF COMMERCE
PATENT & TRADEMARK OFFICE
ON PATENT PROTECTION FOR SOFTWARE-RELATED
INVENTIONS
February 11, 1994
Marriot Crystal Forum, Arlington, VA.
Good morning ladies and gentlemen.  My name is
Daniel J. Kluth and I am a patent attorney with
Schwegman, Lundberg & Woessner, P.A. of
Minneapolis, Minnesota.  I am the chair of the
Software Protection Committee of the Minnesota
Intellectual Property Law Association and I am the
Chair of the Government Relations Committee of the
Minnesota Software Association.  Although I am the
chair of these two Committees, I must point out
that my remarks today do not have the complete
endorsement of these organizations.  I have polled
many of the members of these two organizations
and, specifically, the Software Protection
Committee, and I will try to convey the
impressions I received.
The USPTO has been kind enough to allow me some
extra time today to address both Topic B
(Standards and Practices used in Examination of
Patent Applications for Software Related
Inventions) and Topic C (Significance of and
Protection for Visual Aspects of Software Related
Inventions).  Thus, I will speak on both topics.
First, Topic B.  In reviewing the testimony given
in the San Jose hearing last month, many concerns
were voiced about the quality of the examination
process and the issuance of seemingly overbroad
and invalid software patents.  I won't belabor
that point.  I would like to point out, however,
that I believe establishing new rules in the CFR
or new or special procedures in the MPEP for
software inventions would be wrong.  Software
patent applicants should stand on the same footing
as any other technology groups or classes.  I do
not believe there is any basis in the current
statutes which would allow special burdens to be
placed on software applicants.  The first
insurmountable barrier would be how to decide if a
patent application is a "software" patent.
Because there already has been so much comment in
this area, I thought I would focus on questions 7-
12 of Topic B.  This set of questions deals with
the problem of effectively and meaningfully
disclosing software-related inventions.
A patent application must teach one skilled in the
art how to make and use the invention (enablement)
and the best mode in which an invention may be
practiced.  Failure to disclose the invention and
teach the best mode robs the public of its part of
the bargain in the patent system.
In many instances, the application is filed with a
source code appendix in accordance with 37 CFR
Section 1.96, either in paper form or on
microfiche.  This is one of the few rules
promulgated by the USPTO which provides special
consideration to a technology class: namely
software.
As an aside, I would like to point out that a lot
of the testimony presented in January and
yesterday was directed to areas outside of the
control of the USPTO.  Many comments, if acted
upon, would require changes to statutes and in one
or two extreme cases, an amendment to the
Constitution.  But improving the quality of
examination of software patents is very much in
the sphere of authority of the Patent Office and
in some cases, can be done without rule changes.
Simple refinements in procedure and using existing
statutes and rules will suffice.  This is
particularly true in the area of disclosures.  The
source code appendix has proven in many instances
to be a burden on the USPTO and does not appear to
provide the applicant with a better patent
application.  I suggest that we eliminate Rule 96
and place the burden on the applicant to do a
better job in explaining the software operation in
the body of the specification.
Many patent applicants provide the source code in
a patent application as a "backstop" to their
application to satisfy both the best mode and the
enablement requirements.  I will first discuss
enablement.
Applicants hope that they can overcome an
enablement rejection from the USPTO on their
software patent application by relying on the
source code to overcome the rejection.  This
reliance actually works against the public
interest in permitting lax disclosures or poorly
written disclosures in the body of the
specification.  By eliminating Rule 96, the
applicants would be forced to do a better job of
describing their invention.
In many cases, Rule 96 encourages this poor
practice.  In many cases, the source code appendix
does not teach the public anything unless an
expert is hired to decode, decompile or flow chart
the appendix.  Unfortunately, Rule 96 has become a
de facto standard.  By itself, eliminating Rule 96
would return the earlier practice of submitting
source code listings in the body of the
specification.  This practice was a terrible
burden on the public and the USPTO in creating
many jumbo patent applications.  But this practice
should never have been allowed to flourish since
it violates the requirements under 35 USC Section
112 which requires that the applicant describe the
invention in clear and concise terms.  Patent
applications filed with the source code embodiment
in the specification should be rejected as not
being concise and the rules allowing substitute
specifications be invoked to clean up the
application.  This procedure would be still useful
in the case of rush-filed applications, especially
if the U.S. adopts a first-to-file system.
Applicants who file source code listings [only if
necessary] in the body of the specification would
be required to follow up with a concise substitute
specification. Source code listings are also
submitted to satisfy the best mode requirement.
But best mode is an objective standard which can
rarely be tested in the USPTO examination process.
This determination is made during litigation and
is assisted by the discovery practice to determine
the inventor's state of mind and to determine if
the best mode was suppressed or concealed.  In all
other technology areas for patents, the best mode
for practicing the invention is a comparison of
the specification to information obtained during
discovery.  Software patents should be treated the
same as other technology areas and the
specification should stand alone without reliance
on a source code appendix.
Allowing for and even encouraging the submission
of source code listings also hurts the public by
discouraging some applicants from filing software
patent applications for fear of losing trade
secret protection for the non-patentable aspects
of the software disclosed in the source code
appendix.  In short, source code listings are
similar to the submission of a model of the
invention which is no longer required or even
allowed.  Eliminating Rule 96 is consistent with
my position that no special burdens or rules be
carved out for software-related technology or
patent applications.
Once the source code is gone, how best to describe
software?  Question 9 asks the question in effect
"Should the PTO require a standardized disclosure
format for software patent applications?" Patent
applicants already are granted a broad range of
disclosure options in all other technology
classes.  Requiring a standard submission format
would place a heavy burden on the application
since different software is best described in
different ways.  In many cases, high level pseudo-
code is more descriptive than flow charts.  State
diagrams are often better for sequential operation
descriptions.  All these forms should still be
allowed. It is true that many players in the
software industry have complained about the
readability of the patent applications.  But the
existing drawing requirements in the CFR require
that the claimed invention be shown in a drawing
(with some limited exceptions).  This rule should
be used by examiners to improve the disclosures
and allow the submission of drawings taken from
the description in the specification..
Another existing rule which is used very little in
my experience is the discretionary authority of
Examiners to require that the Abstract and the
Summary of the Invention sections of the patent
application be amended to reflect the allowed
claims.  The use of this tool by the Patent Office
may work to improve the readability of many
software patents thereby diffusing much unfounded
criticism of overbroad software patents in the
software industry. And now I would like to address
my remarks to Topic C:  The Significance of and
Protection for Visual Aspects of Software- Related
Inventions.
I will not go into a lengthy history of the
development of this issue, but I have followed the
topic with great interest ever since the first
icon design patents issued to Xerox Corporation in
June of 1988.  In August of 1988, Steven Lundberg
and I published an article in the Computer Lawyer
entitled "Design Patents: A New Form of
Intellectual Property Protection for Computer
Software", which was later republished in the
JPOS.  This article and the ensuing interest in
the matter resulted in a single letter being
written to the Commissioner of Patents and
Trademarks opposing this form of protection.  I
learned through an FOIA request that other letters
were also received, but they were all supportive.
This led to a chain of events in which the pending
Xerox design patent applications were rejected
under 35 USC Section 171 and that those rejections
led to the Patent Office Board of Patent Appeals
and Interferences decision In re Strijland and
other decisions. The strict holding in the
Strijland decision was that the Xerox design
patent applications as originally filed did not
show an article of manufacture and, hence, were
deficient.  The later amendments to the
application to describe the icons for use on a
computer screen were rejected as new matter by the
Board. The Strijland decision went beyond the
holding to suggest that if Xerox had shown a
three-dimensional article of manufacture on which
the icon was displayed, this would be proper
subject matter under 35 USC Section 171 and the
article of manufacture was then a programmed
computer screen display.
To date, the Patent Office has not issued any
comments on the Strijland decision or the other
related cases.  The Patent Office is instead
suspending all prosecution of these cases even if
they comply with the Strijland requirements.
My position is that the Strijland decision was
correct in stating that the application as
originally filed did not disclose an article of
manufacture if you adopt their position that the
word ICON is not limited to the computer field.
If an application for an icon or a screen display
properly describes the article of manufacture in
the title or description as being software for a
programmed computer screen display, I believe this
is enough to pass muster under 35 USC Section 171.
This leads me to my second point which is that the
Board misconstrued what is the article of
manufacture.  I contend that the article of
manufacture is the software, not the programmed
screen display.  This is consistent with the test
for infringement for a design patent which as
stated in the Supreme Court case of Gorham v.
White reads:
"If in the eye of the ordinary observer, giving
such attention as a purchaser usually gives, two
designs are substantially the same, if the
resemblance is such as to deceive such an
observer, inducing him to purchase one supposing
it to be the other, the first one patented is
infringed by the other".
So, like in the trademark infringement test,
inducement of an ordinary purchaser is key.
The point is that an ordinary purchaser of
software would not be induced to purchase one
computer thinking it to be another.  The purchaser
would confuse the software.  This clarity of
definition of the article of manufacture
harmonizes the infringement test with the other
issue in the Strijland decision: namely - the
dicta which required future cases to show a three-
dimensional computer screen adorned by the icon.
This is not necessary since the article of
manufacture, the software, defies a three-
dimensional drawing. The drawing requirements of
37 CFR are not rigid in their requirement of a
three-dimensional object and the statute, 35 USC
Section 171, does not require it.  The Patent
Office has not required it in type font design
patents, game board design patents and watch
faces, to name a few.  To require three-
dimensional drawings for icon or screen display
design patent application is setting an extra
burden for these cases which is unjustified.   In
summary, I believe that the holding in the
Strijland decision can be satisfied by describing
the icon designs as for display on a screen
display of a programmed computer.  I do not
believe the dicta of the Strijland decision need
be followed since three- dimensional drawings are
not required, and I believe that the article of
manufacture is the software.
Finally, I have detected very little concern in
the software industry for the issuance of design
patents for screen displays.  35 USC Section 171
should not be used as a gatekeeper in this regard
since the requirements of novelty and non-
obviousness under 35 USC Sections 102 and 103 will
ferret out designs that are not worthy of
protection.
Thank you,
Daniel J. Kluth
RONALD S. LAURIE
Direct Line: (415) 926-6210/Internet:
rsl@applelink.apple.com
WEIL, GOTSHAL & MANGES
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
SILICON VALLEY OFFICE
2882 SAND HILL ROAD, SUITE 280
MENLO PARK, CA  94015-7022
TEL: (415) 926-6200
FAX: (415) 854-3713
DALLAS/HOUSTON/MIAMI/NEW YORK/WASHINGTON
D.C./BRUSSELS/BUDAPEST/LONDON/PRAGUE/WARSAW
January 21, 1994
Via Facsimile & Express Mail
Commissioner of Patents and Trademarks
U.S. Patent and Trademark Office, Box 4
Washington, DC  20231
Attention: Jeff Kushan
re: PTO Inquiry on Patent Protection for Software-
Related Inventions
    Docket No. 931222-3322
Dear Mr. Kushan:
Responsive to the Notice of Public Hearings and
Request for Comments concerning the above subject
which appeared in the December 20, 1993 issue of
the Federal Register, I respectfully request the
opportunity to present some brief oral remarks at
the hearing to be held in San Jose, California on
January 26-27, 1994.  I would like to address the
issue of patent protection for software-related
inventions generally rather than the specific
questions raised in the Notice.  The views
expressed herein are my own and do not necessarily
represent the position of my law firm or any
particular client thereof.
By way of introduction, I have worked in Silicon
Valley for thirty three years, initially as a
programmer and software designer and later as a
patent lawyer focusing on computer technology.  I
currently teach a course at Stanford Law School
titled, Intellectual Property Protection for
Information Technologies.  I have previously
served on advisory panels to the National Research
Council and the National Academy of Science in
connection with software protection. I was the
only patent lawyer on the advisory panel to the
Office of Technology Assessment in its recent
study of the subject.
When one listens carefully to the impassioned
arguments against patenting software, it becomes
apparent that the arguments, and the basic
intellectual property policy positions which
underlie them, can be classified into three
categories: (a) patents are bad;  (b) software
patents are bad; and (c) bad software patents
are bad.  The first position is most often heard
in the halls of academia and raises fundamental
social and economic issues which go far beyond the
scope of the present inquiry.  The second position
is often advanced by some, though not by any
measure all, of the software companies that
emerged and flourished during the early and mid
eighties as a direct result of the commercial
introduction of the microprocessor, at a time when
the industry generally (and incorrectly) believed
that software-based inventions were unpatentable
as a class.  The third position is the one most
widely held today, and for obvious reasons, the
easiest to defend.  In the heat of the debate over
software patents the boundary between the second
and third positions tends to blur, but it is
important to address them separately.  I
respectfully submit that the second position is
legally unsound and that the third, while correct,
does not represent an insoluble problem.
In support of my thesis, I offer the following
five premises:
Premise One.
U.S. patent law does not protect software.
Rather, it protects processes and machines that
are within the technological arts.  In one of
the first cases to consider the question of
whether inventions involving computer programs
constituted patentable subject matter, Judge Giles
Rich (one of the principal architects of the
current patent statute) introduced the phrase
technological arts, as the modern equivalent of
the Constitutional term useful arts, and as
therefore defining the outer boundaries of
patentable subject matter both under the
Constitution and under Section 101 of the Patent
Act,
	All that is necessary, in our view, to make a
sequence of operational steps a statutory
process within 35 USC 101 is that it be in
the technological arts, so as to be in
consonance with the Constitutional purpose to
promote the progress of useful arts.
	(In re Musgrave, 167 USPQ 280, CCPA 1970;
emphasis added.)
Over the more than two decades since Musgrave,
Judge Richs formulation has remained unchallenged
by any subsequent decision -- although,
unfortunately, it has been ignored by many.
Thus, any process that is not sufficiently applied
to the physical environment in which it operates
to qualify as being within the technological
arts represents unpatentable subject matter.  The
critical distinction is between applied technology
and abstract ideas.  Examples of the latter
include laws of nature, scientific principles,
methods of doing business, printed matter and
unapplied mathematical relationships.
Premise Two.
Computer-implemented solutions to technological
problems - in the form of processes and/or
machines - typically exist along a design spectrum
ranging from pure hardware (i.e., random logic) to
pure software (i.e., an externally loaded computer
program running on a general purpose digital
computer).  Intermediate points along the spectrum
involve designs which may described as special
purpose computers and which combine elements of
hardware and software in varying proportions using
random logic, array logic (such as PLAs and PALs),
microcode and firmware (fixed programs stored in
internal read-only memory).  The particular point
along the design spectrum that represents the
optimum solution to a given problem is determined
by a variety of factors such as cost, speed, size,
flexibility and so on.  Moreover, the optimum
design point moves over time as competing
implementation technologies evolve at different
rates.  For example, in the mid seventies, complex
video game functionality was implemented entirely
in random logic; after the arrival of the
microprocessor, the very same functionality was
realized using firmware.  Finally, technologies
such as logic synthesis are becoming available by
which a software solution can be translated into
an equivalent hardware solution, and vice versa.
It should be self evident that, as a matter of
legal policy, the law should not promote
artificial distinctions that the technology does
not recognize.
Premise Three.
The fact that a particular solution can be
expressed mathematically, or as a series of
logical operations, should be irrelevant to the
patentability of the solution.  In 1972, based on
what many commentators believe to be an erroneous
interpretation of its prior decisions involving
laws of nature and scientific principles, the U.S.
Supreme Court announced in Benson v. Gottschalk
that a patent claim describing a process which
wholly preempts a mathematical algorithm is non-
statutory, i.e., does not define patentable
subject matter under Section 101 of the Patent
Act. The result of this formulation has been over
two decades of confusion and inconsistency in the
case law involving the patentability of software-
implemented or assisted processes.  The fact is
that mathematics is a language, albeit a very
precise one, and like other languages can be used
to describe concepts and relationships that are
technologically applied as well as those of a more
abstract nature that are not so applied.  (As
noted by Professor Chisum, the real issue is not
one of subject matter under Section 101, but
rather one of indefinite claiming of the invention
under section 112.)  Under the Constitutional
standard (within the technological arts), it is
the subject matter of the invention and not the
language chosen to describe it, that should
determine the presence or absence of patentable
subject matter.
Premise Four.
Even if a particular software-implemented solution
represents patentable subject matter (see Premises
One through Three), in order to justify the
exclusionary benefits conferred by a patent, it
must also pass the tests of novelty and
nonobviousness over the prior art.  This is the
key factor that interrelates the second and third
Positions discussed above, i.e., software patents
are bad versus bad software patents are bad.  That
is, even if a software-implemented solution is
sufficiently technologically applied to pass
muster under the statutory subject matter test, in
order to qualify for patent protection the
solution must also be novel and not obvious to a
person of ordinary skill in the art to which the
invention pertains.  (It is submitted that, given
the objective to be accomplished and accepted
principles of software design, most of the
software written today would not pass the
nonobvious test.)  Thus, the effectiveness of the
patent system in a particular area of technology
is directly related to the degree to which the
examining authority, in this case the U.S. Patent
& Trademark Office, has access to the most
relevant prior art.  To the extent that there are,
or can be created, mechanisms through which the
PTO can access the widest body of software-related
prior art, the system will work.  A number of such
mechanisms either exist or are being discussed.
These include: PTO access to the growing number of
commercial and public databases of software
technology, private sector assistance in
supplementing the PTO internal database, early
publication of patent applications coupled with
submission of prior art by individuals, companies
or industry groups, and institution of
reexamination proceedings by third parties or by
the PTO.  The important point here is that the
problem of bad software patents is mechanical and
not inherent.  That is, over time it can be
engineered away, or at least reduced to a
commercially tolerable error rate.
Premise Five.
A very heavy burden of persuasion should be placed
on anyone who advocates that a particular kind of
technology should be exempted from the normal
operation of the patent system.  In 1980, the U.S.
Supreme Court, in Diamond v. Chakrabarty,
interpreted the patent-copyright clause of the
U.S. Constitution to require that the scope of
patentable subject matter should be as broad as
possible (anything under the sun that is made by
man).  Those who maintain that software-based
inventions should be excluded, as a class, from
patent protection argue that, Software is
different.  Its different, they argue, in terms
of its essential character (its logical); its
different in terms of the creative process by
which it comes into being (its authored rather
than engineered); or, its different in terms of
the underlying economic model governing its
production, distribution and life cycle.  These
differences have been discussed and debated at
gatherings of distinguished software developers,
computer scientists, economists and legal scholars
and practitioners under the sponsorship of a
number of government agencies including the
National Research Council, the National Academy of
Science, the Office of Technology Assessment of
the U.S. Congress, and the U.S. Patent & Trademark
Office.  Despite the fact that the positions on
both sides have been eloquently expressed, the
results are inconclusive.  The primary reason is
that there is no hard data available to support
the anti-software patent position and the evidence
is anecdotal at best.  Clearly, software is
different; but is it different enough from all
other technologies to justify a special exemption
from the operation of the patent laws?  Given the
unavailability of reliable data on the societal
costs and benefits of patenting software-
implemented technology, we are presented with a
situation where important policy decisions must be
based on fundamental legal principles.  In such a
setting, we must conclude that those who would
withhold patent protection from technologically-
applied processes and machines that happen to be
implemented partially or wholly in software, have
failed to satisfy the burden that the
Constitution, the Supreme Court, and sound legal
policy principles have placed upon them.
Thank you for providing the opportunity to present
these remarks.
		Very truly yours,
		Ronald S. Laurie
PTO HEARINGS ON PATENTABILITY OF SOFTWARE-
RELATED INVENTIONS
Testimony of Allen M. Lo
	Good morning.  My name is Allen Lo.  I worked
as an examiner in Group 2300 for two and a half
years, examining patent applications involving
computer control systems, computer aided product
manufacturing, and error correction and detection
systems.  Last March, I left the PTO to work for
the law firm of Finnegan, Henderson, Farabow,
Garrett and Dunner, where I currently prosecute
and write patent applications, many of which
involve software-related inventions.  I also
currently attend the Georgetown University Law
Center as a third-year evening student.  Today, I
am speaking on my own behalf.  The views that I
will express are my own and do not reflect the
views of the firm or its clients.
	Mr. Commissioner, I would like to address two
different matters this morning.  First, I would
like to speak on Group 2300's policy regarding the
patentability of claims drawn to software stored
on a disk.  Second, I would like to make a few
comments about what the PTO can do to improve the
quality of examination.
	Beginning with the first issue, it has been
the policy of Group 2300 that claims drawn to
software stored on a disk are per se unpatentable.
During the examination of an application involving
a software-related invention, examiners in Group
2300 place the claims into one of two groups:
implemented and non-implemented computer software.
Implemented computer software generally refers to
computer software which is claimed as being
executed on a computer, and is treated by Group
2300 as being patentable, subject to the novelty
and nonobvious requirements.  For example, a claim
reciting a general-purpose computer running a
novel and nonobvious computer program is treated
as being a new machine and, thus, would be
allowed.
	In contrast, non-implemented computer
software refers to computer software that is not
being executed on a computer, in other words, a
static program.  Claims reciting non-implemented
computer software may be directed either to the
computer program itself, such as "a computer
program comprising" followed by source code or
means-plus-function, or to software stored on a
disk, such as "computer-readable medium storing a
computer program, comprising," followed by source
code or mean-plus-function.  Group 2300 views
claims directed to non-implemented computer
software as being per se unpatentable.
	I would like to focus my comments on one type
of non-implemented software claim, that is, a
claim reciting a disk storing a computer program
claimed in terms of means for performing FUNCTION
A, means for performing FUNCTION B, etc.
Examiners in Group 2300 are trained to reject this
type of claim under 35 U.S.C.  101, 102, 103,
and 112 first and second paragraphs.  These
rejections can be simplified and generally
classified into 3 categories.  First, the claim is
rejected under 35 U.S.C.  101 as being directed
to printed matter.  Second, the claim is rejected
under 35 U.S.C.  102 and 103 over a prior art
disk by effectively reading out any specific
recitations in the claims directed to a computer
program and concluding either that the claims are
anticipated by a prior art disk or that storing
any type of data on a prior art disk would have
been obvious.  And third, the claim is rejected
under 35 U.S.C.  112, first and second
paragraphs, because the disk itself is unable to
perform the claimed functions, but requires a
computer to be claimed to perform the recited
functions.
	I believe that these rejections are either
unsupportable under the case law or can be avoided
by careful claim drafting.  With respect to the
printed matter rejection, the claim does not
attempt to claim the mere arrangement of words,
such as the program code, but rather the claim is
specifically directed to the functionality that is
provided by the computer program and, thus, the
claim does not contain printed matter.  Even if
the computer program can be analogized to printed
matter, the case law provides an exception to the
printed matter rule where there is a functional
relationship between the printed matter and the
medium which the printed matter is on.  In the
case of a computer program stored on a disk, the
computer program transforms the disk into a new
disk the same way that a computer program running
on a computer transforms the computer into a new
machine.
	With respect to the rejections over a prior
art disk, it is simply improper for the PTO to
ignore any recitations in the claim, particularly,
in this case, where the computer program is
claimed in means-plus-function language.  Finally,
with respect to the rejections based on the disk
being unable to provide the claimed functions, the
claim can be drafted to more specifically and
particularly claim the actual function that is
performed by the disk.22  For example, the claim
can be drafted to read "a disk storing a computer
program, comprising: means for instructing a
processor to perform FUNCTION A . . ."
	It should be noted that claiming software on
a disk is not merely a trivial exercise in claim
drafting.  Patentees have an interest in obtaining
claims drawn to software stored on a disk.  By
disallowing these types of claims, patentees must
obtain patents with claims drawn to software
running on a computer.  When a patentee seek to
enforce his patent, manufacturers and sellers of
infringing software would not be liable for direct
infringement to the patentee as long as they are
not running the software on a computer.  Instead,
the users of the infringing software, usually the
customers, would actually be the ones to directly
infringe the claims.  Manufacturers and sellers of
infringing software would only be liable to the
patentee under cumbersome theories of contributory
infringement and inducement of infringement,
requiring the patentee to prove additional
elements, including knowledge and intent.
	Whether or not the PTO changes its policy
toward non-implemented computer software, it is
important that the PTO at least publish in the
Official Gazette clear guidelines and rules
defining the types of software claims which the
PTO considers to be acceptable.
	Now, turning to the matter of improving the
quality of examination, I would like to make the
following observations and suggestions.  First, as
others have suggested, examiners in Group 2300
need to receive more legal and technical training.
Many of the examiners who attend law school
eventually end up leaving the PTO to accept more
lucrative positions in private practice, resulting
in fewer and fewer examiners with legal training.
