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Volume 1, Number 2        (c) 1993 Mark Voorhees

IN THIS ISSUE MATTHEW BENDER TAKES ON WEST PUBLISHING'S COPYRIGHT Publishers battle over whether page numbers of law reporters are protected

SCULLEY'S STATUS AS VICTIM RINGS FALSE PATENT OFFICE MAY ASK CONGRESS FOR PERMISSION TO PUBLISH PATENTS IN ADVANCE CRYPTOGRAPHIC CURVE BALL WITH DIGITAL SIGNATURES AND PKP Compton's multimedia patent:
PATENT OFFICE OPENS PANDORA'S BOX Notes from the frontier
SOFTWARE PATENTS ARE HERE TO STAY
Several suggestions for improvements emerge from California hearings

ENCRYPTION A HO-HUM AFFAIR SO FAR FOR CONSUMERS ----------Cut here----------

MATTHEW BENDER TAKES ON WEST PUBLISHING'S COPYRIGHT Publishers battle over whether page numbers of law reporters are protected

   It seems so silly_almost a joke_the notion that a company can hold monopoly control over such items as page numbers. But don't ever tell that to West Publishing Co. West takes very seriously, even religiously, its copyright on its federal reporters, including the page numbers. The Eighth Circuit only fueled West's ardency in the infamous 1986 decision, West Publishing Co. v. Mead Data Central, holding that pagination was indeed an element of West's copyright.

   West's bedrock faith in the inviolability of its copyright, however, is now under attack.

   Matthew Bender, a competing legal publisher, has filed suit in federal court in Manhattan seeking to weaken the West copyright. It wants a declaration that West does not hold a copyright on its page numbers or that use of the page numbers is protected by "fair use" doctrine of copyright law.

   Matthew Bender wants to publish a CD-ROM collection cases from the Second Circuit. It also wants to add West's volume and page numbers since many courts, in the words of its suit, require "citation to the volume and page number of the West federal reporter."

   A West spokeswoman says the suit is "totally unfounded."

   But life in the law of copyright is very different from the time of the Eighth Circuit ruling. That was BF, and this is AF. The F stands for Feist, as in Feist Publications, Inc. v. Rural Telephone Service Co., the 1991 case that removed copyright protection for the selection, coordination, or arrangement of the facts in the white pages of a telephone book.

   Last year, the 11th Circuit removed copyright protection from yellow pages. The Supreme Court last month declined to hear the 11th Circuit case, despite West's plea, as a friend of the court, that it take the case.

   The Feist case rejected a line of cases that supported "sweat of the brow" copyrights. If you work long and hard enough at a task, the theory went, your efforts deserve to be protected by the monopoly grant of a copyright.

   Writing for a unanimous court, Justice Sandra Day O'Connor instead fell back on more traditional copyright jurisprudence, which rewards only creative expression, not hard work. Viewed from that angle, the creation of page numbers seems about as expressive as a door knob.

   O'Connor's decision repeatedly cited a law review article, written by professors Craig Joyce and L.R. Patterson, that harshly criticized the 8th Circuit West decision. It has always been a source of speculation whether O'Connor was subtlety refuting the 8th Circuit finding.

   In congressional testimony, Joyce has said that the West decision was "a classic case of consequentialist reasoning: in substance, the court concluded not that West was harmed because it had copyright protection but that it had copyright protections because it was harmed."

   West and Mead eventually settled their suit. The settlement is secret, but Mead can now use the page numbers. It isn't known how much Mead pays for that right.

   The growing popularity of CD-ROM as a method for data storage casts a dark cloud on West's horizon, if it cannot protect its page numbers. One CD-ROM disc holds the equivalent of 150,000 pages of text. It is also easy to conduct key-word searches on CD-ROMs. Unlike such on-line services as WESTLAW or LEXIS, users don't incur access and printing charges.

   If competitors, like Matthew Bender, are able to cite West's page numbers, they can offer a space-saving alternative to the vast racks of law reporters.

   In its complaint, Matthew Bender says it has collected slip opinions from the government and then converted them into digital form through scanning and retyping. Bender next wants to insert the West page numbers. It would not add the case synopses, headnotes or "any copyrightable material," the complaint says.

   Nonetheless, "West has threatened to initiate suit" if Bender includes the page numbers. Last year, West sued a Florida company, alleging that it converted its reporters into CD-ROM format for sale.

   Ironically, the first U.S. Supreme Court copyright case, Wheaton v. Peters, involved Supreme Court law reporters. The 1834 case found that those reporters were not covered by a copyright.

----------Cut here----------

SCULLEY'S STATUS AS VICTIM RINGS FALSE    John Sculley wants everyone to believe he is a victim of foul play, but it ain't necessarily so. Sculley acted foolishly and hastily in becoming chief executive of Spectrum Information Technologies.

   He's doing it again by filing a $10 million suit against Peter Caserta, the Spectrum executive who recruited him. It's time for the former chief of Apple Computer to look forward and forget the folly of the past.

   Sculley sued Caserta in the southern District of New York on February 7, the same day he quit Spectrum, leaving behind the stack of stock options, now under water, that drew him to the small wireless communications company. Spectrum's patents on wireless data transmission were the other stack of drawing cards.

   Sculley claims Caserta duped him by not disclosing during employment negotiations a plank of bad news about the company. Sculley accepted Caserta's assurances that everything was okay and joined the company October 18, 1993.

   Caserta may have been dishonest, but Sculley should have known better. Let's go to the videotape:

   One of Sculley's main complaints was Caserta's failure to inform him of accounting practices that recognized licensing revenues before it was received. If Sculley had done his homework, he would have at least suspected that Spectrum was pushing the envelope. Here's why:

   Sculley began negotiating with Caserta in October. Two months earlier, Spectrum disclosed its accounting practices to the Securities and Exchange Commission.

   The company told the SEC that its fiscal first quarter earnings of $447,000 included "the accrual of the non-refundable licensing fees of $3,200,000 to be paid by AT&T, Megahertz, and Apex Data for the use of the Company's patented technology." (Emphasis added)

   In plain English, that means Spectrum was recording future revenue as income. The accrual of future revenues in itself is not so unusual. But here's the killer: Spectrum also disclosed that it was recording $2,750,000 in liabilities to reflect marketing payments Spectrum would make to its licensees. The payments would help the licensees publicize Spectrum's technology.

   So while Spectrum was recording as today's income tomorrow's future payments, it was shoving tomorrow's linked obligations onto the balance sheet, where they would not interfere with today's earnings. Accounting symmetry suggests that linked events should be treated similarly.

   The company engaged in the same practice in the second quarter, which ended September 30, and was reported to the SEC November 15, after Sculley's arrival.

   Sculley says he was unaware of the accounting until a Bloomberg news report in early December. But the Bloomberg report was based solely on the two SEC reports.

   On the advice of new auditors, the company has restated earnings for those two quarters to show a $5.3 million loss rather than a $1.1 million gain.

   A spokesman for Sculley says he devoted most of his due diligence on the validity of Spectrum's patents. "He relied on Caserta's word" for much of the rest of his pre-employment investigation.

----------Cut here----------

PATENT OFFICE MAY ASK CONGRESS FOR PERMISSION TO PUBLISH PATENTS IN ADVANCE    The U.S. Patent and Trademark Office is considering recommending to Congress that patents be published prior to their issuance. That seismic change would allow the public to point out weaknesses in patents before issuance rather than afterward in lengthy court battles.

   Ruth Ford, a patent office spokeswoman, confirms that the recommendation is under consideration by Commissioner Bruce Lehman. Lehman is considering several changes to bring the patent office in touch with the modern world, but none would be so radical as pre-publication.

   In the United States, unlike many other foreign countries, patents are secret until issued. After issuance, they are hard to overturn in court because they carry a presumption of validity.

   Pre-publication may allow fewer bad patents to emerge. It also could bog down an already overburdened office in a procedural overload. It is commonly assumed that pre-publication would take place 18 months after submission.

   Lehman is also considering changes to the re-examination procedure, in which patent owners, third parties, or the office itself can submit prior art to buttress or tear down an existing patent.

   The re-exam process currently favors patent owners and is rarely used. But changes in the process could obviate the need for pre-publication.

----------Cut here----------

CRYPTOGRAPHIC CURVE BALL WITH DIGITAL SIGNATURES AND PKP    The Administration threw Public Key Partners a curve ball earlier this month when it announced that a proposed digital signature standard would be royalty free.

   PKP has been working with the National Institute of Standards and Technology on a standard that would provide a royalty to PKP. PKP holds most of the important cryptographic patents in the country and is in the business of collecting royalties and licensing fees on them. The proposed government standard is based on two patents owned by PKP.

   Digital signatures would allow parties to sign documents electronically with the same surety now reserved for print documents.