I would recommend that more in-house legal courses
teaching basis legal skills, such as legal
research and writing, be offered to those
examiners who don't attend law school.  Further,
examiners should be invited and encouraged to
attend meetings and lectures related to software
patenting, such as today's hearings, so that they
can better understand the "big picture" and
appreciate the issues that they face during
examination.
	Further, more technical courses need to be
offered to increase the level of technical
understanding within the group.  It is difficult
for an examiner to appreciate the advantages and
benefits of an invention if the examiner is unable
to understand what the invention is.
	And, as Dave Clark pointed out earlier, the
training of examiners is undermined if the PTO is
unable to retain its examiners.  My experience has
been that examiners leave the PTO for various
reasons.  Certainly, many examiners are lured from
the PTO by the higher salaries offered by patent
law firms.  This problem can be somewhat
alleviated by raising salaries in groups with high
turnover rates, such as Group 2300.  However, I
believe that some examiners, myself included,
leave the PTO because they feel that the examining
function is no longer stimulating or challenging.
Finding solutions for retaining these people may
be difficult, but I believe that the Examiner
Enrichment Program which the Commissioner
mentioned in his opening remarks yesterday is a
definite step in the right direction.
	Finally, there is a natural tension between
the count system and the quality of examination.
While the count system is a necessary evil, I
submit that the quality of examination can never
really be appreciably increased without a
reassessment of the number of hours that examiners
are allotted to work on each case.
	Thank you for allowing me this opportunity to
testify.
APPENDIX-- PROPOSED ACCEPTABLE FORMATS FOR CLAIMS
DRAWN TO NON-IMPLEMENTED COMPUTER SOFTWARE
1.	A computer-readable medium storing a computer
program, comprising:
		means for instructing a processor to
FUNCTION A
		means for instructing a processor to
FUNCTION B; and
		means for instructing a processor to
FUNCTION C.
2.	A computer-readable medium storing a computer
program, the computer program comprising the
following modules:
		a module for FUNCTION A;
		a module for FUNCTION B; and
		a module for FUNCTION C.
3.	A computer-readable medium configured in a
manner as to be capable of instructing a computer
to perform the following steps:
		STEP A;
		STEP B; and
		STEP C.
MULTIMEDIA DEVELOPMENT GROUP (MDG)
2601 Mariposa Street, San Francisco, CA 94110 
Tel: 415/553-2300 Fax: 415/553-2403
January 27, 1994
Good morning, my name is Tim Boyle.  I am
speaking for the Multimedia Development Group
(MDG).  I am the Acting Executive Director of the
Group.
The Multimedia Development Group is a market
development oriented trade association based in
San Francisco.  Our members are primarily
interested in the "software" side of the
multimedia industry.  We represent over 400
companies in this industry: about 200 multimedia
developers and publishers; 50 technology
companies; 150 service providers: including
accounting, public relations, marketing firms, 25
law firms; we also represent 20 to 25 educational,
non-profit and governmental organizations.
Our mission is to help emerging multimedia
software companies become commercially viable by
facilitating communication between the parties who
develop, fund, service, sell or regulate
multimedia titles.
Thank you for providing this forum.  We appreciate
the fact that you are soliciting our opinions.
We would like to address three points today:
The first is the need to stimulate the creative
process, and the commercial structures that
support them, through an equitable code of
intellectual property
Second, the need for this code to meet the digital
challenge by distinguishing between patent-able
inventions and copyright-able creations
And finally, some suggestions for your
consideration, such as the possibly of
incorporating some of the precepts of academic
science in the work of the Patent & Trademark
Office (PTO), in particular Peer Review
The furor over Compton's New Media patent claim
comes from our community.  We note with pride that
Compton's New Media is a member of our
organization and wish to see their creations
appropriately protected.  The majority of our
members believe that the ideas at issue in that
claim are better protected by copyright rather
than a patent.  Compton's Multimedia Encyclopedia
is a very clever, and extremely innovative, use of
the new vocabulary of digital communication.  As
such it represents a unique and creative
arrangement of fundamental elements which
constitute the new vocabulary of the artist and
author in the digital age.  Graphical screen
elements (windows, buttons and such), search and
navigation methodologies and multiple views of
databases are part and parcel of this new
vocabulary.  It is their use in the expression and
representation of ideas that creates value and
this is the value our membership believe must be
protected.
We look to the PTO to identify, understand and
protect the fundamental concepts of this new
media.  These concepts properly belong in the
"public domain" because they are the alphabet, the
building blocks, of our new media.   The
multimedia developer community has a vested
interest in protecting their intellectual work
from unfair copying or infringement and to ensure
that the "concepts" on which they are based can be
freely exchanged.  We believe that one can only
properly assess the "patent-ability" of a work
after reviewing it in the context of all the work
which has gone before it.  This was a much more
simple task in the Industrial Age than it is, at
this point, in the Information Age.
How would theater have developed if the concept of
"plot" was owned by someone?  William Shakespeare
could never have afforded the licensing agreement.
It is the innovator, and society, who will suffer
if we fail to protect the "novel" or recognize the
"obvious" in this new media.
We suggest...
Opening up the patent application process.  The
current process has been characterized as
"secretive", we would like to see that
characterization change.
Peer Review.  In academic science a discovery is
accorded recognition only when it has passed the
test of Peer Review (remember cold fusion).  We
recognize that there are problems that open review
presence's for inventions with great commercial
potential.  The members of our industry have put
forward a number of proposals in this regard.  Our
organization endorses the general concept of Peer
Review as an important element in the evaluation
of software patent applications.
Building a definitive library of Prior Art.  The
MDG has published a call for "Prior Art" to be
housed at the law firm of Morrison & Foerster, to
the attention of Jim Shay.  We would like to offer
your office access to any and all materials we
receive.  We would like to establish an ongoing
relationship to ensure that your office has access
to any Prior Art it requires.
The Multimedia Development Group's purpose is to
represent the interests of the  multimedia
development community and to grow this industry.
We would like to extend our hand to assist you in
gaining access to, and understanding the needs of,
this community.
We want as strong a relationship with our Patent
Office as the one enjoyed by the metal fabricating
inventors of the Industrial Age.  That Patent
Office created the basis for the most explosive
economic growth the world had ever seen.  This
Patent Office has the opportunity to dwarf that
achievement by creating the basis for a global
information economy.
The Evolving Telecommunications Infrastructure
Information Services and Entertainment
Good Afternoon President Fessler and members of
the commission.  My name is Tim Boyle, I am the
Director of the San Francisco - Multimedia
Development Group (SF-MDG).  Thank you for this
opportunity to talk to you about potential
information services and entertainment
possibilities in our evolving telecommunications
infrastructure.
I represent an industry which has hardly been
born.  One where employees are still learning,
still inventing, the terminology they will use to
communicate with each other.  An industry that did
not exist more than ten years ago and where most
of the companies have been building products for
less than two years.  I represent a technology
that is considered the next logical step in
computing, it is seen as the future of Hollywood,
and it is intregal to the strategic plans of every
telephone and cable television company in America.
I represent the multimedia industry, more
specifically companies involved in the content
creation side of this industry.
Multimedia is a difficult term to define, or, it
is a term with many definitions.   Among these are
...
	Multimedia is the convergence of  Television,
Computers, and Telecommunications.	it is the
combination of text, graphics, audio and video
delivered through a 	computer.
	 a process to communicate, inform, educate or
entertain under user control.
For instance, co-workers in different cities --
Los Angeles, Fresno and Eureka -- need to agree on
their departmental budget.   They need to share
their work, their spreadsheets and databases; they
need to discuss alternatives; and they need to
see what the other people are talking about.
Our present telecommunications system will let
them communicate to some degree by telephone,
fax machines and perhaps modems.  But , it will
happen over a relatively long period of time --
days or weeks -- and if they really want to be
effective they will probably have to meet in one
location to share information.
One variant of multimedia, video-conferencing with
data transfer, would allow these people to look at
each others computer programs, share background
information, try out different budgets, talk to
experts if they need to, run a point by the boss -
in real time or by electronic mail, in a word
communicate.  But this more comprehensive
conversation would take an hour.  The difference
between POTS and multimedia is in the richness of
the communication and the time required to
accomplish the task.
Multimedia informs...
Three hotels in San Francisco are offering access
to the city from their rooms.  By simply pressing
buttons on the TV set remote control, hotel guests
can obtain information about local museums, art
galleries, restaurants, shopping areas, daily
events, transportation -- plus electronic tours of
local neighborhoods.
You learn with multimedia...
A department store chain went to one of their
fabric suppliers and wanted to know why their
quality had gone UP so radically in the last 90
days.  The supplier tracked the change to an
interactive videodisc training program newly
required of their sewing machine operators.  The
operators were generally older women with lower
levels of print literacy, while they had received
traditional training the classes proved
ineffective.  These women finally understood how
to prevent the problem when they saw a graphic
showing their sewing machine needle in operation
and in slow motion.  They could speed up and slow
down the process and literally see the problem
happen.  Once they could see the problem, and go
back to see it happen again and again, they
learned how to avoid it.
Multimedia is entertainment...
Just ask the Nintendo generation.  There are
approximately 30 million younger adults in America
who have been raised on graphics, music and
interactivity.  We are not faced with evolutionary
adoption of this technology but with a
revolutionary expectation from the next
generation.  Sierra On-Line has a run-away hit
dial-up computer program where people, largely
younger people, can interact and play games over
the telephone lines.  The most severe limitation
on this game is that it has to run on POTS, which
is the pits.
The San Francisco - Multimedia Development Group
is a non-profit trade association whos mission is
to serve the businesses involved in the
multimedia creative process.   We have
approximately 175 member organizations, currently
-- 40% are multimedia developers, 35% are
professional service firms related to content
development, 15% are technology companies, 7% are
capital sources and 7% are content owners.  Our
membership includes game developers, corporate
training specialists, information kiosk makers,
teleconferencing software and hardware makers,
authoring software companies, video producers,
universities, and print publishers.  These are the
people inventing the products and services we
would like to send over the lines in the not too
distant future.
We appreciate the fact that you are soliciting our
input into our evolving infrastructure because an
infrastructure to support high speed data and
video services is of little value in itself.  I
quote from Frank Biondi, CEO of Viacom Cable in
the June 8th Financial World.  In the end, a pipe
is just a pipe.  The customer wont give a damn
how the information reaches him.  All that matters
is the message. It is our intention to create a
catalytic center to foster the development of
content, or messages as Mr. Biondi says.
What opportunities will accrue to Californians if
you plan for these multimedia products and
services in our evolving telecommunications
infrastructure?  The short answer is jobs.
Knowledge worker jobs in the thousands.  Jobs
producing the multimedia hardware and software for
export.  More importantly, jobs that employ the
multimedia process to assist Californians to
become more productive.  Jobs that allow people to
earn a good living.  Jobs that do not pollute.
Jobs that export goods, and services, to the rest
of the world.  Jobs that will make California the
capital of this new information age.
The multimedia uses I have described have been
invented by small companies, embryonic in some
cases.  We are at the beginning of our productive
lives, our situation is similar to the telephone,
movie, automotive or aerospace industries at the
turn of the last century.  These industries are
currently the basis of Californias economy but
when they started telephones were novelties,
movies were curiosities and the first airplane
flight was shorter than the wingspan of todays
jumbo jets.  With your leadership, we can create
an information economy and an export industry as
important to Californias tomorrow as these
industries are essential to California today.
Tim Boyle
Director
San Francisco - Multimedia Development Group (SF-
MDG)  415/553-2300
TESTIMONY OF RICK D. NYDEGGER23
Good morming Mr. Commissioner, distinguished
Members of the Panel and fellow participants.  My
name is Rick D. Nydegger.  I appreciate this
opportunity to participate in these proceedings
and to add my comments to the record of these
hearings.  I am appearing today on my own behalf
and the views which I express are my own.
I wish to first make a few introductory comments,
which I will then follow with specific comments in
response to the subject of this hearing, namely,
standards and practices used in examination of
patent applications for software-related
inventions.
Much has been written and said by way of criticism
about overly broad patents having been granted by
the PTO for software-related inventions.  However,
it should be remembered that these types of
problems are not unique to software-related
inventions, but have existed and will exist in
connection with any type of new and rapidly
emerging technology. Indeed, in the celebrated
Telegraph case24 that was decided by the Supreme
Court in 1854, the eighth claim in Samuel Morse's
patent on the telegraph was ultimately invalidated
as being overly broad, although granted initially
by the Patent Office.  However, equally important,
though often overlooked, is the fact that the
first seven claims in Morse's patent were upheld,
thus providing broad protection for a new
technology which spawned a whole new industry.
In similar fashion, in 1888 Alexander Graham
Bell's patent for the telephone was also
challenged as being overly broad.  Claim five of
Bell's patent was contained in a mere five lines
and simply read:
The method of, and apparatus for, transmitting
vocal or other sounds telegraphically, as herein
described, by causing electrical undulations,
similar in form to the vibrations of the air
accompanying the said vocal or other sounds,
substantially as set forth.25
Yet in upholding that claim, the Supreme Court
said:
It may be that electricity cannot be used at all
for the transmission of speech except in the way
Bell has discovered, and that therefore,
practically, his patent gives him its exclusive
use for that purpose, but that does not make his
claim one for the use of electricity distinct from
the particular process with which it is connected
in his patent.  It will, if true, show more
clearly the great importance of his discovery, but
it will not invalidate his patent.26
Those "skilled in the art" of prosecuting patent
applications for software-related inventions will
readily appreciate the similarities between the
claims and the issues raised in the Telegraph and
Telephone cases and the issues raised by the
claims in many software-related inventions.
I cite these historical examples merely to point
out that criticism and charges that overly broad
patents are issued by the Patent Office is not
new, particularly when dealing with fundamentally
new and rapidly changing technologies.  Yet the
fact remains that in both these cases, as in many
others, protection under the patent system was
broadly afforded to these emerging technologies,
on which entire industries were ultimately
founded.
That is not to say that the U.S. patent system, as
it presently exists, is without problems that need
to be carefully examined.  Indeed, I strongly
support the increased efforts being made by the
Patent Office, including these hearings, to become
more "customer oriented" and to create a stronger
sense of partnership with American inventors at
all levels.  However, when examining the problems
that may exist under the patent system there is a
need for temperance, and we should be slow to
eliminate or narrowly circumscribe protection for
any new or emerging technology simply because the
"newness" of that technology makes it difficult to
search, difficult to disclose, or difficult to
apply statutory standards of eligibility or
patentability.
With these remarks in mind, I turn to some
particular comments on examination standards and
practices that will, it is hoped, suggest possible
ways to strengthen the patent system and the way
in which the patent system can serve to both
reward and foster innovation, as well as
continuing to strengthen our country's economy and
ability to compete in an increasingly competitive
global marketplace.  Specifically, I wish to
direct my comments to four areas:  one, improving
access to relevant prior art; two, improving the
experience, training and retention of qualified
examiners; three, reducing the present emphasis on
pendency time and adopting early publication
procedures; and four, expanding third-party
participation in reexamination and opposition
proceedings.
First, improving access to relevant prior art:
For "pure software" systems (e.g., application
programs, computer operating systems, network
operating systems, and database management systems
to name a few), access to prior art other than
patents or printed publications is needed because
many such "pure software" techniques have not been
documented or published in traditional ways.
Much is already being done to rectify such
problems.  Efforts such as the APS Classified
Search and Retrieval System and private efforts
such as those of Dr. Bernard A. Galler with
respect to the Software Patent Institute are
commendable, and are helping to develop an
adequate prior art database.  The PTO has and
should continue to request voluntary submission of
product descriptions, user manuals, administrator
guides and programming guides in softcopy from
software developers, for addition to the PTO's
library. The current reclassification efforts with
respect to software-related inventions have been
quite successful, and Director Jerry Goldberg and
his team in Group 2300 of the PTO have been doing
an excellent job of reclassifying software-related
technology within the Patent Office.  In addition,
to the extent that such a source has not already
been considered, a classification system which
takes into account classifications proposed by the
IEEE and the ACM might be considered.  These
classification systems represent industry efforts
to classify software-related technology.
Continued effort is needed in all these areas.
Another way to provide patent examiners with
access to the most complete up-to-date prior art
is to solicit the assistance of those most
interested in seeing to it that patents with
overbroad claims do not issue, by providing for
publication prior to grant, and by providing an
opportunity for interested parties to submit
relevant prior art before issuance.  This is
discussed further in point three, below.
Point number two, improving the experience,
training and retention of qualified examiners:
Patent examiners who are not well qualified or
trained or who lack adequate resources will not be
able to adequately assess an invention's
patentability.  Thus, patent examiners need to
have proper background in the software-related
arts, and every effort needs to be made to retain
well qualified and experienced examiners.  One way
to ensure that patent examiners have proper
training in the field of software-related
technology is to recognize computer science as a
"science" for the purpose of serving as a patent
examiner.  	Another important step toward
improving the examining corps' performance level
in the field of software-related technology is to
improve the retention rate of examiners.  On-the-
job training builds examiner competence, and
examiners should be encouraged to stay on the job.
The PTO should consider conducting a comprehensive
study to find ways of increasing the retention
rate of well-qualified, trained and experienced
examiners and to provide adequate resources in
terms of physical support facilities and personnel
to permit efficient and thorough examination to be
carried out.
Point number three, reducing the present emphasis
on pendency time and adopting early publication
procedures:  The PTO should decrease the present
emphasis on pendency time, concurrent with
adopting early publication procedures.  The
current emphasis by the PTO on pendency time is
misplaced.  Since a patent is an important means
for disclosing details concerning new technology,
the important question is not pendency time, but
rather time to publication.  This concept is
recognized in the patent laws of most major
industrial countries, which provide for
publication of an application eighteen months
after the priority date.  Delays in publication
can mean that the technology disclosed in a patent
is not available to the public in a timely
fashion, which may delay further development of
the technology, and leads to problems with so-
called "submarine" patents.
The present emphasis on reducing pendency time has
a number of undesirable consequences on the
examination process.  For example, if a patent
issues within the approximately eighteen-month
pendency time as now suggested by the PTO, prior
art from foreign patent tribunals is most likely
not available for consideration by the U.S.
examiner.  Having this prior art is particularly
important in the software-related arts, and would
help to protect against issuance of overly broad
patents.  It would make for a more complete
examination and higher degree of confidence in the
validity of an issued patent for such inventions.
 It is thus suggested that consideration be given
by the PTO to publishing applications eighteen
months from the priority date.  This publication
should be contingent upon providing a search
report prior to publication, to permit the
applicant to amend or withdraw the application
prior to publication.  Following publication, the
applicant should be entitled to recover damages
for use of the invention after publication but
prior to issuance in the event of infringement.
Examination could then take place in a more
contemplative environment.
It should be noted that early publication can also
operate as early notification to others working in
the field of the potential issuance of a patent,
allowing them to factor that into their business
decisions, thus minimizing the problems with
"submarine" patents, as noted above.
Point number four, expanding third-party
participation in reexamination proceedings:  The
PTO should consider changing the current
procedures governing reexamination.  The problem
of patents that are issued with overbroad claims
could be reduced by changing the current
procedures governing reexamination.  Third parties
are reluctant to institute reexamination because
of the essentially ex parte nature of such
proceedings.  The PTO should expand the ability of
third party petitioners to participate in
reexamination after the petition is granted.  If
such a reform were made, the use of reexamination
would increase, and the reliance on the courts
would decrease.
In conclusion, Mr. Commissioner, I believe that
the above proposed changes would serve to greatly
strengthen the U.S. patent system in ways that
would appropriately further the progress in
science and the useful arts, as contemplated under
the Constitution, and in ways that would continue
to help U.S. industry to effectively compete by
protecting investment of U.S. companies in
important, new technologies of the type that is
typified by the software and electronics
industries.
Thank you.
TESTIMONY OF
ORACLE CORPORATION/JERRY BAKER
BEFORE THE
UNITED STATES DEPART OF COMMERCE
PATENT AND TRADEMARK OFFICE
JANUARY 26, 1994
Good Afternoon, distinguished representatives of
the United States Patent and Trademark Office and
members of the public.  I am Jerry Baker, Senior
Vice President of Oracle Corporation, and head of
the company's Product Line Development.  Oracle is
now a one-and-one-half billion dollar company
employing over 11,000 people worldwide.  At
Oracle, we believe that patents are an
inappropriate means for protecting software, and
are concerned that the patent system is on the
brink of having a devastating impact on the
software industry.  In our opinion, copyright and
trade secret law is satisfactory to protect a
developer's rights in software and to promote
innovation in our industry.
I commend you, Commissioner Lehman, for the
foresightedness to recognize this imminent threat,
and to hold these hearings.  This administration
has shown tremendous strength of character by
raising such fundamental questions about its
mission and objectives, and I applaud you for
doing so.
As we proceed through these hearings let us always
keep sight of the U. S. Constitutional mandate for
the patent system:  "To promote the Progress of
Science and Useful Arts."  I cannot find any
evidence that patents for software will tend to
achieve this purpose.  Indeed, every indication is
to the contrary.
I will attempt to explain Oracle's thesis within
the framework of the questions the PTO has
propounded for this hearing.  First, you ask,
"What aspects of . . . software-related invention
should or should not be protectable through the
patent system?"  The examples specified in the
question  illustrate part of the problem.
Software is fundamentally different from what the
PTO is used to seeing.  In many other industries,
the policy rationale for patent protection is
understandable.  In exchange for making their
inventions available to the public, patent holders
are rewarded with a seventeen-year monopoly giving
them exclusive right to the new technology.  In
cases where an inventor has committed substantial
capital resources to the invention, this
opportunity to monopolize the commercial
application of the invention is justified not
simply as a reward, but as an incentive to
motivate the developer to dedicate the time and
money necessary for innovation, design,
production, marketing, and distribution.
This policy, however, does not fit well with the
software industry.  Unlike many manufacturing-
intensive industries, innovation and development
of software products is very rapid.  Although
there may be substantial development expenditure,
there is an absence of tooling, and production is
accomplished almost instantaneously.  As a result,
software improvements are quickly incorporated
into new versions, making product cycles very
short.  Because a patent takes two or more years
from application to issuance, well into a
product's projected life cycle, patents do not
motivate companies to invest in the development,
design, production, and distribution of new
products.  In this environment, a seventeen-year
monopoly is completely out of context with
industry reality.
Software varies from manufacturing in another key
aspect.  The engineering and mechanical inventions
for which patent protection was devised are often
characterized by large "building block" inventions
that can revolutionize a given mechanical process.
Software seldom includes substantial leaps in
technology, but rather consists of adept
combinations of several ideas.  A complex program
may contain numerous established concepts and
algorithms as well as a multitude of innovative
ideas.  Whether a software program is a good one
does not generally depend as much on the newness
of each specific technique, but instead depends on
how well these are incorporated into the unique
combination of known algorithms and methods.
Patents simply should not protect such a
technology.
The scope of what is protectable is a core issue,
with tremendous impact to anyone in the software
industry.  Oracle's answer to your question is
that none of the cited examples should be
protectable with the possible exception of Example
"F", which is not truly a software innovation, but
rather an otherwise patentable invention that just
happens to be implemented on a computer.
Next, although Oracle has not yet been a defendant
in a patent infringement suit, it is probably just
a matter of time before we are.  Our engineers and
patent counsel advise me that it may be virtually
impossible to develop a complicated software
product today without infringing numerous broad
existing patents.  Since the validity of many
issued software patents is highly questionable,
and because Oracle is a company with sizable
resources with which to defend a lawsuit,  many
patent holders must be reticent to litigate an
infringement action against us. Further, as a
defensive strategy, Oracle has expended
substantial money and effort to protect itself by
selectively applying for patents which will
present the best opportunities for cross-licensing
between Oracle and other companies who may allege
patent infringement.  If such a claimant is also a
software developer and marketer, we would hope to
be able to use our pending patent applications to
cross-license and continue our business unchanged.
But not all infringement plaintiffs are in the
software business, and we would be forced to
either pay royalties or risk an expensive lawsuit.
Thus, to answer your next question, only if patent
eligibility standards were dramatically limited
could we expect to see a positive implication in
the industry - and most positive would be for no
software to be patentable at all.
Your next question takes us back to the
constitutional issue: Do software patents promote
innovation in the field of software?  The U.S.
software industry has evolved to a multi-billion
dollar industry that leads the world in
productivity, and accounts for substantial portion
of U.S. GDP.  The software industry has advanced
the efficiency of other industries through the
proliferation of computing and computer-controlled
processes.  All of these gains have come prior to
the application of the patent process to software,
and consequently without patent protection for
software.  Software companies succeed only because
they continue to be innovative in bringing new and
better products to the market, and these very
market forces will continue to drive the software
industry without the patenting of software.