   In a proposal already published in the Federal Register, PKP would receive about $1 a year from users of the proposed Digital Signature Standard. Now that the government wants that standard to be free for end users, PKP and the government are back at the negotiating table. One solution is for the government to pay a fee to PKP. Industry prefers a digital signature standard known as the RSA algorithm, which is in wide use, over the government's proposal. PKP also owns the patent on the RSA algorithm.

----------Cut here----------

Compton's multimedia patent:
PATENT OFFICE OPENS PANDORA'S BOX Beware the law of unintended consequences:

   Patent commissioner Bruce Lehman may be doing the right thing by ordering a re-examination of a controversial multimedia patent. But he has also opened a trap door into which all sorts of proper patents_and the patenting process itself_may fall.

   The patent in question, of course, is the so-called Compton's NewMedia patent. An announcement of its existence at the fall Comdex computer show in Las Vegas created such a fuss that Lehman re-opened the case.

    Re-examinations are rare birds. There have only been 80 such inquiries ordered by a commissioner since 1982 out of a million or so patents issued, and most of those were caused by a wayward examiner used a supervisor's stamp to approve patents without authority.

   Despite the odds, Lehman may be correct. His staff has unearthed several examples of prior art, including a best-selling computer book, that could kill the Compton's NewMedia patent before it hatches any eggs for its owners. The Tribune Co., one of the owners, had been squawking that it deserved royalties from competitors on such multimedia products as CD-ROM encyclopedias. Royalties would range from 1 to 3 percent and could apply to companies like Microsoft, which are actively entering the CD-ROM business.

   The patent covers techniques to search through databases holding text, pictures, animation, and audio clips. It is almost like a road map through the interactive media and multimedia kingdom that everyone would have to buy before entrance.

   No company wants to pay an entrance fee to a competitor, putting itself immediately at a cost disadvantage. But critics say that the patent is old hat and that the subject matter was covered thoroughly in Danny Goodman's book, "The Complete Hypercard Handbook," published in 1987, two years before Compton's New Media.

   The handbook, which has sold 400,000 copies, teaches Macintosh users how to work with the Hypercard programming and development language.

   If the patent was issued improperly, Lehman may have saved all parties_ including Tribune Co. and Encyclopedia Britannica, the other owner_the time, expense, and aggravation of expensive litigation.

   But, in the process, Lehman has exposed himself to perception that he can be bought off by public pressure. He may have undermined his other efforts to explore the relevancy the two-century-old patent system.

   Ruth Ford, a patent office spokesman, says Compton's is an exception. "Will we respond every time they hold a war council in Los Vegas? No."

   The re-exam is simply one of several efforts by Lehman to expose the office to the disinfectant of public scrutiny and access. In the old days, Ford says, patent commissioners met privately with the captains from large business. "It was a star-chamber affair," she says.

   The U.S. Patent and Trademark Office is not a semi-autonomous unit of government, like the Federal Reserve system, but it has often acted that way. The office, located in suburban Virginia, has not been prone to the same sort of political jawboning exercised by the alligator-shoe and cellular-phone crowd across the Potomac in D.C. However ineptly and awkwardly, the office has tried to fulfill its constitutional mandate to promote the "progress of science and the useful arts."

   If the focus of the office switches from prior art to public response, the consequences are easy to imagine. "Every important patent will now be subject to political pressure," says one patent lawyer. "And all important patents are controversial."

   Ford responds that Lehman initiated the Compton's re-exam on his own initiative. For all the criticism of the patent, nobody submitted prior art or requested a re-exam, she says.

  The Compton's NewMedia patent certainly falls within Lehman's zone of interest. He recognizes and has responded to criticisms that software patents are diluting the creative juices of developers. Lehman, for example, has held hearings on software patents and chairs a governmental working group exploring intellectual property along the electronic highway.

   Lehman also recognizes the link between intellectual property and economic development, which is so clearly revealed through the Compton's New Media patent. If Compton's, a unit of the Tribune Co., is able to demand tolls from every user of multimedia applications, it could dampen that growing market. It is hardly surprising then that this patent came to Lehman's attention or that it has come to symbolize all that is supposedly wrong with software patents generally. "There was a harmonic convergence of events," Ford says.

   The U.S. Supreme Court did not even recognize software patents until 1981. In the thirteen following years, several murky areas have arisen.

   Algorithms are not patentable, for example. Yet there is no bright line separating the underlying math, which doesn't qualify for protection, from the useful process, which does. A clever drafter might easily make the former look like the latter.