Finally, you ask whether a new form of protection
for computer programs is needed.  We do not
believe one is necessary.  Existing copyright law
and available trade secret protections have proved
well suited to protecting computer software, and
they have done so in a manner that is not
disruptive to software development.  Copyright
protects software as soon as it is written,
without the expenditure of time and money on prior
art searches and registration.  Since computer
software is considered a work of authorship under
copyright law, the entire software program
including each portion of code, as well as the
derivatives thereof, are protected from copying.
Developers may write software code without fear of
infringing the rights of others, so long as they
do not copy other developers' works.  Copyright
law encourages innovation since it allows everyone
to take advantage of improvements in technology
while protecting developers from having their
specific works copied or appropriated.
At the same time,  trade secret law protects
developments that have not been disclosed beyond
the development team.  Many companies are
successful in using trade secrets to establish
market prominence while the competition hurries to
catch up.
****
Oracle has recommended that patent protection be
eliminated for computer software and computer
software algorithms,  because software patents are
failing to achieve the constitutional mandate of
promoting innovation, and indeed are having a
chilling effect on innovative activity, in our
industry, and because software is fundamentally
different from manufactured products and these
differences justify different treatment under the
law.
Nevertheless, if patent law continues to apply to
software,  we believe that fundamental changes
must be made in patent policy and procedure. Our
recommendations in no way endorse the use of
patents for protecting software, but the
recommended changes could serve to assuage the
existing problems if patents must ultimately
affect software development.  However, we believe
that making the necessary changes to the patent
system will prove to be highly difficult to
achieve.
Patent law must be consistent throughout the world
and, if it is to be applicable to software, it
should encompass much shorter periods of
protection than exist now, unified prior art
searching capabilities, equal standards of
novelty, the elimination of patent rules that
allow "patent flooding," and identical standards
for prior use restrictions (bar dates).
Because the evolution of software moves very
quickly, the term of software protection should be
cut back accordingly, from the current 17 years
from grant date to three years from application
date (the application period must be drastically
reduced).  A balance of fifty years protection for
direct copying of code would continue to be
provided by copyright law.
Also key to the success of the patent system for
the software industry are the following changes:
First:  The prior art capabilities of PTO records
must be vastly improved to confirm effectively the
novelty and non-obviousness of software patent
that is the subject of applications.  New
classifications, as well as an effort to record
the current state of prior art would be necessary.
This is conceptually a daunting task.  Most
software innovation is not recorded for public
availability; instead it is held as trade secrets.
The Software Patent Institute (the "SPI") has been
formed to build a database to assist the PTO with
finding prior art; and while the SPI's intentions
are admirable, it is inconceivable that
developers, small and large, will be willing to
give up their trade secrets or even to devote the
substantial time needed to evaluate, draft, and
submit evidence of existing art to the SPI
database.
Second:  Because of the unusual speed with which
software innovations are incorporated into
products, the PTO's patent review process must be
made much more efficient.  It should take no more
than six months from application to registration.
In the software industry, where a patent
application typically takes two or more years to
process, the patented "invention" is frequently
either widely used or obsolete by the time the
registration is issued and the public discovers it
is protected by a patent.
Third:  Examiners skilled in computer science and
software programming must be trained on the nature
of software inventions, and the state of existing
art.  Many more qualified examiners must be
employed at the PTO. Compensation rates equal to
those provided by industry are essential to
recruit qualified personnel and retain them at the
PTO.
Fourth:  The PTO, in conjunction with industry,
must establish additional committees to clearly
delineate the standards of novelty and non-
obviousness that will be required for software
inventions to receive patents.
****
Thank you for affording me the opportunity to
speak today.  I again commend the PTO for its
willingness to face this very difficult, but
extremely important, issue.
RESPONSE TO THE REQUEST OF THE ASSISTANT
SECRETARY OF COMMERCE AND COMMISSIONER OF
PATENTS AND TRADEMARKS FOR COMMENTS ON
PATENT PROTECTION FOR SOFTWARE RELATED
INVENTIONS
Submitted by Allan Ratner & Steven E. Koffs
Ratner & Prestia
P.O. Box 980
Valley Forge, PA 19482
(610) 265-6666
fax: (610) 265-8935
I.	Topic A - Use of the Patent System to Protect
Software Related Inventions
In considering protection for software, it is of
paramount importance to recognize what industries
would be impacted by any potential changes in the
patent laws.  First, the types of products falling
under the umbrella of "software related
inventions".  The Request for Comment refers to
the "software industry - programming services,
prepackaged software and computer integrated
design".
There is, however, no single "software industry".
Certainly, there is a prepackaged software
industry, and the U.S. patent system should
reflect policies that encourage and protect
innovation within that industry.  But equally
important are the many industries that produce
machinery and electronic systems in which embedded
microprocessors and microcontrollers implement
control functions.  In 1992, a single U.S.
manufacturer sold nearly 250 million
microcontroller chips, each of which is used to
provide control functions in a hardware system.
The list of products controlled using these
embedded chips is virtually endless.  The
following is a very brief list, intended only to
show the diversity of systems. Every one of these
systems is controlled to some extent by software
executing in the embedded microprocessor or
microcontroller.  Every one of them is a "software
related invention."
+	Telephones
+	CT scanners and MRI systems for imaging the
human body
+	Televisions and TV converter boxes
+	Electronics equipment test signal generators
+	Automobile subsystems, including ignition
systems, antilock braking systems, traction
control systems, and air bag systems
+	Chemical process control equipment (e.g.,
Petrochemical cracking)
+	Agricultural equipment (e.g., crop harvester)
+	Microwave ovens
+	Facsimile machines
+	Sewing machines
+	Dishwashers
+	Signal processing equipment
+	Camcorders
+	Automated Bank Teller machines
The trend towards increased use of software in
embedded chips is expected to continue as the cost
of chips decreases.  The decision to use the chips
is typically a design choice, and is determined by
such factors as the relative costs and design
delays associated with implementing functions in
software versus implementing the same functions in
hardware such as Application Specific Integrated
Circuits (ASIC).  Other considerations include
whether the functions of the product will change
frequently, in which case software implementation
reduces product life-cycle development costs.
Conversely, functions that are less likely to
change during the life-cycle of the product are
more likely to be implemented in dedicated
hardware.
Thus, it is impossible to define a single industry
or a single set of characteristics that apply
across the board to business environments in which
software is produced. Admittedly, at one end of
the continuum, there are application software
developers who have low capital costs, and who are
able to bring their products to market rapidly.
Nonetheless, at the other end of the continuum,
U.S. auto manufacturers, for example, rely on
software to improve the comfort and safety of
their products.  Few industries have higher
capital costs than the auto industry, and delays
in bringing new products to market are common.
For example, testing of air bag software in an
actual car is neither fast nor inexpensive.  There
are countless other industries that rely on
software related inventions which do not have low
capital costs or short development cycles.  Any
attempt to define a "software industry" is bound
to fail.
Furthermore, the industries that use embedded
microprocessors and controllers are in need of the
protections offered by the patent system that are
not available through other forms of intellectual
property protection, particularly copyright.
Defining separate standards for patenting hardware
and software is likely to result in inadequate
protection for software related inventions that do
not fit neatly into the precise pigeon holes of
hardware systems and software systems.
Although it is more common to see hardware
circuitry replaced by software implementations,
this is not a one way street.  As computer aided
design techniques improve, a growing number of
hardware designs are created by implementing
functions in software, from which designs for
dedicated circuitry are automatically generated.
Given the ability to implement many algorithms in
either hardware or software elements that are
functionally equivalent, there is no compelling
reason for penalizing an inventor that selects one
implementation of his or her inventive concept
over another.  On the contrary, the inventor who
identifies that a software implementation is
"better" (i.e., less expensive or faster to bring
to the marketplace) has given something more
valuable to society than the inventor who
discloses a functionally equivalent, but more
expensive, hardware embodiment.  The fact that the
inventor has disclosed a software embodiment of
the invention that is easier to implement
increases the value to the public, and the
inventor should be rewarded accordingly.
35 U.S.C.  112, first paragraph requires that the
inventor disclose the best mode of practicing the
invention..  With ever greater frequency, the best
mode for many machines includes software elements.
To the extent that a software solution to
implementing a control function is the preferred
mode, 35 U.S.C.  112 requires disclosure of that
software embodiment in order to secure a patent.
The U.S. Patent system has been successful because
inventors expect to receive protection for their
inventions in exchange for disclosing the best
mode of practicing the invention.  Without broad
protection for the inventive concepts that have
been implemented in software, there would be
little incentive for inventors to disclose
software related inventions in any of the
industries discussed above.  Thus the fundamental
constitutional mandated of promoting progress in
the useful arts would not be met.
The goal of Congress in enacting 35 U.S.C.  101
was to include "anything under the sun that is
made by man."  Diamond v. Chakrabarty, 447 U.S.
303, 309, quoting S. Rep. No. 1979, 82d Cong., 2d
Sess., 5 (1952); H.R. Rep. No. 1923, 82d Cong., 2d
Sess., 6 (1952).  This protection is broad, with a
limited number of exceptions for "laws of nature,
physical phenomena, methods of doing business and
abstract ideas". Diamond v. Diehr, 450 U.S. 175,
185, (1981).  Ever since Diehr, the line dividing
patentable subject mater from non-patentable
subject matter has clearly been based on a
distinction other than hardware versus software.
The border between statutory and non-statutory
matter in inventions that include mathematical
algorithms has been probed through a lengthy
jurisprudence.
As a result, the contributions of software
engineers, controls engineers and systems analysts
have been rewarded and encouraged. Many hardware
products and processes have been improved by
enhanced control signal functionality and
accuracy; many of these control improvements have
been provided through addition of new software
elements.
II.	Topic B - Standards and Practices Used in
Examination of Patent Applications for Software
Related Inventions
The questions asked in part B reflect a response
to a number of criticisms, many of which reflect
the public's misunderstanding with respect to
standards applied in the examination of software
related inventions.  Both the PTO and the Patent
Bar should emphasize that hardware and software
related inventions have been, and continue to be,
subject to the same standards with respect to
novelty and non-obviousness during examination.
It has never passed muster to take a known system
or process and without more, implement that system
or process in software.  A conventional hardware
system, by itself, ported over into software is
still a conventional system.  There is no reason
to define a higher standard of patentability for a
software related invention.
Perhaps some patents covering software related
inventions are seen to be invalid because the code
is written following well known computer
programming skills.  This is not, and should not
be, the standard for patentability used by
Examiners; this should be emphasized.  The
relevant field of the invention is usually never
computer programming itself, even for inventions
in software application programs.  The field may
be: systems engineering; operating system,
network, or database architecture; electronics
design; automated control system design;
electromechanical system design; chemical process
engineering; etc.  The inventor very often is the
system architect, the person who conceives of the
system and its concepts; the programmer acts as a
technician under the inventor's direction.
A valid concern has been raised that Examiners do
not have access to a comprehensive base of prior
art.  One approach to solving this problem is to
improve the access to materials within the PTO's
library (e.g., by reclassifying documents and
adding materials), as well as improving access to
on line prior art databases that increase the
Examiner's productivity.  These techniques are
already being implemented.
Perhaps the single most effective method of
providing a more comprehensive base of prior art
to the Examiner is to enlist the assistance of
other parties who have a stake in the outcome if a
patent is issued.  These parties include both
third parties, and the applicants themselves.
With respect to third parties, the current patent
law presents obstacles for third parties that
would otherwise be inclined to submit prior art.
During prosecution proceedings before the PTO,
which are secret, third parties are seldom aware
of patents under examination. Third parties are
not aware of the disclosure in an application, or
the subject matter being claimed.  Without such
knowledge, third parties, who may have the
greatest incentive to search for prior art, have
no basis on which to conduct such a search.
Early publication of all patent applications
before would enable third parties to submit prior
art during the pendancy of applications.  Such a
change would bring the U.S. in line with most of
the other patent systems in the world, which
already provide for early publication.  The cost
to the applicant for the publication would be
relatively small.  The benefit to the patentee is
a stronger patent, because such a pre-issuance
publication may reduce the likelihood of material
prior art escaping the Examiner's attention.
Third parties benefit by being able to have prior
art submitted during the pendancy of the original
application.  Additionally, third parties would be
able to avoid substantial investment in technology
covered by patent applications that may be held in
secret for many years prior to issuance under the
present patent system.
The public would benefit from early publication
because the information in the application becomes
available at an earlier time, advancing the state
of the art.  Although the PTO has made efforts to
reduce pendancy time, many complex applications do
not issue as patents for three years or more.  It
is the publication of the patent disclosure that
enhances the state of the art, not the grant of
the patent.
Increased third party participation in post-
issuance Reexamination proceedings would also
encourage submission of prior art by third
parties.  Under current Reexamination rules, a
third party cannot participate in a Reexamination
beyond submitting a reply to the patentee's
statement.  If the patentee does not file a
statement, then a third party cannot participate
in the proceeding after Reexamination is ordered.
Under these circumstances, many third parties
choose to withhold prior art and forego requesting
Reexamination, because they are better able to
advocate patent invalidity in court in an
infringement action.
The public would also benefit from greater third
party participation in post-issuance Reexamination
proceedings.  It is in the public interest to find
invalid patents, so that the technology claimed in
those patents is returned to the public domain as
early as possible.
The interest of the applicant in obtaining a
comprehensive search should not be discounted.
Applicants have incentives for assisting the
Examiner in the search.  Under 37 C.F.R.  1.56,
applicants already have a duty to disclose known
material prior art.  Applicants should be
encouraged to assist the Examiner in other ways.
For example, submission of keywords by the
applicant may help the Examiner in conducting an
on-line database search.  Applicants should be
encouraged to suggest search strategies, if known.
For example, the applicant may identify a class or
subclass in which relevant information may be
found.
In summary, the current system has been working
well in the field of software for almost thirty
years of my own personal knowledge.  Of course
improvements are always possible but they should
be carefully tailored to help and improve.
[Prepared Remarks from Mr. Paul Robinson,
Tansin, Darcos & Co.]
Good Morning Commissioner Lehman, Mr. Kushan, the
staff here, members of the audience, people
reading this report in the future and anyone else
I've forgotten.
My Name is Paul Robinson.  I am Chief Programmer
for Tansin A. Darcos & Company, a software
development firm specializing in text processing
applications; I also do work on Commercial
Philosophy and metaphysics of computer systems.
My special interest and my personal hobby is
collecting compiler and other program sources.  My
reasons for this are that these all solve
problems.  By reading the manner and method other
people have solved other problems, it gives me
insight into how to solve mine.
This is a common practice in the computer world in
order to, as the expression goes, "Not reinvent
the wheel."  I assume this is common in other
industries.  In fact, this is most likely the
reason that we have a patent system; someone is
granted the exclusive right over commercial use of
an invention for a limited term in exchange for
telling the world about it.
For most computers, every application such as word
processing or spreadsheets has at least two and
possibly three or more different applications
fighting for market share.  The fights in this
industry are usually referred to by the expression
"Dinosaur mating dances" as huge companies fight
for market share by releasing new programs to
introduce new features that the companies believe
the customers want.  Version 3 of Turbo Pascal was
an excellent language compiler and less than 40K.
Version 4 would fit on one 360K diskette.  Today,
Turbo Pascal for Windows version 1.5 takes 14,000K
of disk space.  The program that is probably the
premiere application for graphics design is Corel
Draw!, which has so much material it is now being
released on not one, but two 500 megabyte CD-Rom
disks.
But there are probably still niches for smaller
companies to move into.
With the rapid changes in the marketplace, it is
necesary to be ready to have new programs and new
releases of old programs out to encourage people
to move to the next release.  In some cases,
companies make more money from upgrades, and need
to do so to stay alive.  These kind of cycles mean
new releases have to be out very quickly; in a
matter of weeks to months.
With this kind of rapid development cycle, delays
in the release of a program could be fatal and the
time available to create the work is sometimes
barely enough.  Until recently, the only legal
issue that anyone had to worry about was copyright
infringement.  That could be avoided by creating
new work from scratch.
Now we have another issue altogether.  A
programmer can independently create something
without ever knowing about any other developments,
and yet be sabotaged by the discovery that the
method that they used is patented.  This is a
standard problem that all industries have had to
face, and it is part and parcel of living in an
industrial society.  But there is another problem.
A computer program is the written instructions by
a human being to tell a computer how to perform a
particular task.  As such, there are only two
parameters: the input supplied to the program and
the expected output.  Everything else is literally
a figment of someone's imagination.
This bears clarification.  A computer program is
the means of manipulating the internal data paths
of a computer system.  There is no requirement
that the manipulations have any correspondence to
the real world.  In this, the real world, doing
anything requires the expensive movement of people
and goods from one point to another, the possible
refinement of materials into other materials, and
the expenditure of energy and resources.   Doing
anything in a computer is merely the essentially
cost-free movement of electron paths from one
direction to another; it brings forth the
apportation of the concepts of the madman Imanuel
Kant into reality: a world in which anything is
possible:
-We can see this in the current discussions going
on about violent computer games where someone goes
about maiming, shredding and killing their
opponents, in graphic detail, then when the game
is over, nothing in the real world has changed
except the clock.  One of my favorites happens to
be the game "DOOM" where the weapon of choice is a
12-gauge shotgun, but a chainsaw does a nice job
on people close to you.
-We have seen it in motion pictures such as "Total
Recall", where, if one is acting within a part of
a computer program, you cannot be certain what is
real or what is fantasy.  The movie "Brainstorm"
had simulations of sexual contact apparently
indistinguishable from reality.
There are things that can be done within a
computer program that cannot be done in the real
world, or would have undesirable consequences.
As such, we should ask whether the patent rules,
which are designed to apply to real-world
conditions where doing something requires the
expenditure of energy and resources, should apply
in a world where the known rules of the universe
do not apply.  Because the entire design starts
from scratch, and the designer doesn't just get to
play God,  he is God.
Despite the ease under which someone can do
something, we still live under real-world
constraints.  Once a design choice is made, it is
very expensive in time and effort to change it.
Worse, because most programs have interactions
that cover every part, a change to one part can
cause unexpected and even undesirable side effects
in unknown and unexpected places.  Computer
programs may be "the stuff that dreams are made
of" but once placed into concrete form as written
in software instructions, it's just as expensive
to repair or change as if it was carved out of
real materials.
It may be necessary to change the rules on patents
to comply with the conditions that exist for
computer programs.
There has been talk of instituting "first to file"
in order to "harmonize" with the systems in other
countries; I think that is not a good choice; most
countries have fewer patents, and provide
protection which is much narrower than our system
does.  This would also mean that someone who does
invent a new and useful technique for use in a
computer application would be unable to collect
any royalties from someone else who is using the
same invention, who thought of it after they did,
but started using it before they filed.
The two really large problems that exist in our
system are probably two part: the secrecy under
which patent applications are filed, and the
problems if a program uses parts of several
patents, which might not be discovered until
later.
As I mentioned earlier, computer programs are
created out of the figment of someone's
imagination, then mass copied, the way an original
painting can be reproduced by lithograph.  A
single large application might have a dozen people
working on it, and upwards of 50 different
features, and might have upwards of 200 or more
different parts, any one of those might be
infringing on zero, one or more patents depending
on what the claims are.  I doubt seriously that
all but the largest corporations have the
resources to do 200 patent searches on a single
software application, which would be prohibitive
for a small company, because it is likely that a
large program could infringe dozens of patents,
due to the continued development of ever larger
applications that do multiple simultaneous
functions.
But more than that, you can't do patent searches
on works which are under application form, until
after the patent has been issued.  And more
importantly, with more than 1,200 patents issued
every week, checking them all for possible
interconnection would make it impossible to do any
serious work.
Seventy years ago, fears that the major piano
player manufacturer would tie up the entire song
market and prevent other companies from creating
player piano rolls caused Congress to institute
compulsory licensing.  This may be an idea whose
time has come again.
Therefore it might be considered to make two
changes in the patent law with respect to computer
programs: to implement a standard compulsory
license, perhaps 10 percent of the manufacturer's
suggested list price, and to eliminate secrecy
provisions in the filing of patent applications.
Either of these could certainly help the
situation.  Eliminating secrecy and publishing
applications once filed would let people know
about pending inventions: they could endeavor to
avoid infringements in advance; it might also
allow them to file interferences early, if it
turns out that they invented the concept earlier,
while it is cheap to do so; and would allow people
to be aware of what is being developed which would
comply with Article 1, Section 8 of the
Constitution, where patent protection was designed
"to encourage the improvement of the useful arts".
The other option of setting a standard royalty via
compulsory license would eliminate the worries of
someone infringing upon an existing patent or one
that is filed after their work is created.  It
would also grant to inventors an income stream
from those who use their inventions, which started
before they filed their application but after they
reduced the invention to practice. It would also
limit liability and exposure to sustainable
limits.  As it stands, if someone develops a
program that infringes upon 40 patents, and they
each want a 3% royalty, it isn't hard to see that
120% of the program's income is not going to be
possible.
TIMOTHY D. CASEY
[Silicon Graphics, Inc.]
TESTIMONY AT PATENT OFFICE HEARING
ON PATENT PROTECTION FOR SOFTWARE RELATED
INVENTIONS
I am Timothy Casey, Senior Patent Counsel for
Silicon Graphics, Inc., headquartered in Mountain
View, California. Silicon Graphics is the world's
leading supplier of visual computing systems
targeted at the technical, scientific and
corporate marketplace. The Company pioneered the
development of color three-dimensional computing,
transforming it into practical and affordable
mainstream solutions that improve productivity and
increase operational efficiency across a broad
array of industries, even though we seem to have
gained our greatest notoriety from our involvement
in movies like Jurassic Park and Terminator 2.
Although Silicon Graphics designs and
manufacturers personal computers, workstations,
servers and supercomputers based on our own RISC
processing technology, a large part of our overall
development effort is now focused on software,
including display, communication, development
tool, operating system, application and user
interface technologies.
Naturally, Silicon Graphics files a large number
of patent applications related to both our
hardware and software based inventions and has a
vested interest in maintaining such protections.
But rather than use my time to further expand upon
the horrors or virtues of software patents, I
would rather state that we are spending too much
of our time in these hearings discussing the ill
patient and not enough time discussing the
disease. Software, as incorporated into the patent
system, is not the new great villain that many
people would like us to see, but rather a
misunderstood giant. As I mentioned earlier, most
computer system manufacturers today invest a
majority of their research and developmentefforts
on software technologies in order to further
distinguish their hardware products from their
competition. I truly hate to think of what would
happen to this industry, and this Nation's
economy, if less than half of this development
effort was subject to patent protection.
And it is also important to consider that, in
practical terms, software is not really different
from hardware. It is just that the Patent Office
understands hardware and is better prepared to
adequately examine hardware related cases. Patents
have been granted on transistors, resistors,
capacitors, clock circuits, filters, and the like,
all necessary building block of many electronic
designs, but has that seriously impeded the
electronics industry? Why is software so
different? Are not most software products composed
of basic elemental blocks of code arranged in new
ways to perform new tasks, much like any modern
electronic products? The reason software patents
have developed into such a controversial topic is
primarily because a number of overly broad
software patents have been allowed to issue. And
why is that? Well, we can argue that the prior art
is inadequate, and that is true. And we can argue
that the statutory subject matter tests are
inadequate, and that is also true. But I would
argue that one of the biggest causes is the fact
that Patent Office has not had the most important
tool it needs to adequately examine software
patents: that is examiners who have the same
fundamental understanding of basic software
elements as they have of basic hardware elements.
I find it to be absolutely amazing that the Patent
Office has issued so few overly broad software
patents given the level of training of many of the
examiners and the complexity of the application
subject matter.
While I understand that the Patent Office has
already undertaken steps to hire computer science
majors in the future to help solve part of this
problem, which I loudly applaud, there are many
additional measures that can be taken to improve
the services of the Patent Office, both with
respect to already issued software patents, and
any applications that might be examined in the
future. Some of these measures include:
While I understand that the Patent Office has
already undertaken steps to hire computer science
majors in the future to help solve part of this
problem, which I loudly applaud, there are many
additional measures that can be taken to improve
the services of the Patent Office, both with
respect to already issued software patents, and
any applications that might be examined in the
future. Some of these measures include:
1. Revamping the reexamination process so that
reexaminations can be used to achieve the goals
for which they were originally intended. One step
would be to make reexaminations an inter partes
proceeding. Another would be to make them less
expensive, both in terms of fees and the for mal
requirements of a reexamination request, that
presently force potential applicants to seek
exceedingly expensive professional assistance in
order to comply. It may also be in the Country's
best interest if an amnesty period is implemented
over the next year or so during which applicants
could institute a reexamination of any software
patent, based on new art, by simply filing out a
one page application form and filing a minimal
fee, say $500.
2. Instituting some form of pre-publication of
applications for the purpose of eliciting industry
comment, such as publishing issued patents on a
tentative basis pending the discovery of new art
during the comment period.
3. Establishing routine industry supported
education programs to provide continuing education
for examiners, even up to and including advanced
degree study for examiners who commit to an
extended tenure with the Patent Office.
4. Employing technical specialists with broad
industry knowledge and allowing them to roam
between examining groups so they can provide
expert assistance when needed to less highly
trained examiners.
5. Allowing examiners more exposure to a variety
of technologies instead of pigeon-holing them in
narrowly constricted examination areas.
6. Providing the examiners with better technical
tools, such as networked computer systems that
allow examiners to do key element searching in
both text and graphics on a single screen and at
the same desktop system that they use for word
processing, video teleconferencing, and Internet
communication.
7. Introducing legislation to turn the Patent
Office into a government corporation so that the
Patent Office can attract and maintain examiners
at competitive pay scales without being
constrained by the civil service pay guidelines,
and allow the Patent Office to actually keep and
utilize all of the money it raises from user fees.
8. Instituting new limitations on the maximum
number of claims permitted in an issued patent,
such as three independent claims and no more than
30 total claims, in order to simplify the
examination process and reduce the burden of
accused infringers who are often forced to prepare
opinions on patents with hundreds of primarily
duplicative claims.
9. Instituting per page surcharges for patent
applications with more than 35 pages of text and
10 drawing figures to force applicants to be more
succinctly descriptive of their inventions.
As long as I am on the subject of steps that the
Patent Office can undertake to improve its service
to its clients, I will introduce two additional
measures which should be considered. Namely,
instituting a new type of expedited patent
application, and regionalizing the Patent Office.
Silicon Graphics recently obtained a patent on
some technology that was
critical to the protection of a part of one of our
systems that we knew had already been duplicated
by after market suppliers of such parts. Despite
filing a Petition To Make Special with our
application and being extremely diligent in our
efforts to shepard the application through the
Patent Office as soon as possible, it still took
eight months from the filing of the appli cation
for it to finally issue as an enforceable patent.
Now you may think, `eight months, that's pretty
fast,' but it would have been done in two to three
months had it not been for the fact that it took
three months to get from the mail room to the
examiner and another four months to get from the
examiner to final print. The examiner completed
the entire examination of the patent in less than
one month.
In another similar case, we have had a patent
application on a fairly simplistic mechanical
assembly sitting in the Patent Office since July
1991, despite the filing of a Petition To Make
Special. During the pendency of this application,
that mechanical assembly was copied by a number of
companies. Although this has only resulted in a
small amount of competition for us in the
relatively narrow market for this part, it was a
greater concern for us because the knock-off
products were not always of adequate quality and
could cause damage to our customers systems, for
which we would ultimately be responsible for
correcting in order to maintain customer loyalty.
This would not have been the case had this
application been allowed to issue.
The reason the one application took eight months
and this other application has taken over 2 1/2
years is because the petition to make special
process only applies to the examination and not
the remainder of the Patent Office process. What
is needed, therefore, is a new type of application
that not only gets expedited when in front of the
examiner, but throughout the entire process. I
would be more than happy to pay a higher fee, such
as $1,000 to $1,500, for a truly expedited
application, in these types of situations.
My last suggestion is that the Patent Office
seriously consider working to regionalize the
Patent Office. No one in Washington can truly
appreciate the difficulties in communicating with
the Patent Office from the west coast. Because of
the time differences between the two parts of the
country, and the new flexible hours program
instituted by the Patent Office, which I do think
is a good thing, there is only a one hour period
each day, typically between 12:30 - 1:30 PST,
during which a practitioner on the west coast can
expect to get a hold of an examiner on the
telephone. Because of this, it has sometimes taken
over a month to arrange a telephone interview with
an examiner. My colleagues on the east coast,
however, can call at much more convenient hours,
or even walk over to the Patent Office for an in
person visit, something that would cost me well
over $1,000 to attempt.
Given these restrictions, I hate to imagine what
the independent inventor or start-up organization
on the west coast thinks of our patent system.
Some other benefits of a regionalized Patent
Office would include:
1. An ability to draw from a larger pool of
potential examiners;
2. New economic growth in the parts of the country
selected for the new Patent
Office sites; and
3. Greater public accessibility to the Patent
Office records and examiners, as well as greater
exposure for the examiners to the relevant
industries.
I hope these suggestions prove to be a useful
guide to the Patent Office and as an invitation to
the Patent Office to consult with west coast
companies and practitioners for additional
solutions that could be implemented by the Patent
Office to resolve our present difficulties, but to
also raise the Patent Office to new heights of
service.
Thank you for this opportunity today.
Testimony before the Patent and Trademark
Office
James R. Shay
Morrison & Foerster
San Francisco, California
January 26, 1994
My name is Jim Shay.  I am with the law firm of
Morrison & Foerster in San Francisco. We represent
the Multimedia Development Group, a trade
assocation based in San Francisco, as well as
other clients in the software and multimedia
industry.  My comments today, however, are my own;
they do not necessarily represent the views of my
firm or its clients.
I am a patent attorney.  I spent three years as a
patent examiner before entering private practice.
I have also served as in house counsel for a
medical technology company.  I have worked in a
variety of technologies in a variety of ways:
prosecution, litigation and licensing.  I
represent individual inventors, large corporations
and investors.  I believe in the value of patent
protection as a tool for spurring innovation and
for helping inventors, whether corporate or
individual, obtain the benefit of their
contribution to society.  In my opinion, this
principle applies as much to software-related
inventions as to any tangible mechanical, chemical
or electrical invention.  Patent protection is
appropriate for software inventions.
Specifically, the software industry as a whole,
and software companies and developers
individually, benefit from the patent system.  The
"software industry" I am referring to is not just
the companies whose primary products reside on
floppy disks or CD-ROMS.  In my view, the term
"software industry" includes any supplier of
products incorporating programmable
microprocessors, products such as medical
monitors, animated toys, automobile electronic
ignitions and audio products, to name a few.
Advances in microprocessor technology have made
software ubiquitous.  Protection of patentable
inventions embodied in software is therefore of
concern not only to companies writing and selling
software per se but also to all manner of high-,
medium- and low-tech companies serving a variety
of markets.
To effectively serve its purpose, the patent
system must be reliable.  Patent owners and
potential infringers alike need to know that a
patent issued by the U.S. Patent and Trademark
Office is likely to be valid.  The statutory
presumption of validity of issued patents makes
the existence of questionably valid patents a
difficult problem for all affected.  The high cost
and uncertain outcome of patent litigation have
driven more than one company to take a license
under a patent that did not actually represent a
novel and unobvious advance over the prior art.
Litigation and/or the payment of royalties for
such patents is a waste of resources for the
accused infringer and for the licensee.
As the PTO has acknowledged in conducting these
hearings, there appears to be a particularly high
amount of concern over the validity of software
patents.  A good example is the public reaction to
the Reed et al. patent which issued in August of
last year and which is currently owned by
Compton's NewMedia.  In my capacity as counsel to
the Multimedia Development Group I participated in
question and answer sessions about the Compton's
patent with members of the MDG Executive Committee
and with individual MDG members. Many expressed
strong negative opinions about the conduct of the
Compton's patent applicants before the PTO and
about the ability of the PTO to examine and issue
valid patents in this subject area.  My review of
the file history of that patent, however, showed
no evidence of any particular lapse of failure on
either part.  Nonetheless, the consensus of nearly
all to whom I spoke was that the broadest claims
of the Compton's patent could not possibly be
valid and that anyone associated with the
multimedia industry would agree.
The eventual disposition of the Compton's patent
remains to be seen.  The discussion surrounding
the Compton's patent, however, has pointed to some
possible deficiencies in the current patent
system, especially as applied to software-related
inventions.  First, patent examiners do not have
easy access to the best prior art for software-
related inventions.  One reason for this is the
fact that inventions predating the Supreme Court's
Diamond v. Diehr decision were not patented.
These inventions are therefore not reflected in
the PTO's patent files.  Furthermore, even after
the Diamond decision, patent applications were not
filed for many software inventions for reasons of
expense, turn-around time and reliance on
copyright protection, to name a few.  The best
prior art, therefore, consists of actual software,
operators manuals, research papers, and the like.
These references are not generally accessible to
patent examiners.
Second, the PTO's relative lack of experience in
software-related  inventions makes it difficult
for an examiner to determine how one of ordinary
skill in the art would have approached the problem
the patent claims address.  Often it is the
feeling that an invention would have been obvious
that leads an examiner to find the most pertinent
prior art references and to make the most
compelling argument regarding the unpatentability
of the claims.  This disconnect between the gut
feelings of the patent examiners and the gut
feelings of skilled artisans in the software
industry undermines the industry's faith in the
PTO.
I would now like to make some recommendations
based on these observations.  First, operating
within the current statutory framework, I believe
that the PTO and the software industry could
benefit greatly from a more formal interaction.
Specifically, the software industry, operating
through industry groups such as the MDG, could
provide the PTO with the kinds of prior art
references that the PTO currently lacks.  Such a
program would require the industry groups to dig
up and send, and the PTO to accept and classify,
prior art references related to past and present
software inventions.
In addition, the PTO and industry groups should
cooperate to train examiners working with software
inventions.  I am aware, for example, of training
programs offered by the Software Patent Institute.
I also believe that the PTO should undertake the
task of teaching the software industry about the
patent process so that the industry can use the
existing process more effectively.
Second, to the extent that the PTO is willing to
support statutory changes, I believe that a system
of pre-grant publication and opposition
proceedings would help improve the quality of
software patents.  I note that the Secretary of
Commerce recently stated an intention to maintain
a first-to-invent system.  The change I propose
could be made with or without a change from a
first-to-invent system to a first-to-file system.
A less radical statutory change would be to open
the reexamination process to provide for full
participation by interested parties in addition to
the patent owner.  I also advocate the use of oral
testimony in reexamination proceedings; experts in
the field can be the best source of prior art.
This change could encourage the submission of all
relevant prior art instead of the current practice
of withholding the best prior art for use in
license negotations and in district court
infringement proceedings.
In conclusion, while the emphasis of my remarks
has been on the deficiencies I perceive in the
patent system, I should state that I believe that
there is much that is right with the currrent
system.  My proposals would be only minor changes
to a system that has served us well in promoting
the useful arts.
Thank you for providing me with the opportunity to
present my remarks.
Testimony on Patent Protection for
Software-Related Inventions
[Prepared remarks of the Software
Publishers Association]
Docket No. 931222-3322
U.S. Patent and Trademark Office
Arlington, Virginia
February 10, 1994
Mr. Commissioner and members of the panel, thank
you for the opportunity to appear today to speak
about patent protection for software-related
inventions, in particular on the standards and
practices used in examination of patent
applications for software-related inventions.27
My name is Mark Traphagen, and I am counsel for
the Software Publishers Association (SPA).
Patents for software-related inventions have been
highlighted by the media in recent months.  For
example, last year the U.S. Patent and Trademark
Office (USPTO) granted a patent to Compton's New
Media of Carlsbad, California for a system for
retrieving textual, graphic, audio, and video
information from multimedia works.28  Now,
Compton's New Media is a member company, and SPA
has no position on the merits of its patent, which
is now being reexamined.  But it is worth noting
that Compton's New Media is not alone in seeking
patent protection for software.
Several other companies have been reported to own
patents for software with important applications
for multimedia works.  Since 1987 more than 10,000
patents have been issued on nearly 35,000
applications filed in Classes 364 and 395, in
which most software-related inventions are
classified.29  In 1992 alone, nearly 8000
applications were filed in these classes, with
almost 2000 patents being issued.30   Lest one
think that patent applications for software
patents are a phenomenon unique to the U.S., the
Japanese Patent Office issued as many as 12,000
such patents in 1990,31 a figure which could make
it more difficult for U.S. software companies to
compete in Japan.
Since it was founded in 1984, SPA has been a
leader in advancing the interests of its members
through copyright law. 32  Copyright law has been
more popular than patents among software
developers and publishers because protection is
relatively inexpensive and free of formalities.33
Copyright law alone cannot protect all the aspects
of intellectual property in software technology,
however, because it is limited to creative
expression in software code, screen displays, and
other graphic output.  In particular, Section
102(b) of the Copyright Act provides that:
In no case does copyright protection for an
original work of authorship extend to any idea,
procedure, process, system, method of operation,
concept, principle, or discovery, regardless of
the form in which it is described, explained,
illustrated, or embodied in such work.34
It is precisely these functional aspects of
software technology that are sought to be
protected by patent law.  While, like copyright
law, patent law does not protect ideas in
themselves, it does protect the machines, methods,
processes, and apparatus that implement novel
ideas.  This protection is extended, however, only
to innovations that satisfy the statutory
requirements of novelty (is it new?) and non-
obviousness (is it "obvious" to someone skilled in
the relevant art?).35
SPA has over 1100 members, and represents not only
large, well-known software publishers and
developers, but hundreds of smaller companies and
organizations as well.  SPA members include not
only those organization that seek patent
protection, but also those whose products are
potentially affected by patents held by others.
SPA called on leading members in its consumer,
education, and multimedia sections to join a
Software Patent Working Group, which assisted
SPA's Government Affairs Committee in formulating
SPA's position on patent protection for software-
related inventions.
The success of the patent system in encouraging
technological and commercial progress in other
fields suggests it would prudent to try improving
the patent examination process before changing the
statutory underpinnings of the law.  Whether
patent owner or patent user, many agree that the
patent examination process can be procedurally
improved.   In particular, the PTO faces two
problems in examining the increasing number of
software patent applications:  (1) the lack of a
comprehensive database of nonpatent prior art in
software technology, and (2) training the PTO
examining corps in continuing advances in software
technology.
SPA supports efforts to improve the patent
examination process, and commits itself to the
following three-step program to help the USPTO
solve these problems:
	SPA will continue to support the efforts of
the Software Patent Institute, a nonprofit
organization developing a software technology
prior art database for the USPTO and the public;
	SPA will call on its broad membership to
contribute non-proprietary information about
software products to the SPI;
	SPA will provide educational and training
opportunities in the field of software technology
to USPTO examiners.
Many objections to the current system of patent
protection for software-related inventions stem
from difficulties in uncovering prior art and
determining the validity of patents.  Typical
complaints focus on the unavailability of
pertinent prior art for use by patent examiners.
An expanded prior art collection would help the
USPTO make more  informed judgments about whether
a particular invention meets the statutory tests
of novelty and non-obviousness with information
about prior art in the field of software-related
inventions.
These difficulties are not unique to software
technology, but developing a comprehensive prior
art database has proven more difficult for
software than other disciplines, such as
biotechnology.  In the early days of the software
industry, patent protection was not as widely used
as it has been for other technologies.  The
primary focus, instead, was on copyright
protection for the creative expression in software
code, and trade secret protection for other
aspects of the technology.  Therefore, the most
pertinent prior art may not reside in patents, but
in publications and limited circulation documents,
such as technical manuals.   The difficulty has
been compounded by two related problems, namely
the inconsistent terminology found in software
trade literature, and inadequate indexing and
inaccessibility.
The first step in SPA's program will be to
continue to support the effort to build a
nonpatent prior art database in the field of
software technology.   SPA is an executive
committee member of the Software Patent Institute,
which has been recognized for its efforts to
provide the best available prior art information
in the software technology field for use by the
USPTO and the public.36  Up until now, the PTO has
lacked a source of technology descriptions that
concentrates on software-related materials to
supplement existing patents and some published
literature.   To fill this need, the Institute is
compiling a Database of Software Technologies from
descriptions of software techniques and processes
contributed by the software industry, government,
and academia.  The objective is to make this
database available for computer aided searching to
facilitate scholarship, and also to assess
patentability and possible patent infringement,
The Institute is gathering written descriptions of
software-related technologies from published
sources, such as Miller-Freeman Publications' Dr.
Dobb's Journal , IBM's Technical Disclosure
Bulletin, the Association for Computing
Machinery's Computing Reviews,  and newsletters
from the Pascal User Group.  The database will
also draw on other technical sources, including
course materials from the University of Michigan
Engineering Summer Conferences, and manuals from
Microsoft Corporation, Apple Computer Inc., IBM,
and Hewlett-Packard.
The Institute's work is now producing results that
promise to improve the ability of patent examiners
to conduct research into non-patent prior art.  On
January 15, 1994, the Institute made its prior art
database available on-line, and has demonstrated
it to the USPTO and the American Intellectual
Patent Law Association.   For the next several
months, the USPTO and Institute members will use
the database on a trial basis to evaluate its
search capabilities, interface, and other
features, after which it will be available to the
public.
As the second step in its program, SPA will call
on its membership to contribute non-proprietary
information about software prior art to the
Institute for incorporation in the database.  SPA
is in an excellent position to assist in this
effort because it is the principal trade
association of the personal computer software
industry.  SPA has over 1100 members in North
America and Europe, ranging from large, well-known
companies, to hundreds of smaller companies, all
of which develop and market  consumer, business,
and education software.  The cumulative knowledge
of these many diverse members is unsurpassed, and
should reinforce the already significant resources
incorporated in the Institute's database.
The third step in SPA's program will help address
concerns about the level of skill of the patent
examiners handling applications for software-
related inventions.  SPA would like to assist the
USPTO in educational and training programs
designed to keep software patent examiners
conversant in rapidly developing technology.  To
begin this effort, SPA will  extend scholarships
for the USPTO Group 230 to have patent examiners
attend the SPA Spring Symposium in San Francisco,
the largest gathering of representatives in the
personal computer software industry. 37
The SPA Spring Symposium will feature many
seminars devoted to emerging technologies, in
particular the development of RISC and UNIX
systems, wireless and interactive networks, and
the role of patents in software development.   The
SPA program would complement the academic training
now being offered by the Software Patent Institute
and other groups.  Jerry Goldberg, the director of
the USPTO's Group 230, has been very receptive to
this initiative, and in return has invited SPA's
Software Patent Working Group for a tour of the
PTO.  SPA looks forward to a continuing
relationship that will promote the flow of
information between the USPTO and the software
industry.
In closing, the most important concern about
patents for software-related inventions for SPA
members, whether they be patent owners or patent
users, is the integrity of patent examination.
SPA is hopeful, as others have been, that the
current problems of patent protection for
software-related inventions can be addressed by
improving the USPTO's access to nonpatent prior
art and information about ongoing developments in
software technology.
Once again, Mr. Commissioner and members of the
panel, thank you for giving SPA the opportunity to
testify on this important issue.  I will be happy
to answer any questions you may have.
Presentation by Bernard A. Galler, Software
Patent Institute
to the Patent & Trademark Office Hearings on
Patenting of Software-Related Inventions
February 11, 1994
The history of inventions in the software area is
not recorded well.  There are a few formal
journals, such as the Annals of the History of
Computing, and some textbooks, but the prior art
that is needed by the United States Patent and
Trademark Office (PTO) is not available in many of
the forms that more mature fields support.  For
example, in the fields of chemistry or physics, in
addition to a large number of patents available to
the PTO, most research results are published in a
relatively few journals.  This is certainly not
the case in the software community.  Not only are
results and inventions not published in formal
journals most of the time, they are usually
described, if at all,  primarily in informal
conference reports or newsletters.  Add to that
the almost complete lack of issued patents before
1981 in this field, and it is clear why PTO
examiners have a difficult time finding prior art,
even when previous work that is relevant is well
known in the field.
There are some repositories of program code, but
it is very difficult to extract or abstract the
innovative and non-obvious algorithms and ideas
that are detailed there.  What is needed is not
the detailed code, but some level of description
of what is in that code.  Unless the author
carefully documents the developing algorithm, the
control flow, and the data structures, it is very
difficult to discover these concepts to understand
the underlying process.  It is well known,
however, that programmers are usually too
interested in moving on to the next task to take
the time to document the last one.
It isnt difficult to understand why software
results are so often not published in formal
journals.  Most of the work in this emerging field
has been done outside academia, since software is
almost always immediately applicable to the
solution of problems that already exist in
industry.  Of course there is theoretical work in
Computer Science and in Computer Engineering, but
the explosion of computing in our society has led
to a corresponding explosion in software
techniques in advance of the theory, and in the
rush to exploit these techniques, relatively
little effort has been devoted to disseminating
these results and techniques widely.  In fact,
even when this kind of information is not regarded
as a trade secret, many companies are not
particularly anxious to have it widely available.
During the years before 1980, there was much
confusion as to the kind of protection that might
be available, if any, for software inventions, and
there was little incentive for programmers to try
to publish their work.  Much of the communication
that did go on occurred at thematic conferences
and workshops.  The reports of such conferences
constitute a very valuable source of prior art,
but they are not readily available to the PTO.
Thus, the PTO has found it difficult to identify
the relevant sources for prior art, or to collect
that prior art into a usable database for the
purpose of evaluating patent applications.  What
are the relevant sources for prior art in the
software area?
- Already mentioned are conference and workshop
proceedings from both general and specialized
conferences.  These are usually sponsored by
professional societies such as the Association for
Computing Machinery (ACM) and the Institute of
Electrical and Electronic Engineers (IEEE), or
their Special Interest Groups (SIGs) or Societies.
The SIGs publish newsletters, also, often
containing nuggets describing new ideas and
techniques which eventually prove to be important
prior art.
- Universities, such as Michigan and UCLA, have
for many years offered short courses (lasting one
or two weeks), in which leading-edge research
results are presented, disclosing new ideas,
concepts, and techniques.  The notes which are
distributed to attendees contain valuable
descriptions of such work, and in time prove to be
important prior art, publicly disclosed.
- Manuals for commercial systems and applications
often contain important descriptions of the
techniques these systems and applications embody,
and are a valuable source of prior art.  Such
sources would not be readily available to PTO
examiners unless the PTO would have the funding to
build an extensive library with appropriate
indexing for that purpose.
- A number of software vendors publish internal
reports and/or research journals which are made
available to their customers and are thus publicly
disclosed.  These reports and journals, and other
materials used for the education and training of
customers, often describe innovative ideas and
techniques which could be used as prior art if
they were available to the PTO examiners.
- Government-supported research is often
documented in reports generated by the Principal
Investigators and published by the sponsoring
government agencies.  While these are public
documents, it is not easy to know where to look
for them.  They often contain the earliest reports
of significant research and applications in the
software area.
- Another source of material can be found in books
published on various subjects in Computer Science
and Computer Engineering.  These include textbooks
for more advanced courses, and research
publications from academic institutions.  It is
not always easy to find the kinds of prior art
that examiners need in such books, but if they
were on-line (instead of only in printed form), it
would be much easier to discover which books
contain material relevant to a particular claimed
invention.
- Finally, corporate defensive disclosure
publications can be important sources of relevant
prior art.   A company that wants to make sure
that a competitor does not obtain a patent
covering a process or technique that is essential
to its own business might publish a description of
that process or technique so as to have it
publicly disclosed, without taking the additional
step of applying for a patent.  On the other hand,
that company may not be particularly anxious to
advertise its discovery or use of that process or
technique, so the publication will not be very
widely disseminated.  If indeed a patent is later
issued for that process or technique, the company
can point to the disclosed art during litigation,
but that is a very late stage in the cycle.
Companies that rely on defensive disclosure should
be encouraged to deposit their published
disclosures in a database available to the PTO, so
the controversial patent most likely will not be
granted at all.
The Software Patent Institute (SPI) is a nonprofit
institution dedicated to providing information to
the public, to assisting the PTO and others by
providing technical support in the form of
educational and training programs, and to
providing access to information and retrieval
resources. The primary goal of the Software Patent
Institute is to provide the best available
information as to prior art in the software field
for utilization by the public and the PTO.  We
applaud the effort by Dr. Dobb's Journal of Miller
Freeman Publications to make its articles
available on CD-ROM, and the efforts of Ziff-Davis
Publications to put a number of recent computer-
related publications on CD-ROM, as well as the
efforts by the IEEE and the ACM to make available
abstracts of computer science articles.  We also
applaud the efforts of those who are working to
identify, collect, and distribute copies of the
patents they consider software-related, especially
since many of the patents that have been
identified come from a large number of PTO
classes.
These efforts are valuable contributions to the
overall effort to document the history of software
technology and to make the results available in
on-line form.  The Software Patent Institute, for
its part, is tracking these efforts carefully so
that our collection supplements, rather than
duplicates, these other efforts.  To track the
history of an exploding industry with rapidly
developing technology is a massive undertaking
that will require significant efforts by a number
of organizations. We are committed to being one of
them.
The Software Patent Institute also provides an
educational resource from which the PTO and the
public can obtain an enhanced understanding of the
nature of software, of software engineering, and
of the history of the discipline and its
relationship to the patent process.  Several
lectures have already been given to the examiners
of the PTO on aspects of software history and
techniques, and several more are scheduled during
the next few weeks and the coming months.  We plan
to offer our first one-day session on related
topics to patent professionals and the general
public sometime this Spring.
Although there is currently a debate on the
overall desirability of having software patents,
the Software Patent Institute has deliberately
taken no position on that question.  We recognize
that the patent system is in place and working,
but that there is currently a problem regarding
software-related patents.  We are dedicated to
helping alleviate that problem, independent of
longer-range considerations that must eventually
be resolved.
The Software Patent Institute has asked people
throughout the software industry, government, and
academia to contribute descriptions of software
techniques and processes to the Software Patent
Institute database.  These descriptions form the
content of the SPI database and have now been made
available for computer-aided searching by the PTO,
and by the members of the Software Patent
Institute.  Access by the general public will
follow shortly.
The SPI database already contains many examples of
each of the kinds of relevant prior art outlined
above, and it is growing rapidly.  Our
recommendation to this panel is to issue a strong
recognition and endorsement of this kind of
activity -- by the Software Patent Institute and
by others -- and to encourage the PTO to take
advantage of the services of the Software Patent
Institute as much as possible.  We strongly
believe that the PTO can and will do a better job
than it has, if it has the right tools and the
right information.
For submission to the Patent & Trademark
Office
by Richard Stallman
Each year the government creates new bureaucractic
programs.  Each is created for a purpose.  That
doesn't mean it serves that purpose or that it is
worth the cost.
It's hard to close down unnecessary bureaucracies,
because people presume that they must do *some*
good.  It's easy to admit that a government
program has drawbacks, but many won't seriously
consider whether it does more harm than good.
Thus we see, in the announcement of these
hearings, the supposition that software patents
are helpful.  We are asked whether they "protect"
software developers "enough".  Patent lawyers
chose the word "protection" to imply that patents
are good.
Now commentators feel pressure to use the same
prejudiced word, lest they appear unschooled.
This does its part to impede consideration of the
possibility that patents are actually "too much".
I'm not a lawyer.  I am a programmer, and
considered a good one.  I'm here to explain why
software patents impede software development and
retard software progress.
Software is like other fields of engineering in
many ways.  But there is a fundamental difference:
computer programs are built out of ideal
mathematical objects.  A program always does
exactly what it says. You can build a castle in
the air supported by a line of zero thickness, and
it will stay up.
Physical machinery isn't so predictable, because
physical objects are quirky.  If a program says to
count the numbers from one to a thousand, it will
do exactly that.  If you build the counter out of
machinery, a belt might slip and count the number
58 twice, or a truck might go by outside and
you'll skip 572.  These problems make designing
reliable physical machinery very hard.
When we programmers put a `while' statement inside
an `if' statement, we don't have to worry about
whether the `while' statement will run such a long
time that it will burn out the `if' statement, or
that it will rub against the `if' statement and
wear it out.  We don't have to worry that it will
vibrate at the wrong speed and the `if' statement
will resonate and crack.  We don't have to worry
about physical replacement of the broken `if'
statement.  We don't have to worry about whether
the `if' statement can deliver enough current to
the `while' statement without a voltage drop.
There are many problems of hardware design that we
don't have to worry about.
The result is that software is far easier to
design, per component, than hardware.  This is why
designers today use software rather than hardware
wherever they can.  This is also why teams of a
few people often develop computer programs of
tremendous complexity.
People naively say to me, "If your program is
innovative, then won't *you* get *the* patent?"
This question assumes that one product goes with
one patent.
In some fields, such as pharmaceuticals, patents
often work that way. Software is at the opposite
extreme: a typical patent covers many dissimilar
programs and even an innovative program is likely
to infringe many patents.
That's because a substantial program must combine
a large number of different techniques, and
implement many features.  Even if a few are new
inventions, that still leaves plenty that are not.
Each technique or feature less than two decades
old is likely to be patented already by someone
else.  Whether it is actually patented is a matter
of luck.
The only way a programmer can avoid this mess is
by sticking to things that are obsolete.  You may
not recall the state of the computer field
seventeen years ago, since most people didn't pay
attention back then.  There were no personal
computers.  If you were a hobbyist, you might get
a computer with a few thousand bytes of memory.
With luck, it might run Basic.
This shows another way software is different: it
progresses very quickly.  A program three years
old is becoming obsolete, and one six years old
looks stone-age.  A twenty-year monopoly for
anything in computers is absurd.
When I spoke to the American Bar Association
Science and Technology section, the moderator
asked the audience whether they saw a need for any
software monopoly lasting more than ten years.
Most said no.  Some of them said, "No, aside from
copyright." Some said, "No, not even copyright."
In other fields, a new technique may require
development--building one device after another
until you understand how to make the technique
work.  If a steel part works badly, and you think
copper might be better, you can't type "replace
steel with copper" and try it ten minutes later.
The need to recoup this cost of this development
is part of the usual argument for patents.
In software, an individual technique usually
doesn't need much development.  What we develop
are products that combine a new technique with
dozens of other techniques.
When a second programmer decides to use the same
technique, he will have to do just as much
development work as the first programmer--firstly,
because he's probably using a different
combination of techniques, and secondly, because
the first programmer probably kept the results of
development a trade secret.
The patent system is supposed to help by
discouraging trade secrecy. In software, patents
don't do this.  Today, just as in 1980, most
developers publish general ideas and keep the
source code secret.
The Kodak Photo CD shows how this can work.  The
general ideas used in the Photo CD are patented;
the details of the algorithm and data format are
secret.  Even twenty years from now, we will not
know how to read a Photo CD unless someone does
reverse engineering--and he will probably be sued
for copyright infringement.
To manufacture a physical device, you need to set
up a factory--a big investment.  The need for this
investment is one of the arguments for patents in
other fields.  But mastering a CD-ROM costs just
$1000.
Here is a copy of the compiler that I wrote with a
few friends.  This program is mainly the work of
four people.  Another dozen helped substantially
and others occasionally.  The two principal
developers were not working on this full-time.
This compiler and its output are probably being
used on more than a million computers today.
Major companies such as Intel and Motorola have
adopted it and now add to it.  The US Air Force is
funding extensions to it.  Many widely used
systems are compiled with it.
Just a few lines of code can be enough to infringe
a patent.  This compiler has ten thousand pages.
How many patents does it infringe?
I don't know.  Nobody does.  Perhaps you can read
the code and tell me.
I know of one patent it infringes.  I found it--
along with some near misses--in a list I saw by
luck.  I believe I have prior art for that patent,
but I can't be sure what a court would say.  I
don't dare tell you the patent number, because if
I were sued, I couldn't pay for the defense.  I
would lose by default.
An invalid patent is a dangerous weapon.
Defending a patent suit typically costs a million
dollars, and the outcome depends mostly on legal
technicalities.
I've had at least one patentable idea in my
career.  I know this because someone else patented
it years later.  It is a feature for using
abbreviations in a word processor.
A couple of years ago, the users of the word
processor XyWrite received a downgrade in the
mail.  XyWrite had an abbreviation feature; the
developer removed it when threatened by the patent
holder.
They knew about my earlier published work; why
didn't they fight the patent?  Sometimes a
business can't afford to have a lawsuit that will
drag on for years.  At those times, even if the
patent is invalid, you lose.
These patents are invalid because of luck.  It was
pure luck that these ideas were published by one
person before they were patented by another.  And
it was luck that the ones who published didn't
patent instead.
This is an important point: what is patented, and
what is not, is mainly a matter of luck.  When you
develop a large system, and you need to combine a
large number of techniques and features, whether
or not you can use each one is a matter of luck.
The carelessness of the Patent Office in dealing
with software is well known.  So some people
assume that, if the PTO does a better job,
everything will be ok.  They say that we should
wait while the invalid patents spew out, and
eventually the PTO will "understand software" and
do the job right.
There are two flaws in that suggestion: the PTO
will not do a better job, and it would not solve
the problem if they did.
Some years ago, a professor I know patented
Kirchhoff's current law, which says that the
electric currents flowing into a junction equal
the currents flowing out.  He did this to confirm,
privately, his suspicion that the PTO could not
handle the field of electronics.  He never tried
to enforce the patent, which has since expired.
(I will disclose his name if you give assurances
that he and his lawyer will not get in trouble.)
Kirchhoff's laws were formulated in 1845.  If the
PTO couldn't understand electricity after a
century, how can we expect it to understand
software in another decade or two?
Computer scientists look at many software patents
and say, "This is absurdly obvious."  Defenders of
the patent system reject our opinion. "You're
using hindsight," they say.  "You're more skilled
than the typical practitioner."  What we consider
obvious patents are not errors; they reflect a
different definition of "obvious".  It won't
change.
The most outrageously absurd software patent of
all covers using "exclusive or" (an operation of
Boolean arithmetic) to modify the image on a bit-
map display screen.
This technique is so basic that it was done with
*just one instruction* on the PDP-10 computer I
used in the 1970s.  I'm told this patent was
upheld twice in court.
When the PTO issues two patents for the same
technique, as it did for the LZW data compression
algorithm, that is surely a mistake.  These
mistakes can't be avoided because one technique
can be described in different ways.
It can take careful thought to see that two verbal
descriptions describe the same computation.
Mathematicians Atiyah and Singer once noticed that
the same computation appeared, with different
descriptions, in two branches of mathematics.
This led them to the Atiyah-Singer Index Theorem,
for which one received a presidential medal and
the other a knighthood.  The PTO expects an
examiner to compare an application with not just
one other thing, but everything known to man, in
just 17 hours (average).  Even if examiners were
geniuses like Atiyah and Singer, they couldn't do
this.
What if the PTO stopped making mistakes and issued
no more invalid patents?  That would not solve the
problem, because all *new* techniques and
features--those not known today--would be patented
just the same.
Suppose the PTO were perfect.  Suppose that it is
the year 2010 and you are a software developer.
You want to write a program combining 200
patentable techniques.  Suppose 15 of them are
new--you might patent those.  Suppose 120 of them
were known before 1990--those would not be
patented any longer.  That leaves 65 techniques
probably patented by others--more than enough to
make the project unfeasible. This is the gridlock
we are heading for.
Today's PTO mistakes are bringing us to gridlock
sooner, but the ultimate result is gridlock even
with a perfect PTO.
I've explained how patents impede progress.  Do
they also encourage it?
Patents may encourage a few people to look for new
ideas to patent. This isn't a big help because we
had plenty of innovation without patents.  (Look
at the journals and advertisements of 1980 and
you'll see.)  New ideas are not the limiting
factor for progress in our field.  The hard job in
software is developing large systems.
People developing systems have new ideas from time
to time.  Naturally they use these ideas.  Before
patents, they published the ideas too, for kudos.
As long as we have a lot software developement, we
will have a steady flow of new published ideas.
The patent system impedes development.  It makes
us ask, for each design decision, "Will we get
sued?"  And the answer is a matter of luck.  This
leads to more expensive development and less of
it.
With less development, programmers will have fewer
ideas along the way.  Patents can actually reduce
the number of patentable ideas that are published.
You will probably hear someone today raise the
issue of whether software "inventors" are
"entitled" to patents just like other inventors.
The answer is simple: like other inventors, they
are not entitled to patents at all.
Our Constitution rejects the idea of patents as an
entitlement. Patents and copyrights are justified
as a restriction on the public only for the sake
of the public--only for promoting progress.
Every two years, we elect our Congress.  We don't
ask who deserves to be win, because it's
impossible to deserve this, and that's the wrong
question anyway.  Instead, we ask which Congress
the nation deserves.
The same applies to patent policy.  We shouldn't
ask who deserves a patent, because it's impossible
to deserve this, and that's the wrong question
anyway.  The right question is how the policy
affects the public.  Do software patents "promote
the progress of science and useful arts" as the
Constitution requires?  Do they promote progress
enough to justify their cost--the imposition on
the freedom of individuals to use what they know?
A decade ago, the field of software functioned
without patents. Without patents, it produced
innovations such as windows, virtual reality,
spreadsheets, and networks.  And because of the
absence of patents, programmers could develop
software using these innovations.
We did not ask for the change that was imposed on
us.  There is no doubt that software patents tie
us in knots.  If there's no clear and vital public
need to tie us up in bureaucracy, untie us and let
us get back to work!
Responses to the specific questions posed by the
PTO:
1. The best definition for a "software patent" is,
any patent that  restricts the development of new
software.  Regardless of the form in which this
restriciton is expressed, the practical effect of
such a patent is to create an obstacle to software
development.
For the most part, the harmfulness of a patent
depends on the substance, not the form, of the
patent.  More precisely, the extent to which a
particular software patent impedes software
development depends on the class of programs it
prohibits.  A patent that covers a broad class of
programs, or that covers a vital function of
programs, is very harmful.  A patent that covers
fewer programs, or only obscure programs, is less
harmful.
A patent can be written in various ways while
still prohibiting the same class of programs.  The
most extreme example is that a patent written to
describe hardware can apply to software
implementations, under the doctrine of
equivalents.
As a result, new criteria for patentability, based
on the sort of distinctions that question 1 asks
about, would have little practical effect.
Forbidding patents of one form would encourage
applicants to use another form, with no change in
substance.
Solving the problem of software patents probably
requires changing the scope of patents rather than
the criteria for patentability.  More precisely,
the best solution is to exempt software
implementations running on general purpose
computers from patent law--so that a developer of
software for general purpose computers would ipso
facto never need to worry about patents.
Nonetheless, here are responses to question 1 as
it was asked.
1-A. A patent covering the implementation of a
particular algorithm on a general purpose computer
obstructs software development and therefore is
harmful.
In computer science there is no meaningful
distinction between "mathematical" and "non-
mathematical" algorithms.  Algorithms in general
are a branch of mathematics.
1-B. A patent that covers only special purpose
hardware implementations is not really a software
patent, in that it cannot cause trouble for
software development.
Reportedly patents written in this form actually
do cover pure software implementations, under the
doctrine of equivalents.  If this is true, a
patent of form B is equivalent in its effect to a
patent of form A, and is harmful to software
development.
1-C-1. If the program covered by the patent is
substantial, the patent would be narrower in
breadth than the copyright on the program it
covers.  This means the patent would be harmless
to people writing new software.  Hardly anyone
would apply for such a patent, since the copyright
lasts longer and exists automatically.
If the program patented is very short--perhaps
just a few lines--then a patent of this sort might
cause trouble for software development. The
practical effects of such a patent would depend
crucially on the precise interpretation of the
patent's scope.
1-C-2. The typical software patent of today has
this form.  These patents interfere with software
development.
A patent of this form covers a class of
algorithms--the class of algorithms that have in
common the specific steps or elements listed in
the patent.  It is ironic that patenting many
algorithms at once in this fashion is regarded by
many as less offensive than patenting a single
algorithm.
1-D. I do not see a difference in practical effect
between a patent of form D-1 and a patent of form
C-1; likewise for D-2 and C-2.  While a program
can be thought of as an abstract mathematical
entity, in practice it cannot be distributed or
used unless stored on a physical medium.
1-E. A patent on a data structure is harmful to
software development. It also directly harms the
users of software; they would have data bases that
they cannot read without infringing the patent.
In practice, a patent of form A or C or D can have
the same effect as a patent of form E.  For
example, the patents covering LZW compression
cover a computational process (that is to say, a
class of similar algorithms); however, no one has
found a way to produce the output of LZW except by
using the LZW algorithm.  The data format that LZW
produces is thus, in effect, patented.
1-F. This sort of patent interferes with software
development.
1-G. These patents interfere with software
development.
2. One of the programs distributed by my project
is an interpreter for the programming language
PostScript.  The revised "level 2" version of
PostScript specifies the use of a particular data
compression  algorithm known as LZW.  This
algorithm is patented, as a result of which we
cannot implement the full PostScript language.
It should be noted that the LZW algorithm has been
patented twice.  It was developed independently by
two groups of people, and there is good reason to
believe both groups would have published in
academic journals in the absence of software
patents.
We know of a superior compression algorithm that
we believe is unpatented, and for some purposes we
use the superior algorithm.  However, no other
algorithm can replace LZW for PostScript purposes,
because other algorithms produce different data
formats and thus do not interoperate with other
implementations of PostScript.
The code to implement LZW is approximately 0.2
percent of the PostScript interpreter.  The rest
of the interpreter is full of other algorithms,
data manipulations, and features, any one of which
might be patented (and perhaps some of them are).
It was difficult to find any data compression
algorithm of reasonable quality that was not
covered by a patent.  There are dozens of patents
in data compression alone.  Our first planned
replacement for LZW was killed off by a newly
issued patent, a week before the program's planned
release.  After another year and a half, we
finally found  an algorithm that seems not to be
covered by the patents that we know of.
3. The current system is leading to an explosion
of patents. Professor Merges of Boston University
reports that, based on the amount of software
business patent law firms seem to be doing and
their interest in hiring lawyers with knowledge of
software, the rate of filing of software patents
must be accelerating rapidly.  Each patent is a
landmine for software developers.
Eliminating patents from the field of software
would make it easy to develop software again.
4. The present patent system obstructs innovation
in the software field.  It appears that the
appropriate level of monopoly for software-related
inventions is none whatever; that level of
monopoly produced, through the early 80s, a high
rate of that sort of innovation without hampering
the development of software.
I have never been involved in a patent lawsuit.  I
have had to withdraw programs from use because I
knew of applicable patents for which I had no
prior art--this has happened twice in data
compression, as described above.
But main effect that I see is that there are
steadily fewer areas of software where I will be
able to develop in the future, due to the spread
of patents.  I forecast this effect when I hear
about newly issued patents; I don't need to wait
till I myself am threatened with them.
5. No additional form of intellectual property for
software is needed. The forms in use in 1980--
trade secret and narrow copyright--provided plenty
of incentive for commercial software development;
there is no public interest in having more.
However, a new form of intellectual property for
software could be an improvement if it *replaces*
all the forms that currently exist. Here is a
proposal for such a system:
* When a program is released to the public, the
developer is required to place the complete source
code in escrow at the Library of Congress, where
it is kept temporarily secret.
* The software is then trade secret and
copyrighted for four years. The power of this
copyright could be as strict as anyone wishes.
* Four years later, the program enters the public
domain, and the escrowed source code is released
by the Library of Congress, also in the public
domain.
* No other form of intellectual property monopoly
covers software.
This form of intellectual property is sufficient
to enable most software companies to make a
profit, because typically a four-year-old version
of a program is obsolete.  When version 1 of a
program enters the public domain, its developer
will be selling version 3 or version 4.  Version 1
as public domain software will not be much
competition for them.
A software company that has no new version in four
years is doing a bad job.  With this proposal,
that company might fail; but it is in danger of
failing under the present system also.  Besides, a
badly run business ought to fail; that is a
necessary part of free enterprise.
By contrast, successful software companies come
out with substantial improvements every year, and
they would be profitable under this proposal.
Robert Greene Sterne
Testimony for the USPTO Public Hearings
Regarding Statutory Subject Matter of Computer-
Related Inventions
January 27, 1994
San Jose, CA
Good afternoon.  I am Robert Greene Sterne.
My testimony represents my own views as an
attorney in private practice with over 15 years of
experience representing almost exclusively US
companies in high technology electronic and
computer intellectual property matters.  Based on
my experience in the trenches, I believe that US
companies of all sizes, particularly startups and
those creating leading edge technologies, are
served best by an intellectual property system
that provides a broad scope of protection and
strong enforcement remedies.
Having heard much of the testimony in these
hearings, I would like to state that I agree with
those speakers who have stated that technological
innovation is fostered by a broad scope of
intellectual property protection and by strong
enforcement of such exclusive rights.  I don't
want to re-plow this ground today.
Rather, I would like to focus on a few points
which I believe need further discussion so as to
round out the record for these hearings.
First, from a purely selfish professional
viewpoint (I say this purely facetiously), I
benefit financially from the uncertainty that
exists concerning patent eligibility for emerging
electronic technology, and from the complexity
that the present patent rules create.  Please, Mr.
Commissioner and other panel members, maintain
this lack of uncertainty and unnecessary
complexity at least until I put all four of my
children through graduate school.
Second, the panel seems to find war stories
helpful.  Let me give you one that I am involved
in concerning a startup who is in the process of
raising 100 million dollars.  Patent applications
are being written and product clearance studies
are being done which are absolutely critical to
the financing.  The venture capital people would
not feel comfortable in investing this money if
they did not believe that they were free of
intellectual property infringement and had an
excellent chance of obtaining broad patent
protection for this innovation.
This is not an isolated event.  More and more, the
financial community is requiring that the
intellectual property portfolio of a start up
electronic company be capable of providing a
proprietary position and be free of infringement
problems in order for necessary capital to be
raised.  As you know, startups and companies in
emerging areas of electronic technology create a
disproportionate number of new jobs in this
economy.  We need to protect this process through
a strong intellectual property system that will
encourage investment and creation of real wealth.
My experience is that without strong intellectual
property, the business community will invest in
less risky ventures outside of high technology
electronics.
Third, the case law and the patent office position
concerning so called "mathematical algorithms"
which, if found, create non-statutory subject
matter status for otherwise inventive electronic
technology, is illogical and pernicious.  No one,
and I repeat no one, in my opinion, either inside
or outside the patent office, can draw the bright
lines that the rest of the public believes should
be capable of being drawn concerning patent
eligibility as it relates to mathematical
algorithms.  This uncertainty is unnecessary and
totally unsatisfactory.
For example, when I debated your solicitor on this
subject before the Maryland Patent Law Association
last October, he stated that the law of
mathematical algorithms was so complex that even
he had to review the cases each time he had to
deal with the issue.
This uncertainty hurts innovation in this country.
On a substantive level, the alleged distinction
between patentable algorithm inventions and
unpatentable mathematical algorithm inventions
makes no sense in reality.  Every physical system
and process can be represented mathematically.  In
fact, that is how physical systems and processes
are modeled today in all industries using computer
aided design and manufacturing tools.  To say,
that a product or process made by man is not
statutory merely because the label "mathematical
algorithm" is stuck to it, begs the question
completely.  Furthermore, all one has to do is
pick up any two technical dictionaries and one
will find that there is no agreement as to what
the term "algorithm" and what the term
"mathematical algorithm" each mean.  So, in
addition to not reflecting what happens in the
technical world, there is the added problem that
there is no definitional certainty concerning
algorithm and mathematical algorithm.
The Patent Office has a duty to discharge its
constitutional mandate of promoting progress in
the useful arts by making sure that the definition
for statutory subject matter for electronic
technology encompasses anything and everything
under the sun made by man in this technical area.
Otherwise, critical emerging areas of technology,
such as, digital signal processing, voice
recognition, computer graphics, compilers,
multimedia, virtual reality, handwriting analysis,
encrypted communications, and information
retrieval, just to name a few, will be denied
patent protection despite, their innovation,
because a patent examiner or an infringer will be
able to stick the "mathematical algorithm" label
on an otherwise patentable invention.  You, Mr.
Commissioner, must make sure that the people
reporting to you seek a broad interpretation of
patentable subject matter in this electronics area
like that being given to biotechnology and other
emerging areas of technology.
Fourth, I often say that electronics is applied
functionality in the electronic domain.
Implementation of this functionality is merely a
design choice in most cases in terms of hardware
or software.  The choice of how to implement this
inventive functionality depends on many factors,
but it is the functionality that is the invention,
and one should never forget that.  We should stop
the endless debate of saying that hardware
inventions should be treated differently by the
Patent Office than software inventions.  The
alleged inventive distinction between hardware and
software is ludicrous to those in electronic
industry.  Furthermore, we have the same
definitional problem that we had with algorithm
and mathematical algorithm.  No one can agree upon
the definition of what is hardware and what is
software.  The reason for this is simple.  As the
technology evolves, the blurred boundary between
hardware and software implementation changes and
shifts.
Fifth, opponents of so-called software patents
argue that the patenting of software operates to
remove well known software inventions from the
public domain because the Patent Office does not
have an adequate database to properly examine
them.  The PTO needs to continue to enhance its
database in this technology, as well as in all
emerging technologies, but denying patent
protection for software inventions due solely to
database inadequacies is akin to throwing the baby
out with the bath water.  The examination process
needs to be improved, rather than restricting
statutory subject matter for computer related
inventions.
Let me offer a ready made solution: Rule 56.
Under Rule 56, Applicants must provide the Patent
Office with the best art of which they are aware.
Often, this art submitted under Rule 56 includes
non-patent literature.  This non-patent literature
in most cases is better than the patents contained
in the Patent Office database because patents, by
definition, are several years behind the technical
literature.  Thus, the Patent Office can
significantly enhance its search database by
feeding in the technical literature obtained under
Rule 56.
Sixth, you inquired in part A about claim formats,
and I will address them in detail in my written
submission.  Let me make only two high level
comments now.
First, claiming should be flexible.  The goal
should be to define the invention so as to fully
protect the inventor, while providing the
precision to the public that it critically needs
to determine whether or not they infringe.  The
present rigidity often exhibited by the Patent
Office in terms of specialized claim formats in
emerging electronic areas prevents one or both of
these goals from being met.  Let's stop putting
form over substance, and let's start putting
effective claim drafting back into the picture.
Let me give you one example.  The so-called
computer program product claim is critically
needed so as to allow the patentee to charge the
infringer with direct infringement where only
software is being sold on media or being
transmitted electronically over networks such as
the electronic superhighway.  The Patent Office
should be seeking ways to have these types of
claims made permissible, rather than engaging in a
bureaucratic exercise which is tantamount to a war
of delay and attrition in denying these types of
claims.
Seventh, your twenty year term proposal is
excellent.  But, it must be accompanied with a
rock solid commitment from the Patent Office to
significantly lower the pendency period of patent
applications.  Leading edge electronic companies
in this valley and elsewhere now operate on
product development cycles of 6 to 9 months.  That
is the time it takes from coming up with an idea
to releasing a product into the marketplace.  Our
firm prepares and prosecutes  around 200 US patent
applications on complex electronic technology each
year.  We know that it usually takes two to three
years to prosecute these cases through the Patent
Office.  This is too long.  If, Mr. Commissioner,
the Patent Office does not bring down this
pendency period, I predict that the electronic
industry will pull away from the patent system as
their product cycles continue to decrease.
Eighth, the patent system is of enormous benefit
to the electronic industry in encouraging and
protecting innovation in this country.  The
diversity of the US and our long immigrant history
provides a unique forum for the creation and
development of emerging technologies.  There is no
other country in the world that is a better
incubator for such creativity than the US.  US
startup companies and those in emerging
technologies must have strong intellectual
property protection and enforcement abroad in
order for them to compete effectively in a hostile
international marketplace which currently does not
provide a level playing field for them.
The patent system, through the creation of the
patent application, and the subsequent examination
of the claims, inherently forces needed line
drawing and needed disclosure of what is being
protected.  This precision makes it superior to
other modes of intellectual property protection.
By and large, the patent system is working well.
The process needs improvement and enhancement.
The Patent Office is doing a good job with the
resources it is currently being given, but it
needs more resources from the general revenues to
do the job better.
Thank you the opportunity to speak to you today.
[Testimony of Robert Greene Sterne,
February 10, 1994]
Thank you, Mr. Commissioner.
My name is Robert Greene Sterne and I am
testifying on behalf of myself.  I want to focus
on five specific issues which I believe need to be
explored further in order to round out the record
in these hearings.  These  five areas deal with
the preparation and prosecution of computer
related patent applications.
While my views are my own, they are based on the
experience of the ten members of my firm who
prepare and prosecute patent applications in the
computer area.  The experience base that is being
drawn upon encompasses literally hundreds of
original US cases.  I mention this because you
need to know the perspective from where my views
come.
First, I want to address whether program listings
or flowcharts or pseudocode or other specific
types of disclosure should be required in the
patent application for the software aspects of the
invention?  It is tempting both for practioners
and the Office to have very specific disclosure
requirements concerning software. But my view is
that it would be a mistake to establish specific
disclosure requirements.  Our experience is that
there is no agreement among experienced patent
attorneys or among software inventors concerning
what is the optimal disclosure strategy.
Moreover, as the technology races forward, the
disclosure strategies change based on our
experience.  The patent system is very robust
since it, unlike a sui generis system, can adapt
to rapidly developing technology in emerging
areas.  I understand that to reduce printing costs
and database costs the Patent Office would like to
limit certain types of listings, and that many
people believe that more higher level forms of
representation of the invention are more effective
in explaining the critical functionality and
architecture and operation of the software
invention.  I agree with these sentiments, but
believe that the system is better served by
maintaining the flexibility of allowing the
applicant to decide the best way of discloses the
invention in the patent application.
To amplify on this point, let me say a few things
about the technology that will support my view.
First, I agree with the opinion that machine code,
such as object code, does not aid in enabling one
skilled in the art to make and use the invention.
But I believe that source code combined with
adequate accompanying description is often
sufficient to satisfy the disclosure requirements
under Section 112.  This is particularly true with
computer programs written in higher level computer
programming languages, such as Pascal and ADA.  As
the computer programming arts progresses, computer
programs will be just as easy to read by humans as
english text.  In fact, it is the objective of
such computer programming languages to be human
readable.  Thus, it would be wrong for the Office
to adopt rules which would prohibit the submission
of source code.
Second, as an attorney in private practice, I am
very sensitive and aware of deadlines and budgets,
and I applaud the Patent Office's efforts in the
area of enlightened management, management by
objective, and total quality control.  These are
all good and encourage Examiners to utilize their
time in the examination process in the most
optimal way. However, I am quite concerned that
the very complexity of these state of the art
software inventions by necessity require more time
for examination that is being allocated by the
Office.  Examiners in these areas of technologies
should be careful supervised, and their
performance measured, like all other examiners.
However, the Office must make sure that it is
allowing them the time that they need to do a
quality examination job that the patent system and
the public requires.
Third, I applaud the efforts being made to hire
examiners with significant educational and work
experience in software technology.  This expertise
is absolutely essential for the Examination
process, and the patent system is very well served
by the Office raising the technical competence of
the Examining corp in the software area as soon as
possible.  Similarly, applicants for the patent
agents exam who have significant computer science
backgrounds should qualify to sit for the exam.
Computer science in this day and age should be
considered to be a sufficient technical expertise
to qualify to take the patent agents exam.  But I
agree with the sentiment expressed by some that
there is a broad range of technical training in
computer hardware and software from degrees from
different educational institutions.  Consequently,
both in terms of hiring examiners and qualifying
applicants for the agents exam the Office must
carefully examine the educational qualifications
of the individuals involved so that qualified
people are let into the system and people without
sufficient training are excluded.  By necessity,
this will require line drawing, but like many
areas of patent law the ability to distinguish the
shades of gray is the strength of the system.  In
other words, neither the approach of excluding all
computer science people nor the policy of letting
all computer science people in should be taken.
Fourth, our experience in prosecuting applications
on state of the art software related inventions is
that the Examination process in the real emerging
areas of technology is effectively being delayed
pending these hearings and the political
uncertainty over patents on this technology.  Mr.
Commissioner, you should be aware that we are
encountering situations in prosecution where
applications, in our opinion, are not being
allowed because the Examining Corp is afraid of
the political ramifications associated with
possible adverse publicity to the Office if
applications in these technical areas are issued.
This delay and uncertainty hurts the patent system
and American innovation.  These political forces
should be removed from the examining process and
the focus should be on examination and not on a
fear that the anti-software patent forces will
raise a great hue and cry over the issuance of a
particular patent in an emerging area of
technology.  Now, I don't want to be misunderstood
on this point.  In no way am I arguing that a
patent should be issued on an invention that is
too broad based on the prior art  or is non-
statutory based on a liberal interpretation of
Section 101.  But I am deadset against any type of
delay that is being caused by fear of issuance of
patent applications on patentable inventions
merely because they involve state of the art
software technology.
My fifth and final point concerns your database.
As other speakers have stated, one of the great
benefits to the public of patent protection for
software related inventions is that such
inventions, which in the past have been maintained
as trade secrets, will be disclosed to the public
so that others will not have to reinvent the
wheel.  This will be of great benefit to the
software industry.  As an aside, the software
industry in this regard is 180 degrees from what
happens in another emerging area of technology,
biotech, where the tradition is to publish or
perish and inventors oftentimes lose their patent
rights here or abroad though premature publication
of their inventions in the technical literature.
The biotechnology area clearly shows the benefit
of rapid disclosure of technology in that
competing researchers are allowed to rapidly build
on the work of others and not recreate the same
inventions.
Turning to the database problem involving the
examination of software related inventions, my
view is that this database problem is not
different that the problems encounter by the
Office in other areas of emerging technology, such
as biotech.  It is critical that the Patent Office
take all reasonable steps to create the most
robust database possible in these emerging areas
of technology, and to provide efficient and
economical access to this database to members of
the public both in Washington and in remote
locations.  The electronics superhighway being
pushed by this administration could form the
backbone for this remote access.  The patent
office should squarely embrace initiatives for
building the most comprehensive database possible
and for opening it up for ready access by members
of the public.  I know that this in practice is a
tall order and one that could be very expensive.
However, the benefits of providing a comprehensive
database appear to outweigh the cost.
Thank you for this opportunity.
Testimony of
Richard A. Jordan
Patent Counsel
Thinking Machines Corporation
245 First Street
Cambridge, Massachusetts 02142
Responsive to the Patent and Trademark Office,
Notice of Public Hearings And Request For Comments
On Patent Protection For Software-Related
Inventions, Docket #: 931222-3322
By way of background, Thinking Machines
Corporation was founded in 1983 to develop,
manufacture and sell "massively-parallel"
supercomputer systems.  Thinking Machines'
products are an outgrowth of research undertaken
principally by its chief scientist, W. Daniel
Hillis, while he was a graduate student at the
Massachusetts Institute of Technology.  Since
Thinking Machines announced its first product, the
Connection Machine Model CM-1 supercomputer, in
1986, the company has had excellent revenue
growth; its revenue from massively parallel
supercomputers is believed to be the largest of
any company.  However, it should be noted that its
revenue is much less than that of a number of
other companies in the computer industry, both
domestic and foreign, including companies in the
"traditional" supercomputer field as well as those
principally known for selling computers of more
conventional architectures, many of which are
developing products competitive with Thinking
Machines'.
Over the past several years, the computing power
of massively-parallel computing technology has
been emphasized by a number of awards relating to
Thinking Machines' technology.  Since 1990, the
Institute of Electrical and Electronic Engineers
(IEEE) has given its Gordon Bell award for
computing speed to several teams including
Thinking Machines employees for programs processed
on a Connection Machine supercomputer and for
compiler technology.  (A "compiler" is a computer
program that translates a program written in a
"high-level language," which is generally easily
usable by even non-programmers, into "low-level"
computer code that can be processed by computer
hardware.)  The importance of massively-parallel
computing technology has also been recognized by
articles in journals such as Scientific American
and newspapers such as The New York Times and the
Wall Street Journal.
A Connection Machine supercomputer achieves its
computing power through a combination of hardware
and software.  Unlike a conventional computer,
which uses one or only a few powerful data
processors on masses of data, the hardware of a
Connection Machine supercomputer includes tens,
hundreds or even thousands of microprocessors
which operate in parallel on relatively small
amounts of data distributed to them.  The
individual microprocessors are interconnected by a
data routing network which allow them to share
data as necessary.  The software effectively
coordinates the operations of the individual
microprocessors and the routing network to achieve
tremendous computing power.
While the hardware is important to the computing
power achieved by a massively-parallel computing
system, at least as important is the advancement
in software techniques.  Many advancements have
come in areas of development of parallel
algorithms and computing techniques, the pattern
of assignment of data to the processors to
minimize processing time ("obvious" patterns often
result in relatively poor processing times),
techniques for rapidly routing data through the
routing network, compiler techniques and the
development of high-level languages and compilers
therefor to make massively-parallel computers easy
to use.  Thinking Machines currently has a staff
in excess of 500, of whom approximately one-third
are involved in hardware and software engineering
development.  Of these engineers, only about
thirty percent are involved in what might be
traditionally referred to as hardware development,
while fully seventy percent are involved in
software development, including system software,
compiler development, software tools and other
software products.  In addition, a number of other
employees actively develop software in Thinking
Machines' large customer service group, developing
software techniques specifically for or with
customers.  It is manifestly evident that Thinking
Machines' software development effort represents a
very significant portion of its investment in
massively-parallel computing technology, and
Thinking Machines believes that patent protection
provides an important tool to help protect this
investment.
Thinking Machines further has an ongoing program
to encourage its developers to publish papers and
articles describing new parallel processing
techniques.  This provides information on new uses
for massively-parallel computing technology and
techniques, and also may help to enhance the
professional standing of its employee/authors
within their professions.  Published papers
represent divulgation of technology for which
Thinking Machines has provided often considerable
investment, and Thinking Machines believes that
patent protection can be an important tool to
protect this investment as well, particularly in
view of the substantial degree of competition
developing in the massively-parallel marketplace.
Thinking Machines, unlike some larger companies,
does not require that its employees' papers be
cleared, that is, scrutinized to determine whether
they describe technology which the company may
which to protect, before the papers can be sent
for publication, but it does actively file for
patent protection on technology to be described in
such papers.
Thinking Machines recognizes that computer
software is also protected by copyright, but it
believes that copyright will not provide the
degree of protection required to protect its
investment.  First, the scope of copyright
protection is far from clear, and has been made
less clear in recent years in view of the Second
Circuit's opinion in the Computer Associates case.
It is generally said that copyright protects the
"expression" of a work, and not its "idea."  While
these words are easy to say, it is very difficult
to apply them in practice.  Furthermore, the
application of 17 U.S.C. Section 102(b), which
exempts from copyright protection "any idea,
process, system, method of operation, concept,
principle, or discovery, regardless of the form in
which it is described, explained, illustrated, or
embodied" (emphasis added), further renders
uncertain the degree of protection provided by
copyright.  Much of the value in the program-
related techniques developed by Thinking Machines
is not in the detailed computer program code,
which is clearly protected by copyright, but in
the algorithms and programming techniques, for
which copyright protection is far less clear.
Similar ambiguities are not present in patent
protection.
Furthermore, patent protection is important in
view of the publishing by Thinking Machines'
employees as described above, which disclose the
algorithms and techniques to the world and
particularly to the competition, and in view of
the fact that copyright may not protect against
reverse engineering [see, for example, Vault Corp.
v. Quaid Software Ltd., 847 F.2d 255, 7 U.S.P.Q.2d
1281 (5th Cir., 1988) and NEC Corp. v. Intel Corp,
10 U.S.P.Q.2d 1177 (D.C. N.D. Cal., 1989)].
Accordingly, Thinking Machines believes that
patent protection for computer program-related
inventions is an important tool to protect its
investment.
That being said, Thinking Machines believes it
important that the patent system maximize the
likelihood that the patents issued are valid, that
the claims are directed to new, useful and non-
obvious technology in accordance with the
statutory mandate.  It does no one any service if
patents are issued that do not meet this statutory
standard.  While no one can reasonably expect that
any institution run by human beings will be one
hundred percent perfect, we believe that
enhancements can be made to improve the system.  I
might mention that, while we are here discussing
patent issues relating to computer software-
related inventions, these same problems can arise
in connection with computer hardware, and, indeed,
in any technology.  The problems may be
exacerbated somewhat in the software area, since
the PTO for a number of years was reluctant to
consider computer program-related inventions to be
statutory subject mattera reluctance that to some
extent continueswhich delayed its development of
a prior art database in this area.  However, there
is no industry in which all of the technology is
patented or otherwise published.
Several changes to U. S. procedure may be
appropriate to provide for early publication of
the applications.  This would have two advantages.
First, it would ensure more timely publication of
the technology, making it available to those
working in the industry.  A publication delay of
one to one and a half years after submission of a
paper is not atypical for engineering and
scientific journals, but for patents, particularly
for this subject matter, a much longer delay is
more typical.  With developments in computer
technology moving as rapidly as they are, the
patent disclosure after such a lengthy delay may
be somewhat less valuable as a source of technical
information.
Second, early publication can also operate as
early notification to others working in the field
of the potential issuance of a patent, allowing
them to factor that into their business decisions.
The potentially lengthy delays to patent issuance
under current practice in the United States means
that others working in the field would not be
notified that a patent application is pending that
may cover something they are developing until the
patent actually issues, which can be a number of
years after its original filing date, and perhaps
after much time and money has been invested in the
potentially infringing enterprise.
Third, early publication followed by an
examination in a more "contemplative" environment
than would be possible in the current push for a
reduction in the pendency period would provide a
better patent upon issuance.  For example, if a
patent issued on the original application within
the approximately eighteen-month pendency period
as suggested by the PTO, the prior art from
foreign patent offices would most likely not be
available for consideration by the U. S. Examiner.
Having this prior art is particularly important in
the computer area.  It makes for a more complete
examination and higher degree of confidence in the
validity of the patent.  Typically, such prior art
is not available until around 18-24 months after
the priority date, and an eighteen-month pendency
time would mean that the art would not be
available until just around the time the U. S.
patent would issue.  If the art were deemed
material and the application were still pending,
the applicant would likely have to file a
continuation application to get it considered,
which could delay issuance of the U. S. patent,
and publication of the technology, for an even
greater amount of time and require the additional
expenditure by the applicant of another filing
fee.  On the other hand, if the U. S. patent had
already issued, the only ways to have the art
considered would be by re-examination or reissue,
both of which can be costly.
In addition, the emphasis on a reduced pendency
time places undue stress on the Patent Examining
corps, which can have several undesirable
consequences.  From the immediate standpoint of
examination of particular applications, a reduced
pendency time could result in Examiners not being
able to give the applications due and careful
consideration, which is particularly important in
a complex art such as computers.  In addition, the
emphasis can have a deleterious impact on training
of new examiners, particularly in rapidly
expanding areas such as the computer arts.
These problems can be alleviated by a few,
relatively simple, changes to the prosecution
procedures in the PTO.  First, the PTO should
publish applications eighteen months from the
priority date.  This publication schedule would be
contingent upon the PTO providing a search report
some time prior to publication, to permit the
applicant to amend or withdraw the application
prior to publication.  In addition, following
publication, the applicant would be entitled to
recover damages for use of the invention after
publication but prior to issuance.  Examination
could then take place in a more contemplative
environment.  This procedure would give the
applicant some control over whether or not the
application should be published, based on some
knowledge of the prior art, and compensation for
use of the information after publication but
before issuance (the European "provisional
protection").  In addition, it gives the public
the benefit of the early disclosure of the
technology and the fact that a patent may issue
thereon.  Furthermore, it would permit a more
careful and thorough examination of the
application than is possible with the current
procedures, which would benefit both the applicant
and the public.
In addition, the public should be brought into the
process at some point, perhaps by way of an
opposition proceeding just before or just after
issuance.  This could have two advantages.  First,
secrecy breeds suspicion, and at least partially
removing the veil of secrecy from the proceedings
would remove some of the mystery involved in the
decisions made by the PTO.  Second, art used by an
opposer during an opposition may be useful in
enhancing the PTO's own prior art collection.
Oppositions must be conducted in strict adherence
to procedures and time frames, or otherwise they
could run on interminably, which also can be
difficult for business decision-making.  However,
it is not believed that providing for oppositions
with reasonable time frames would place an undue
burden on the prospective patentee's patent
rights, particularly if provisional protection
were provided the patentee.
Another way in which the system can be improved is
by holding on-going dialogues, such as these
hearings, to get input from the bar and others who
have interests in the patent system.  Wearing
another hat, I am also chairman of the Electronic
and Computer Law Committee of the American
Intellectual Property Law Association.  Our
committee leadership has, for several years, been
meeting twice a year, in the fall and spring, with
Group Directors and others in the electrical
examining groups to discuss issues of mutual
concern.  We expect to hold another meeting in
April at which we hope to discuss, among other
things, some of the issues raised by the notice
for these hearings.  An outgrowth of earlier
meetings was a program held last October, in
conjunction with the AIPLA's Annual Meeting, that
was extremely well attended by examiners from the
examining corps and by members of the AIPLA.   At
the program, a number of problems and practice
issues of concern to the examining corps and to
the bar were discussed in detail.  Each side, so
to speak, learned quite a bit of the problems and
perspectives of the other.  The program received
quite good reviews, and we hope and expect to have
more of them.
Reengineering the Patent Examination System
Remarks of D. C. Toedt
PTO Hearings on "Software Patents"
February 10-11, 1994
Introduction
Good morning.  My name is D. C. Toedt.
As requested in the Federal Register notice of
this hearing, let me summarize briefly for the
record my affiliation, the nature of the
organization with which I am affiliated, and the
principal areas of softwarerelated business of the
organization.  I am a shareholder and chairman of
the Patent Prosecution Practice Committee at
Arnold, White & Durkee, one of the nation's
largest intellectual property law firms, in the
firm's Houston office.  Much of my firm's practice
and of my own work relates to the computer
industry and in particular to software technology.
My remarks will be directed to Topic B, Question
6, which asked for suggestions for improving the
patent examination process. My remarks today are
directed solely to selected procedural questions
and not to any substantive patentability issue.
These remarks represent my own views and not
necessarily those of my firm or any of its
clients, nor of any other organization with which
I am affiliated. 38
Mr. Secretary, two weeks ago in San Jose you
announced that the United States would be changing
to a 20year patent term.  That change will make it
more important than ever to speed up the
examination system, and more generally to improve
it, so that patent applicants will not be
frustrated by the clock ticking away on their
potential patent rights before a patent is issued.
The Office has been moving forward in that regard
for some time and continues to do so. Many
practitioners have been very impressed with the
improvements in quality of the Office actions that
we have been seeing over the past couple of years.
We are also looking forward to the technological
changes that are underway in the PTO, which should
make life easier and more productive for everyone
involved in patent prosecution.
As you know, however, President Clinton and Vice
President Gore have announced their commitment to
"reinventing government."  Consequently, the
longterm challenge faced by the PTO is a broader
onethat of reengineering its examination
processes.39  The Office needs to be trying to
ensure, not just that is "doing things right," but
that it is doing the right things. I would like to
offer suggestions in that regard in three specific
areas:
	Borrowing LowEnd Patent Concepts from the
SecuritiesRegistration System:  First, the PTO
should look to the securities laws, and
particularly to the SEC's registration and
disclosure system, for some ideas about changes to
the examination process that might prove
beneficial.  In particular, the Office should
experiment now, within the existing statutory
framework, with an optional "low end" patent that
can be initially obtained without a complete
substantive examination proceeding.  An analogy
from the securities world might be an initial
lowend issuance of securities under Regulation A
that can be conducted in an SEC qualification
proceeding as opposed to a fullblown
registration proceeding.  Use of analogous
lowend patents would allow applicantsespecially
small businessesto obtain limited protection more
quickly while still preserving (for a limited
time) the ability to seek broader protection later
if warranted.  It would also allow the Office to
husband its substantive examination resources for
cases with greater potential market impact.
	Conducting "Administrative Trials" for More
Predictable Examination Timing:  Second, the PTO
should borrow some specific techniques from the
litigation process to handle its internal
scheduling and conduct of examination proceedings.
To make examination timing more predictable for
all concerned, the Office should experiment with
conducting its substantive examinations along the
lines of administrative trials.  Assistant
examiners would serve as "opposing counsel"
(analogous to junior prosecutors in a DAs office)
and primary examiners would serve as "judges."
The Office should also use scheduling orders for
examination proceedings so that all concerned will
be better able to plan around defined time
periods.
	Improving Incentives for PriorArt Searching
by Applicants:  Third, the PTO should enhance the
positive incentives for applicants to conduct a
thorough preexamination prior art search.  One
approach might be to modify the existing MPEP
procedures for petitioning for accelerated
examination so that special status and
headoftheline treatment is granted automatically
when a suitable search report is timely filed.
Another approach might be to charge a substantial
additional search fee to applicants who do not
document the performance of a suitable search of
their own.
Patent Enforcement Participants as the Key
"Customers"
As a prelimnary matter, I submit that any effort
to reengineer the patent examination system should
be organized around the needs of the patent
enforcement process.  In any reengineering
program, a critical question to ask is:  Who are
the "customers," and what do they use our
"product" for?  Whether or not an infringement
suit is ever actually filed over a particular
patent, the participants in the various aspects of
patent enforcementby which I include licensing
and designaround workare the real "customers" of
the patent examination system.  Consequently,
"litigation support," in the broadest sense of
that term, should be the top priority.
Potential Lessons from the Securities Laws
Similarities Between Patent Examinations and
Securities Registrations:  Why look to the
securities laws for ideas?  Because in some
respects, a company does similar things when it
files a patent application and when it issues
securities:
	In a securities offering, the issuer is going
to "the public" (broadly speaking) to obtain a
capital asset to help it in its business.  The
asset being sought is usually cash, or perhaps
other securities that are hoped to be convertible
someday into cash.
	Likewise, in a patent application filing, the
applicant is going to "the public," in the person
of the Commissioner, for a capital asset to help
it in its business.  Here, the asset being sought
is an exclusionary right that the company hopes
can be translated directly or indirectly into
cash.
The securities laws might therefore hold some
interesting lessons.  It would not be the first
time that the patent system had borrowed from the
securities laws:  The definition of "material
information" used in Rule 56 (prior to recent
amendments to that rule) was adapted from the
definition used in the securities laws.40
LowEnd SEC Registration Proceedings: The more
stringent securities registration proceedings
conducted by the Securities and Exchange
Commission are designed for offerings with the
greatest potential dollar value to the issuer and
with the greatest potential market impactpublic
offerings.  Most issuers, however, hold off on
publicoffering registration proceedings, and
instead do "low end" financings using various
exemptions from registration, until it is more
clearly advantageous to incur the associated
costs.
For example, under Regulation A as recently
amended by the SEC,41 a wouldbe issuer of
securities can elect to incur lower costs in cash,
time, and trouble by going through a
qualification proceeding, as opposed to a
fullblown registration proceeding.  To do so,
the issuer must be willing to settle for receiving
a lowervalue asset, in a limited offering that has
less of a potential impact on the capital markets.
In particular, the issuer must accept and comply
with a number of restrictions on the dollar amount
of capital it can raise, the amount of
solicitation it can engage in, the number and
types of investors it can accept, and so forth.
	Limited SEC "Merit Review":  A related point:
As I understand it, the fundamental philosophy of
the securities registration system is that the SEC
does not expend its resources on "merit review" of
individual securities offerings except when
enforcement litigation is necessary.  Instead, the
SEC and its staff have devoted a great deal of
effort over the years to developing:
	disclosure content requirements, which set
out detailed categories of information required
for various kinds of businesses and various types
of offerings;
	disclosure format requirements for different
kinds of offering documents to help the SEC staff
and other readers assimilate the information
quickly; and
	disclosure certification requirements, e.g.,
the requirement that financial statements be
certified or at least reviewed by independent
auditors.
The SEC staff (in Washington and/or the regional
offices) usually scrutinizes registration
documents in great detail, and may issue "Office
actions," but that process is intended primarily
to ensure that the documents appear to comply with
the applicable disclosure requirements and to be
internally consistent.
As a result, proposed securities registrations
proceed with what patent lawyers would regard as
blinding speed.  Moreover, the SEC's
substantivereview resources are conserved for the
enforcement situations in which they are most
needed and can have the most public benefit.
Existing PTO Initiatives:  It is encouraging that
the PTO is already starting to do some things like
this.  The Office already requires patent
applicants in certain fields to include some
standardized technological information, in
standardized disclosure formats, that are
appropriate to the field of art in question.  We
see examples of this in the regulations governing
nucleotide and amino acid sequence disclosures.42
The Office clearly recognizes that the same
concept might be viable in other art units as
well, as indicated by some of the specific
disclosurerelated questions set out in the Federal
Register notice of these hearings.
Suggestion:  Limited Examinations for "Low End"
Patent Applications:  More importantly, however,
perhaps the PTO should take a leaf from the SEC's
bookand stop trying to give the same level of
expensive scrutiny to every single one of the
thousands of patent applications that are filed
each year.  The Office should consider creating
one or more forms of "low end patents" that can be
initially obtained without a fullblown substantive
examination proceeding.43 That could free up
significant PTO resources, which the Office could
use to increase the level of scrutiny given to
patent applications that do get formally examined.
Possible Characteristics of LowEnd Patents:  We
can be fairly imaginative about the kinds of
lowend patents that could be tried.  It is
possible to envision a lowend patent that might
include some or all of the following features:
1.	A lowend patent might be granted quickly,
with comparatively little "merit review" by the
PTOperhaps on the basis of a satisfactory
independent search report and possibly an analysis
of references by the applicant, as in the present
procedures for petitioning for accelerated
examination.44
(In such an arrangement it might be a good idea to
give independent search firms and patent attorneys
some kind of explicit quasiofficial immunity from
thirdparty liability claims arising from alleged
deficiencies in their work.  Most search reports
and analyses would probably include warnings
against thirdparty reliance in any event.)
2.	Because a lowend patent would receive only a
limited examination by the PTO, the patent owner
might be required to assume the burden of proof of
patentability in any infringement litigation and
to waive the patent owners statutory right to
require a challenger to prove invalidity.45  Such
a burden of proof might be set at a reduced
preponderanceoftheevidence level (to offset the
risk of BlonderTongue collateral estoppel effects
if the owner is unsuccessful in carrying that
burden).
By far the majority of patents are never
litigated, and so the burdenofproof issue never
really arises.  Moreover, in many infringement
suits the patent owner puts on as much evidence in
support of patentability as possible anyway.  As a
result, putting the burden of proof of
patentability on a lowend patent owner might have
little practical impact.
3.	A lowend patent might have a comparatively
short term, perhaps seven to ten years.
4.	A lowend patent might be convertible to a
conventional "highend" 20year patent by filing a
request for formal PTO examination prior to some
date certain (e.g., expiration of the lowend
patent), subject to the existing twoyear time
limit for broadening reissues and associated
intervening rights.46
	The question of sameinvention double
patenting would need to be addressed.  Under the
existing statute and case law, however, the
Commissioner might have authority to prescribe
conditions under which a terminal disclaimer could
be used to address the perceived problems of
sameinvention double patenting, just as terminal
disclaimers can now be used in cases of
obviousnesstype double patenting.
5.	A lowend patent might be limited to a
comparatively few claims, perhaps five or six
total claims.
6.	A lowend patent might permit only a short
period of injunctive relief to give the patent
owner a head start in the marketplacesay, one to
three years against any given infringer.
7.	A lowend patent might limit the owner's
damage awards in litigation to a reasonable
royalty, perhaps with various caps on the
percentage or amount of royalties collectable from
any given infringer or over the life of the patent
(prior to factoring in any courtordered increased
damages, e.g., for willful infringement).
8.	To reduce the risk of unjustified patent
infringement suits, a lowend patent might require
the patent owner to pay the accused infringer's
costs and attorney fees if the accused infringer
prevails, unless the trial court finds that the
interests of justice require otherwisee.g.,
because the patent owner proves that it exercised
due diligence in determining patentability and the
likelihood of infringement prior to filing suit.
That might be coupled with an additional
requirement that the lowend patent owner put up a
suitable bond at the beginning of an infringement
action, similar to a removal bond for lawsuits
removed from state court to federal court,47 if so
ordered by the trial court.
Not all applicants would necessarily want to go
for a lowend patent. One of my colleagues who
practices primarily in biotech areas, however,
commented that some of her clients are unsure at
the time they file their patent applications
whether the eventual commercial value of the
invention will justify the cost. She speculated
that as a result, many such clients would be
delighted to accept the tradeoffs outlined above.
I suspect (but of course do not know) that many
other small and large businesses would feel the
same way.
Experimenting with LowEnd Patents Within the
Existing Statutory Framework:  Interestingly, the
Commissioner may already be able to experiment
with such concepts within the existing statutory
framework, via noticeandcomment rulemaking, for
applicants who wish to seek lowend patents.
Section 131 of the 1952 patent statute48 requires
that the Commissioner cause patent applications to
be examined, but does not appear to mandate
expressly that any particular level of PTO
investigation or substantive scrutiny be given to
patent applications.
The Commissioner thus might have the authority to
promulgate regulations, at least on an
experimental basis and perhaps even on a permanent
basis, to:
	create an optional lowend variation of the
existing statutory patent, by prescribing specific
duties and specific limitations on rights and
remedies that can be voluntarily accepted by
applicants who are willing to settle for such a
patent for the time being. For example, such an
applicant might be required to agree to carry the
burden of proof of patentability in infringement
litigation and to waive any right to injunctive
relief or damage awards as stated in the
regulations;
	permit an applicant who has filed a complete
patent application to file a written election
accepting the duties and limitations prescribed by
the regulations for lowend patents.  Such
acceptance could have the effect of a voluntary
waiver of statutory rights and remedies as stated
in the regulations.  The written election might
additionally be required to include a search
report by an independent search firm, and possibly
an analysis of references comparable to that
required for a petition for accelerated
examination;
	provide for a limited examination of the
application and writtenelection documents,
primarily for compliance with applicable formal
requirements, and for issuance of a lowend patent
if those requirements are met;
	deem the applicant's written election to
constitute a continuation application,49 with PTO
action on the continuation application being
suspended for a stated period of time;50
	permit the applicant to file a request for a
complete substantive examination of the
continuation application to seek a conventional
"high end" patent, prior to some date certain
(e.g., "expiration" of the lowend patent), subject
to broadening reissuetype limitations, intervening
rights, and any stated terminaldisclaimer
requirements; and
	deem the continuation application to be
abandoned as of the specified date certain if a
timely request for conversion to a highend patent
is not filed.
There are probably many other possibilities that
could be considered in this regard.  For example,
the experimental regulations might be able to go
even further in a procedural sense:  they could
provide that every patent applicant is deemed to
elect a limited examination and a lowend patent,
unless a specific request for a complete
substantive examination is timely filed.
Some of these possibilities might work, with or
without finetuning, others might not.  The
important point is that a onesizefitsall
philosophy was abandoned long ago in the
securities world.  It is time to think about
whether we should do the same in the patent
examination system to better serve the public.
Conducting Administrative Trials for More
Predictable Examination Timing
My second suggestion is that the PTO experiment
with conducting its substantive patent
examinations along the lines of administrative
trials.  That could help improve the quality and
speed of examinationsespecially if coupled with a
limitedexamination system for lowend patent
applications as discussed above.  Equally
important, it could make the workload more
manageable for examiners, applicants, and their
counsel.
The Problem of "File PingPong" in the Present
System:  In the present patent examination system,
Office actions usually arrive on busy attorneys'
desks without warning, sometimes after months or
even years of inactivity.  Equallybusy examiners
never know when a response to an Office action
might show up, or when a telephone call from an
attorney might be received, during the sixmonth
period before an application becomes abandoned.
Perhaps as a result of this state of affairs, one
might wonder sometimes whether some attorneys and
examiners regard the goal in patent prosecution as
that of getting the file off of one's own desk and
onto someone else's, instead of attempting to get
the client's project finished.  In any event, it
can be very difficult for attorneys and examiners
to plan or schedule the work that will be needed
to move an examination proceeding to a conclusion,
one way or another.
The Difficulty ot Getting SeniorExaminer
Attention:  Moreover, in many cases a
comparatively inexperienced assistant examiner
does the actual work of examination and of
drafting the Office actions that reject or allow
the claims.  The assistant examiner's decisions
technically are only recommendations to the
supervising primary examiner (SPE), who reviews
and signs all Office actions.
The SPE, however, may have a dozen or more
assistant examiners to supervise and thus is
usually especially busy.  As a result, if a
disagreement arises between an attorney and an
assistant examiner, the attorney may sometimes
feel as though it is difficult to get effective
attention from the SPE.
The Contrasts with Trial Work:  Lawsuits work much
differently.  In a lawsuit the parties know that
they will be set for a trial during what at least
nominally is some defined period of time.
Discovery periods and motion cutoff dates are
keyed to the trial date.  The parties and their
attorneys know that they have to plan their own
dockets so that they can finish their trial
preparation within those defined time constraints.
When a judge wants it to, a scheduling order means
what it says.  Anyone who has had a case here in
the famed rocket docket (the Eastern District of
Virginia), or in Judge Sam Kents court in
Galveston, Texas, can attest to that: You will get
your discovery finished, you will complete your
pretrial preparation, and you will go to trial, on
schedule.
During the trial, the parties, their counsel, and
the judge are focused on bringing the matter at
hand to a conclusion.  The parties also know that,
as a general rule, they had better take their best
shot during the trial, because they normally won't
get another opportunity.
Realigning the Examiners' Roles:  The PTO should
experiment with a similar litigationlike approach,
including a realignment of the roles of assistant
examiners and primary examiners.  In selected
applications and perhaps eventually in every
application:
	An assistant examiner should function as
"counsel" who develops and puts on a case against
patentability under the general tutelage of the
SPE.  An analogy that comes to mind is that of a
junior prosecutor in a DAs office, trying his or
her own cases under the general supervision of a
more senior assistant district attorney;
	A primary examiner should serve as a "judge"
who actually makes the decisions on patentability,
instead of continuing to do (with signature
authority) the very same job he or she did as an
assistant examiner.
Scheduling Order:  A scheduling order, possibly
issued by the SPE, should set out a comparatively
short period of time analogous to a trial
schedule.  During that time period, all
prosecution issues would be joined, all desired
evidence and arguments would be put into the
record, and a final decision on patentability
would be handed down, one way or the other.  Dates
certain should be set within, say, a one to
twomonth window for, e.g.:
1.	"discovery," i.e., the applicant's filing of
information under Rule 56 and the examiner's
issuance of a PCTstyle search report (without a
detailed written explanation of grounds for
alleged unpatentability);
2.	"pretrial practice," i.e., the applicant's
filing of any amendments, affidavits to antedate
references, expert affidavits, objective evidence
of nonobviousness, and the like.
The applicant's attorney and the assistant
examiner might also be required to file "proposed
findings of fact and conclusions of law," e.g.,
written analyses of the pending claims and the
cited references.  Examiners do this as a matter
of course already.51  Moreover, existing
procedures provide for attorneys to do two things
that are very similar, i.e., a response to an
Office action52 and a petition for accelerated
examination; 53
3.	"trial," e.g., a hearinglike interview with
the primary examiner, in person or by phone, at
which the assistant examiner and the attorney
argue their respective casesperhaps with some
participation by the inventor(s) or expert
witnesses. The interview might be taperecorded and
transcribed to preserve a written record;
4.	"decision," i.e., the primary examiner's
issuance of a firstand finalOffice action on the
existing record, including a detailed writeup (or
a transcribed oral decision) analogous to findings
of fact and conclusions of law; and
5.	"posttrial practice," e.g., a request for
reconsideration, to reopen the record, or perhaps
for a new trial, prior to any appeal from a
rejection.
	An approach of this kind would look very much
like familiar aspects of existing prosecution
practice (and also like an abbreviated version of
interference practice).  Some administrative
changes would be needed, e.g., to the examiners'
quota system.  Nevertheless, a number of potential
advantages would arise:
	The quality of many examinations would likely
go up, because more senior and experienced
examiners would actually be making patentability
decisions and because everyone involved would be
more focused on getting the project finished;
	Primary examiners would be freed up to do
what they do best, i.e., judging the patentability
of claimed inventions;
	All concerned would be better able to plan
their work around known trial schedules;
	Attorneys would probably spend less total
time on prosecution of particular applications
(but would spend it more effectively), thus
reducing the overall cost to clients;
	Assistant examiners would have a new
incentive to achieve primaryexaminer status, over
and above the opportunity to keep on doing the
same thing they have already been doing;
	Attorneys would have more opportunity for
meaningful interaction on the merits with a senior
examiner, i.e., the "judge";
	SPEs would be freed from the responsibility
of actually allowing or rejecting claims, and thus
could spend more time coaching the assistant
examiners, suggesting directions for prior art
searching, and other "team building" functions;
	Many examiners and attorneys would probably
find their work to be more interesting and
challenging.
It is difficult to predict what impact such
changes might have on the PTO's application
"throughput."  I suspect that throughput would not
sufferespecially if the some of the above
recommendations about lowend patents are adopted
and that it might even be improved.
Even if throughput did drop somewhat, the
potential improvements in quality, and the
attendant benefits to the "customers" in patent
enforcement and licensing, might be well worth the
tradeoff.
Encouraging More Exhaustive Searching by
Applicants
Under the present law, all material information
known to a patent applicant (or by his or her
attorney or certain others) must be disclosed to
the PTO.54  The Court of Appeals for the Federal
Circuit has held, however, that a patent applicant
generally does not have a duty to search the prior
art in connection with his or her application.55
Perhaps the law on that point should be explicitly
changed to impose such a duty, possibly by
noticeandcomment rulemaking by the Office.
The patent statute requires that an applications
claims particularly [point] out ... the subject
matter which the applicant regards as his
invention.56  Apparently it has always been
assumed at least tacitly that, for purposes of an
applicants presentation of claims, this language
refers to the applicants subjective perspective
about what he or she regards as his invention.  In
many other areas, howeverif not most areasthe
perspective used is nominally an objective one,
namely that of the hypothetical person of ordinary
skill.  For example, nonobviousness,57
enablement,58 and clarity of claim language59 are
all measured with reference to the view of the
hypothetical person of ordinary skill.
It is not apparent a priori that an applicant
should always be able to assert in a vacuum that
he or she subjectively regards [the claims
presented] as his invention.  It might be
desirable instead to use a more objective
standard, requiring such an assertion to include a
suitable disclosure of the factual background
against which it is madee.g., a priorart search
report.
Looking at the question from another angle:  The
Supreme Court has consistently taken a
Jeffersonian view that publicly accessible
technology is regarded as a community asset, and
that patent rights are a limited exception to that
general rule.60 When a patent issues, it operates
to prevent competitors and other members of the
public from engaging in what would otherwise be
lawful conduct.  A patent is not supposed to
issue, however, unless and until a determination
has been made that the conditions for
patentability are in fact met.  Making that
determination requires investigation; some might
argue that it therefore would not be unfair per se
to ask patent applicants to share in the burden of
investigation.
As a practical matter, however, priorart searching
probably should be encouraged but not made
mandatory.  If searching by applicants is
mandatory, then accused infringers can be expected
to raise inequitableconduct challenges on grounds
of alleged inadequacy of searching, even though
examiners perform their own independent searches.
Patent infringement controversies are complicated
enough already; we should be very sure about what
we are doing before we add to that complexity.
A better approach would be to provide affirmative
incentives for searching.  One way of doing so
might be to give automatic priority of
examination, without the need to file a petition
for accelerated examination, to applicants who
submit a facially acceptable search report.
Another way of encouraging searching might be to
require applicants who do not submit a suitable
search report to pay an additional search fee.
Such a fee does not appear to be expressly ruled
out by the patent statutes fee provisions.61  The
additional revenues from such fees might be used
to pay for additional fulltime or parttime
searchers working under the direction of the
Examining Corps.
Mechanical Suggestions
	I also have a couple of mechanical type
suggestions for consideration:
	An Office action should be organized so that
all rejections relating to a particular claim are
set out in together in a single section of the
action.  That will make life much easier on
subsequent customers who attempt to analyze the
prosecution history of a particular claim.  One
possible format for an Office action might be
something like the following:
1.	A quotation of all pertinent statutory and
regulatory provisions;
2.	A complete analysis of claim 1, including a
statement of all objections and reasons for
rejection of that claim under any statutory or
regulatory provision;
3.	A similar analysis of claim 2, incorporating
by reference the analysis of claim 1 to the extent
appropriate;
4.	Etc., etc., for each claim
	The legalsize front page of an Office action
should not be mailed to the applicants attorney.
Instead, the front page should be used as an input
sheet for the Offices word processing staff, who
should easily be able to generate a custom (and
thus shorter and easier to read) front page of the
actionon lettersized paperfrom the information
filled in or checked off by the examiner.
	All Office correspondence, including notices
of missing parts, notices of drawing deficiencies,
notices of allowance, etc., should be on one size
of paper.  Mixed paper sizes make Office
correspondence difficult to handle for attorneys
and secretaries (e.g., in making copies to send to
applicants) and additionally makes attorneys
files difficult to maintain.  If standard
lettersized paper is too short, then use A4 paper
or better yet, redesign the form or perhaps even
get rid of it.
Conclusion
Some or all of the ideas discussed above may need
finetuning, and some may even prove unworkable
upon further thought or in actual practice.  All,
however, should be fairly easy to try out in
lowrisk experiments. Unless some compelling reason
dictates otherwise, the Office should give them a
try.  If they work, great.  If they don't work,
then move on and try something else.
Mr. Secretary, many patent practitioners are
delighted that the PTO is reexamining the patent
examination system.  You have a wonderful
opportunity here to improve and strengthen the
role of patents and of the Patent and Trademark
Office in "promot[ing] the progress of science and
useful arts."  Thank you for the chance to
participate.
Remarks of Hans R. Troesch
January 26, 1994
Good morning.  My name is Hans Troesch.  I am
testifying on my own behalf.  My partners at Fish
& Richardson asked me to mention that.
Many years ago, I earned a masters degree in
computer science at the University of Michigan,
and for close to ten years, regardless of my
various job titles, I considered myself
principally to be a computer programmer.
Today, I am an attorney and a member of the patent
bar.  I practice patent, copyright, and trade
secrets law with the law firm of Fish &
Richardson, and I am a partner in the firm's
Silicon Valley office.
I am here because I would like to offer my views
on a few of the questions that the Patent Office
has invited the public to address at these
hearings.
As a preliminary matter, I must confess deep
concerns about the present fate of software
inventions in the Patent Office.  I believe that
the logical -- almost musical -- nature of
software technology provides unique opportunities
for advocacy and for confusion in a system that is
based on a more structural -- may I say sculptural
-- view of the world.  But that is not the topic
for today's hearings.  For today, I will merely
state my hope and belief that the Patent Office
will rise to the challenge of:
 finding and keeping qualified examiners,
 securing access to the vast body of software-
related prior art that is not of record in the
Patent Office, and
 developing the limiting doctrines of novelty,
obviousness, and enablement in ways appropriate to
the peculiarly flexible genius of software
technology.
On today's topic, it is my view that a computer
program --that is, a set of instructions that is
executable on a computer to achieve a result--
should be considered a "machine" within the
meaning of  101 of the patent statute and should
therefore be eligible for patent protection,
without resort to additional and often redundant
limitations to computer processors, read-only
memories, or data input-output devices.
On the issue of eligibility for patent protection,
I dare say such a change in the law would not
greatly expand the scope of protection available
to inventors -- at least not to those inventors
who can afford the kind of legal talent testifying
at these hearings.  Those of us who know what we
are doing can get software-related inventions
covered.  The process we have to go through may be
expensive, and painful to watch, be we can do it.
For that reason, I would promote my suggestion
principally as one that will improve the quality
of the analysis of software-related inventions and
the doctrines under which such inventions are
examined.
On the infringement side, we would have to be a
bit more subtle. If we allow claims to be made to
computer programs per se, we must not create a
risk of infringement by traditional print media
and their successors in today's world of
electronic publishing.  The publication for human
readers, on paper or otherwise, of a patent-
protected computer program, should not by itself
be any kind of infringement of the patent.
I would like to turn now to one of the specific
questions raised by the Patent Office for today's
hearing: what aspect of a mathematical algorithm,
implemented on a general purpose computer, should
(or should not) be protectable through the patent
system? I believe that a machine, made up of
computer program instructions, that usefully
transforms data (or information) should be
protectable under the patent laws in all its novel
and non-obvious aspects.  Given the importance of
information processing to our economy, it would be
perverse for us to continue to deny direct
protection to a technology that is so essential to
our information prosperity.
This leads me unavoidably to the questions of what
is novel and non-obvious in a computer program.  I
believe that our greatest challenge lies in these
questions, regardless of how we answer the
question previously posed.  For myself, and
contrary to what the law currently seems to allow,
I would not consider it novel merely to transpose
to a computer something previously known as being
done by hand, or in one person's head, or
collectively by a group of people.  But if a
method for transforming information is truly new,
then doctrines that limit or preclude patent
protection, solely because the method is a
computer program, seem unwarranted.  It has been
suggested that allowing mathematical algorithms to
be protected would remove laws of nature from the
public domain and give an unwarranted, universal
scope of protection to the patented technique.  I
find both rationales peculiar.  Taking the
computer programmer's informal definition -- that
an algorithm is a predetermined set of steps to
perform a function, and that a mathematical
algorithm is one that operates on mathematical
objects such as numbers, triangles, and
continuously differentiable functions -- then
granting protection for a new, previously unknown,
and nonobvious program of computational steps
withdraws nothing from the public.  And if the
patent reaches over a broad range of applications,
that would merely correspond to the broad
usefulness of the new algorithm.  In any other
technology, this would be grounds for praising the
inventor, not for denying protection.  I submit to
you, that if someone were to object to a patent on
the transistor on the ground that it would have
too many uses, we would find that objection
incomprehensible.
One final point that should be kept in mind before
one succumbs to alarm about the potential breadth
of claims to mathematical algorithms:  a naked
mathematical algorithm claim would seem to be the
ultimate in generic claims and therefore
particularly susceptible to being rejected or
invalidated, because any prior art that shows the
algorithm's steps being applied in any context
would invalidate the claim.  It would be a very
brave practitioner who would file a patent
application and rely solely on a naked algorithm
claim to protect his or her client.
In its Example question B, the Patent Office poses
the same question, but assumes the implementation
of the algorithm is limited to a special purpose,
rather than a general purpose, computer.  If the
problem is bad patents, this is not a solution. If
one begins with a computer program that should be
unpatentable because it is not new or because it
is obvious, one should not, in my view, be able to
achieve patentability merely by attaching to the
program the input-output devices that are
conventional for the process that the program
performs.  In other words, one should not be able
to save an old, obvious bread baking program
merely by attaching a digital thermometer to it.
Conversely, if the program is new and not obvious,
then the conventional addition of the necessary
computer hardware and other devices is redundant
to the claim, at least insofar as patentability is
concerned.  Such additional limitations would not
in fact limit the scope of protection available to
the inventor (unless, parenthetically, the claims
are poorly drafted).  But such a redundant
addition of apparatus to a program claim does
create a potentially substantial distraction for
the patent examiner, who in searching the art of
digital thermometers, may completely miss the
point about baking bread.
Finally, I would like to say a word about whether
a new form of protection for computer programs is
needed.  The word is "Why?" Patent law can deliver
predictability, definiteness, and uniformity.
Under copyright law, we cannot protect our ideas,
at least not without doing some violence to
traditional copyright principles, and we are
subject to forum shopping in 13 circuit courts of
appeal.  Under trade secrets law, we can protect
our ideas but are subject to the law as developed
in any of 50 different state courts and their
federal counterparts, and are never quite sure
what the protected ideas are, and are at risk of
having someone rediscover or reverse engineer our
inventions out from under us.  And while patent
law does have its drawbacks as mode of protection,
under the patent laws we can get warning of what
is protected, expressed with reasonable clarity,
and applied with national uniformity.  It would be
unfortunate if such a sound concept were to be
crippled because we were too slow in learning to
apply its fundamental principles to the challenges
of software-related inventions.
Thank you.
Remarks of Robert P. Sabath, President
World Intellectual Property and Trade Forum
PATENT OFFICE PUBLIC HEARING
26/27 JANUARY, 1994, SAN JOSE, CA
Mr. Commissioner, Mr. Kushan, my name is Robert
Sabath.
I speak today in both my capacity as President of
the World Intellectual Property and Trade Forum or
WIPTF (pronounced "Whip-Tiff") and as a solo
practitioner in the patent field.  I am also on
the Executive Committee of the California State
Bar's Intellectual Property Section, but as you
know, Mary O'Hare and Michael Glenn will testify
at these hearings on behalf of the State Bar.
Additionally, I speak as Legal Issues Editor of
Quick Time Forum, a multimedia developer's
publication.
The primary topic today is the use of the patent
system for the protection of software-related
inventions.  The central objective of my remarks
is to encourage greater flexibility within the
framework of the law in promoting the patenting of
software-related inventions as well as pure
software inventions.
Patents themselves are the best prior art against
subsequent applications for a patent grant.
Anything that artificially limits the development
of the body of prior art relied upon by the Patent
and Trademark Office has the effect of slowing the
progress of technology in critical fields.
Software is a key and strategic industry for the
U.S.  The efforts of the U.S. goverment to promote
U.S. trade interests abroad and even to advocate
changes in the intellectual property laws of other
countries are severely undermined, if U.S.
intellectual property laws and regulations fail to
encourage successes of key U.S. industries at
home.  One of such key industries is software.
I ask for your indulgence, Honorable Commissioner,
in addressing a slightly broader question than the
primary topic indicated above.
As a sole practitioner, I have come close to the
plight of the solo inventor affected by the
substantially increased PTO fees promulgated by
prior administrations.  Particularly the
maintenance fees are believed to be a disincentive
which may disuade individuals from even initiating
the process of obtaining patent protection.
But the cost of patenting which is borne today by
inventors, is softened in Silicon Valley by the
spirit of self help which has characterized the
American spirit since the days of George
Washington and Thomas Jefferson.
An example of this self help is the Sunnyvale
Patent Information Clearinghouse.
Self help and necessity have additionally spawned
in Silicon Valley a substantial venture capital
community which is selectively supportive of the
efforts of individual inventors.
The spirit of self help is shown by many local
firms and and entities which have opened offices
in Washington, D.C. and in surrounding communities
of Virginia and Maryland.
But self-help has its limits.
Therefore, we salute you, Mr. Commissioner and Mr.
Kushan for coming here to California.  We need
your help, not just with regard to improving the
laws and the regulatory environment as it relates
to patents, but also with regard to the
infrastructure in which the patent and invention
process plays itself out in the United States.
The U.S. government has facilities, buildings, and
courthouses throughout the nation.  These
facilities and buildings have many purposes.
Federal courthouses now hear patent law suits in
San Jose as well as San Francisco and in cities
throughout the country.  It is clear that our
country has developed elaborate mechanisms for
facilitating and resolving disputes between
litigants in patent law suits.
However, we have done pitifully little at the
federal level to enable the solo inventor to
search for prior art and effectively to limit the
scope of claims to fields of rightful entitlement.
Mr. Commissioner, we are accordingly happy to have
you here today, in this Convention Center.
As a minimum, the West Coast deserves a branch
office of the USPTO having at least search
facilities, to support the software, the
semiconductor, and the electronics industries that
have developed the infrastructure of the American
West so extensively.
Perhaps the availability of public search rooms
for inventors is not a matter for the Department
of Commerce, but rather for the Department of
Education.  But whether the Commissioner of
Patents and Trademarks takes the initiative or
whether another federal agency takes the lead, it
is clear that many communities in our country need
access to technical collections and patents of the
federal government.
The facilities for obtaining prior art in
Sunnyvale are clearly needed.
But in most communities of America such facilities
are non-existent.  Moreover, solo inventors are
seldom in a position to invest in state of the art
CD ROM systems and computer search services in
view of their high cost.
The information superhighway offers a bright
vision of a technological future.
Will there be facilities to provide public access
to information carried in this superhighway?
The patent office can provide such facilities to
bring the fruits of this superhighway of
information to our inventors, to the young in
America who thirst for knowledge and progress, and
to the public at large.
The physical facilities of the Department of
Commerce and the USPTO are needed in our local
communities to implement the purpose of serving
the intellectual property laws.
America wants to build its future by educating the
inventors of the future.  We need public search
facilities for the electronic arts whereever major
electronic developments are being made--in
California; in Austin, Texas; in Dallas, and in
Colorado, along with many other communities across
America.
We need biotechnology search facilities in
Emeryville, California and in Cambridge,
Massachusetts, and in many other communities of
the nation.
And we need software search facilities in the
nation's software development centers including
but not limited to such areas as Seattle and
Silicon Valley.
The German example shows that search facilities
and examination facilities need not be located in
the same cities.
The resources and facilities of the PTO should be
distributed at various locations across America to
provide public access to the prior art regarding
technological developments which have already
become known.
We salute you Mr. Commissioner for coming to
California to address the vital subject of
patenting software related inventions in this
public forum.  The California economy is
improving, but it remains disastrously
understimulated.  Because of the size of
California's economy, it can either drive or
hamstring recovery on the national scale.
The questions raised at this public hearing have a
direct and vital bearing upon the economic well-
being of California.  Thus we appreciate your
coming to guide these hearings.
To focus more definitely on the subject of
patenting software related inventions, it is my
belief and that of many participants in the World
Intellectual Property and Trade Forum that there
is no substitute for the development of an
increased body of software art available to patent
examiners.  With a properly classified and
complete body of prior art, the searching and
examination of new patent applications will be
enhanced.
WIPTF salutes the corrective action of the
Commissioner in connection with reexamination of
Compton's multimedia patent.
This reexamination process shows clearly that even
though applicable prior art was not initially
available to the Examiner, there are mechanisms
for addressing questions of patentability even
after grant of a patent.  But certainly it would
be optimal if the applicable art had been found
and addressed during actual examination.
One way to insure an effective and complete body
of prior art in the field of software patents is
to relax the policies of the PTO with respect the
patentability of mathematical algorithms.
Considerable room for relaxation is available even
within the bounds of current case law on the
subject.
Many new inventions beneficial to the developing
field of software may currently not even be the
subject of patent applications, because of the
chilling effects of the PTO's restrictive approach
to the patentability of software.
Insufficient software prior art limits the ability
of the PTO to examine effectively future software-
related patent applications, including pure
software patent applications.  The distinction
between hardware and software approaches to the
same problems has blurred technologically;  this
distinction should be blurred and eliminated in
the bureaucratic spaces of Patent and Trademark
Offices as well.
Patent examiners should rely less heavily on the
Section 101 as a basis for rejecting software-
related inventions.  With an increased body of
prior art established by greater flexibility in
allowing software-related patents, examiners will
be encouraged to make substantive office actions
based upon technical art, rather than merely
implementing policy articulated by agency
representatives.
One object of the patent system is to encourage
progress in the arts by publication of inventions.
The effect of patent grant is to add to the body
of detailed technical information comprised in
issued patent documents.  When a Section 101
rejection is successfully asserted by the PTO, the
practical effect is to deny future software
developers of the benefits of full patent
disclosure.
This hampers the development of new ideas in many
technical fields including multimedia software
generally, and even biotechnology, which is to an
extent dependent on progress in the field of data
systems for its instrumentation to be effective.
We thank you again Honorable Commissioner for
coming here and conducting these hearings.
The League for Programming Freedom
In favor of
o Free competition on the basis of competing
implementations
o Traditional "literal aspects" copyright doctrine
Oppose
o "Look and feel"
o "Software patents"
Activities
o Talk with public officials
o Work with companies
o Assist in court cases
o Publish articles
o Serve as a point of contact
Economics
	The patent system is an economic system
	It must be analyzed from an economic
standpoint
Different Industries
	Different industries have different economic
factors
	o Market size
	o Market structure
	o Extent of competition
	o Development costs
	o Production costs
	o Product life cycle
	o Value of products
	o Range of possible products
	o Amount of research
	o Research costs
	o Value of research
	o Scope to perform research
	o Rate of technical progress
	o Value of patent disclosures
	o Cost to "work around"
	o Imitation costs
	o Degree of novelty used
	o Anticipated legal costs
	o Other forms of intellectual property
	o Extent of non-patent incentives
	o Extent of other inventive activities
Economic Effects
	Every industry is different
	The impact of patents will be different
	In the software industry patents are harmful
The Software Industry
	The software industry is highly competitive
	Software patents stifle this competition
	Profits taken from firms adding significant
economic value
	Transfered to firms adding little economic
value
	Software patents distort the market making it
less efficient
Innovative Software
	Products not ideas
	So much to do; so little time
	Problem is not "new ideas"
	Problem is building real products
	o solving customer problems
	o reliably and easily
	o integrating well with other products
"Microcomputer revolution"
	o Microsoft
	o Novell
	o Borland
	o Adobe
	o Symantec
	o WordPerfect
	o Apple
	o Sun
	o SGI
	o Oracle
	o Sybase
Software Patents
	Software patents granted 1990 - 1992
IBM        500
Fujitsu     50
Lotus        7
Hitachi    400
HP          50
Novell       1
AT&T/Bell  150
Sun         50
Borland      0
DEC        150
Unisys      30
NeXT         0
Toshiba    150
Apple       20
Oracle       0
Sharp      100
Texas Inst. 20
Pyramid      0
Xerox      100
Microsoft   13
SGI          0
Canon       70
Intel       10
Sybase       0
Motorola    70
Matsushita   9
Symantec     0
Wang        60
Adobe        8
WordPerfect  0
Total software patents granted (1990- 1992):  5000
Entities with fewer than 5 s/w patents:
1000
Entities with 5 or more s/w patents:
60
The Solution
	The patent system is an economic system
	Every industry has different economics
	Software patents harm the software industry
The patent system must not be allowed to stand in
the way of economic efficiency
Software must be made non-patentable
1ALPHA, 146 Main St, Suite 404 Los Altos CA 94022, 415/965-0327
2Heckel, P,  The Elements of Friendly Software Design, Sybex
3 Id, page 260.
4 Refac v. Lotus and Octel Communications v. Theis Research.
5 The Licensing Executives Society of which I am a member sponsored a debated entitled
Are Patents and Copyrights Bad for Software.  Stallman and Kapor taking one position and a
patent lawyer the pro position.  When I asked as a member of LES asked to fill the fourth slot,
they chose another patent lawyer because Mr. Stallman didnt want to debate me.  Nor did the
find another software developer to debate for patents.  I mention the LES and Issues as two
examples of what appears to me to be a anti-patent bias in our establishment institutions that I
do not think should go unrecorded.
6 Heckel, P, Debunking the Software Patent Myths, Communications of the ACM, June 1992.
7 Heckel, P, The  Software Patent Controversy, Computer Lawyer, December 1992.
8 See my Testimony at the Public Hearings on Patent Law Harmonization, October 7, 1993,
also the Computer Lawyer Articles and ACM articles.
9	Stephen E. Siwek, Harold W. Furchtgott-Roth, Economists Inc., The U.S. Software
Industry:  Economic Contribution in the U.S. and World Markets (March 1993).  We have
submitted a copy of this study along with this statement.
10	See, e.g., LaBounty Mfg., Inc. v. U.S.I.T.C., 958 F.2d 1066, 1074 (Fed. Cir. 1992).
111	Lewis Carroll, Alice's Adventures in Wonderland, "The Walrus and the Carpenter",
stanza 6 (1865).
122	B.1. Do patents and printed publications provide examiners with a sufficient and
representative collection of prior art to assess novelty and obviousness of software related
inventions? If not, how can existing collections of prior art be supplemented to provide
examiners with a complete collection of prior art?
B.2. Can an accurate measurement of the ordinary level of skill in the art in the field of
computer programming be derived from printed publications and issued patents?
133	The Advisory Commission on Patent Law Reform, A Report to the Secretary of
Commerce, p. 147 (August 1992).
144	At least one effort to provide such a database is underway.  The Software Patent
Institute (SPI), a private enterprise organized in 1991, has taken on the task.  According to the
SPI Mission Statement published in March 1993, the SPI is "a nonprofit institution dedicated
to providing information to the public and to assisting the USPTO and others by providing
technical support in the form of educational and training programs and providing access to
information and retrieval resources.  The primary goal of the SPI is to provide the best
available information as to prior art in the software field for utilization by the public and the
US Patent and Trademark Office (USPTO).  In addition, the SPI will provide an educational
resource from which the USPTO and the public may obtain an enhanced understanding of
the nature of software, of software engineering, and of the history of the discipline and its
relationship to the patent process."
The SPI is believed to be assembling a "folklore" database, using the resources of the
Industrial Technology Institute of Ann Arbor, Michigan.  Data is being solicited from a
variety of interested parties, including computer and software manufacturers and publishers,
and independent software developers.  The database will be searchable on-line by subscribers,
including the USPTO, and should be in operation during first quarter 1994.
While the SPI is the only known organization currently attempting to provide a database of
software related prior art, it is this effort, and not the SPI specifically, that the IPO supports.
The resource is needed, whatever the source.
155	Advisory Commission Report, Recommendations XI-E, XI-F, XI-G and XI-H, pp.
158-67.
166	B.3. Should the PTO impose a special duty on patent applicants for software related
inventions to disclose information relevant to their inventions (e.g., one that is higher than
in other areas of technology)?
177	B.4. Do the standards governing novelty (35 U.S.C. 102) and obviousness (35 U.S.C.
103), as applied by the PTO and the Federal courts, accurately reflect inventive activity in the
field of software design and development?
188	B.5. Should implementing a known process, technique, system or method of doing
business on a computer be viewed as being novel and non-obvious if, but for the use of
software, the overall process, technique, system or method is well known?
199	B.6. In what ways can the PTO change examination procedures to assess novelty and
obviousness of software related inventions?  Should the PTO require patent applicants for
inventions related to software to conduct a search of prior art before filing a patent
application, and to include in their application copies of relevant prior art documents along
with a detailed explanation that points out how the invention claimed in the application is
distinguishable over the supplied references? [Note: This would make the "special
accelerated examination" practice described in MPEP 708.02 VIII standard practice for patent
applications on software related inventions.]
Given the difficulties associated with examiners assessing procedures from all fields of
technology that have been implemented on a software based system, should the PTO require
patent applicants to prove that their inventions are distinct over the prior art aside from the
implementation of the process on a computer?
Should the PTO be permitted to establish that a software related invention is not novel or is
obvious using a lower standard of proof than for other areas of technology (e.g., a standard
less than prima facie)?
2010	B.7.  What are the most effective ways to describe software (e.g., pseudocode,
flowcharts, etc.), and how can they be implemented through the disclosure requirements for
patent applications?
2111	B.8. What difficulties do patent applicants face in complying with existing disclosure
requirements (e.g., enablement, description, best mode) for software related inventions?
B.9.  Should the PTO require patent applicants to conform to a standardized disclosure format
for applications filed on software related inventions?
B.10.  How should the PTO handle the submission of computer program code listings?
Should the PTO require submission of program code listings?  Should they require
submission of code listings in machine readable format only? Should program code listings
be included in patent documents or should they be made available only through a publicly
accessible database?  What hardships would patent applicants face if these requirements were
imposed?
B.11.  Are current rules governing the submission of drawings impeding the effective
description of software related inventions, and if so, what changes should be made?  [Note:
Rule 96 (37 C.F.R. 1.96) governs the submission of computer program listings].
B.12.  What difficulties might patent applicants face if they were required to fully satisfy the
disclosure requirements of 35 U.S.C. 112, 1st paragraph (i.e., enablement, description, best
mode), without reliance on computer program listings?
22	Proposed acceptable formats for claims drawn to a computer program stored on a disk are listed in
the attached appendix.
	23Mr. Nydegger received his undergraduate education at Brigham Young University, graduating
cum laude with a Bachelor of Science in Electrical Engineering in 1974.  He received his Juris Doctorate
cum laude in 1977 from the J. Reuben Clark Law School at Brigham Young University.
	Mr. Nydegger has served as Chairman of the Electronic and Computer Law Committee of the
American Intellectual Property Law Association, and most recently, as a Member of the Board of Directors
of the American Intellectual Property Law Association.
	He also currently serves as an Adjunct Professor at the University of Utah College of Law, where
he has taught courses in Intellectual Property Law since 1988.  He has authored and co-authored a number
of articles in the field of electronic and computer law and has lectured on topics in that field in connection
with programs sponsored by the American Intellectual Property Law Association, the American Bar
Association, the University of Dayton School of Law, and the Practicing Law Institute.  He is a founding
shareholder, officer and director of the Salt Lake City firm of Workman, Nydegger & Jensen, which
specializes in Intellectual Property Law and litigation.
	241O'Reilly v. Morse, 56 U.S. (15 How.) 62 (1854).
25Dolbear v. American Bell Telephone Co., 126 U.S. 1 (1888).
26Id. at 534-35.
27  SPA's testimony focuses on Topic B - Question 1 of the notice published in the Federal
Register, namely "Do patents and printed publications provide examiners with a sufficient
and representative collection of prior art to assess novelty and obviousness of software-related
inventions?  If not, how can existing collections of prior art be supplemented to provide
examiners with a complete collection of prior art?"
28  Patent No. 5,241,671, issued Aug. 31, 1993, reexamination ordered Dec. 14, 1993.
29  The SPI Reporter 6 (Fall 1993).
30  Id.
31  Final Report, Advisory Commission on Patent Law Reform 157 (1992).
32  In 1989, SPA testified before Congress in support of the Computer Software Rental
Amendment Act, and in 1992 was closely involved in making copying computer programs a
felony under some circumstances.  This year, SPA testified before House and Senate judiciary
subcommittees to support the Copyright Reform Act of 1993 (H.R. 897 and S. 373), which
would advance equal access to the courts for every copyright owner and contribute to the war
on software piracy.
33  A recent survey by Price Waterhouse for SPA and other associations indicated that, of
over 900 responding companies, nearly 80 percent of software developers do not have any
patent protection, but that over 10 percent have filed patent applications.   Software Industry
Business Practices Survey 39 (1993).
34    17 U.S.C. 102(b).
35   Sections 102 and 103 of the Patent Act, 35 U.S.C.  101 and 103.
36  Advisory Commission Report, supra , at 159.
37  SPA is discussing similar programs for software examiners at the U.S. Copyright Office
and trademark examining attorneys at the USPTO.
38	I understand that the ABA's Section of Intellectual Prop--er-ty Law is plan-ning to submit
writ-ten comments on a num-ber of the substantive pat-ent-a-bil-i-ty issues being ad-dressed at these
hear--ings.  For the record, I was the chair of the committee that in-i-ti-a-ted the Sec-tion's
resolutions on which those comments are likely to be based, and I drafted the res-olutions
them-selves and the ac-comp-anying committee re-ports.
39	See gen--erally MICHAEL HAMMER & JAMES CHAMPY, RE-ENGINEERING THE
CORPORATION:  A MANI-FESTO FOR BUSINESS REVOLUTION (1993).
40	See generally 48 Fed. Reg. 5593 (1977).
41	See generally 54 Fed. Reg. 36442 (1992) (publishing final text of amendments to
Regulation A, 17 C.F.R.  230.251 et seq., to pro-vide wider opportunities for small businesses
to raise capital in qualified offerings as opposed to reg-istered offerings).
42	See generally BIOTECHNOLOGY INVENTION DISCLOSURES, 37 C.F.R. subpart G (1993).
43	A low-end patent of this kind would resemble in some ways the petit pat-ents and reg-
is-tra-tion patents found in the pat-ent sys-tems of some other countries.
44	See generally MPEP  708.02, paragraph VIII.
45	A patent shall be presumed valid. . . .  The burden of establishing invalidity of a
patent or any claim thereof shall rest on the party asserting such invalidity.  35 U.S.C.  282.
46	See 35 U.S.C.  251-252 (reissue provisions).
47	See generally 28 U.S.C.  1446(c) (procedures for removal, including bond
requirement).
48	The Commissioner shall cause an examination to be made of the application and the
alleged new invention; and if on such examination it appears that the applicant is entitled to a
patent under the law, the Com-mis-sion-er shall issue a patent therefor.  35 U.S.C.  131.
49	See 35U.S.C. 120
50	Cf. Suspension of action, 37 C.F.R.  1.103 (1993) (suspension of action by Office will
be granted for good and sufficient cause and for a reasonable time specified upon petition by
applicant).
51	See generally Rejection of claims, 37 C.F.R.  1.106 (1993).
52	The reply by the applicant or patent owner must distinctly and specifically point out
the supposed errors in the examiners action and must respond to every ground of objection
and rejection in the prior Office action.  Reply by applicant or patent owner, 37 C.F.R. 
1.111(a) (1993).  In amending in response to a rejection of claims in an application or patent
undergoing reexamination, the applicant or patent owner must clearly point out the
patentable novelty which he or she thinks the claims present in view of the state of the art
disclosed by the references cited or the objections made.  He or she must also show how the
amendments avoid such references or rejections.  Id.  1.111(c)
53	See generally MPEP  708.02, paragraph VIII.
54	See generally Duty to disclose information material to patentability, 37C.F.R  1.56
(1993).
55.	See FMC Corp. v. Hennessy Indus., Inc., 836 F.2d 521, 525-26 & n.6 (Fed. Cir. 1987)
(hold-ing that "[a]s a gen-eral rule there is no duty to conduct a prior art search" . . . but noting
that "one should not be able to cultivate ignorance, or disregard numerous warnings that
material in-for-ma-tion or prior art may exist, merely to avoid actual knowledge of that
information or prior art" and "[a]s-suming without deciding that there may be cir-cumstances
that would raise a duty to inquire").
56	35U.S.C.   112, second paragraph.
57	A patent may not be obtained . . . [if] the subject matter as a whole would have been
obvious to a person hav-ing ordinary skill in the art to which said subject matter pertains.
Patentability shall not be neg-atived by the man-ner in which the invention was made."
35U.S.C. 103.  Cf. also, Bausch & Lomb, Inc., v. Barnes-Hind/ Hydrocurve, Inc., 796F.2d 443,
447 (Fed. Cir. 1986) (noting that inventor's subjective belief of obvi-ousness, stated in
infringement litigation, was not dispositive), cert. denied, 108 S. Ct. 85 (1987).
58	See 35 U.S.C.  112 (requiring enabling, best-mode disclosure of how to make and use
in-ven-tion); see generally, e.g., In re Hayes Microcomputer Products, Inc., Patent Lit-ig-ation,
982 F.2d 1527, 25 U.S.P.Q.2d (BNA) 1241 (Fed. Cir. 1992) (affirming jury ver-dict of
infringement of pat-ent relating to modem guard-time escape sequence and re-ject-ing
enablement- and best-mode chal-lenge; "an in-ven-tor is not required to describe every de-tail of
his in-ven-tion").
59	See, e.g., Hybritech, Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1385, 231
USPQ 81, 94 (Fed. Cir. 1986), cert. denied, 480 U.S. 947 (1987).
60	See, e.g.,, Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 981, 984-85 9
USPQ2d 1847 (1989) (holding that state law prohibiting plug-molding methods of copying
unpatented boat hulls was pre-empt-ed by federal patent law, which implicitly establishes a
federal right to copy unpatented articles; state law may not interfere with publics right to
economic benefits of the most efficient way of manu-factur-ing un-patented articles).
61	See 35U.S.C.  41 (patent fees).