    Likewise, most software is incremental and derivative, and yet some of the recent controversial patents purport to cover "core" processes. "Let's not patent a device that captures rodents," says Goodman, whose best-selling Hypercard book will play a key role in the Compton's New Media re-examination.

   On a practical level, software development is often not well documented. There is not a rich heritage of technical journals and bulletins, as in the manufacturing world. Indeed, many advances are preserved as trade secrets.

   Finally, there are often many ways to achieve the same result. In many cases, there are both hardware and software solutions. With so many ways to skin the same cat, searches for prior art extremely tedious.

   For all the difficulties in defining, describing and limiting software patents, the industry has hardly missed a beat since the 1981 Supreme Court ruling. It is among the fastest growing sectors of the U.S. economy, generating $36.7 billion in annual sales. U.S. firms also dominate the international markets, where patents are even harder to protect.

   IN THE BEGINNING . . .    For better or worse, the Compton's New Media patent will be re-examined in the context of this uncertainty, debate, and turmoil. It is the worst of times, from an owner's perspective, for a patent to go through a dissection.

   The starting point for any patent is the invention, which in this case was Compton's Multimedia Encyclopedia published in 1989 by Compton's New Media, then a unit of Encyclopedia Britannica. The company says the product was the "first electronic encyclopedia to integrate pictures, sound, motion, and multiple entry paths."

   On October 26, 1989, Encyclopedia Britannica filed a patent application on behalf of its multimedia subsidiary to cover the underlying technology of the encyclopedia. The invention went far beyond what was then available in the CD-ROM world, the application stated. There was no other product that could search so easily and flexibly for graphics, text, and video clips in so many different ways.

   The inventors took pains to note that the anticipated patent was not limited to encyclopedias but could cover "any information that can be stored in a database." They were bucking for a piece of the action on virtually any multimedia storage and retrieval device.

   Almost four years later, on August 13, 1993, the inventors received manna from heaven when a patent was issued. Although the language was completely re-written in places, the general scope of the patent was intact. Within a month, the Tribune Co. bought Compton's Multimedia Publishing Group, a CD-ROM publisher focusing its catalog on reference, educational, and entertainment works.

   Not sufficiently prescient to recognize the impending controversy, Encyclopedia Britannica retained a half interest in the patent.

   Compton's NewMedia executives waited several months until the Comdex computer show in November to spring their invention on the masses. Expecting to be greeted as visionaries, they were instead ridiculed as highway robbers, trying to extract tolls at gun point from CD-ROM sales. It is difficult to pick up a computer magazine today without reading at least one jeremiad directed at Tribune Co. for its arrogance.

   By mid-December, the uproar was so deafening that Lehman ordered the re-examination. Gerry Goldberg, the head of the unit that approved the patent, has assigned Archie Williams, a respected, senior examiner, to oversee the second look.

HEAVY HITTER    Tribune Co. has brought in its own heavy to help out with the re-examination: D.C. Toedt, one of the nation's leading software patent lawyers, and a partner at Houston's Arnold, White & Durkee. Britannica continues to use Dickstein, Shapiro, the firm that prosecuted the application, for the re-examination, which will likely take several months.

   A re-examination is similar procedurally to a patent application. Tribune Co. and Encyclopedia Britannica have until mid-February to submit material in support of the patent, if they choose. Unlike in a court case, the claims of the patent don't carry a presumption of validity.

    Afterward, examiner Williams will issue an "office action," which the patent owners can challenge. Williams will then issue a second office action, which generally is final. If he rules that all of some of the claims are invalid, Tribune Co. and Encyclopedia Britannica can challenge the action, first to an appeals board and then the Federal Circuit.

   This re-exam, however, is like few others. Normally, outside parties cannot submit prior art unless they themselves had requested the re-exam, which requires a $2,250 filing fee. Lehman, however, has decided to accept outside any submissions that come over the transom.

   It is in keeping with the history of the Compton's NewMedia patent that things not go according to plan. This patent is proof the saying that nothing succeeds as planned.

   Any patent is defined by its claims_in this case 41 separate statements that comprise an infringement checklist. The broadest claim of the bunch is the first one and also the one that has been the focus of the most scrutiny.

   The claim covers a computer search system that is able to retrieve both text and graphics from "a plurality of entry path means." In other words, a user can search for text by, for example, clicking on a picture, or search for pictures by scrolling through text.

   The remainder of the claims embellishes and refines the broad brush of the first one. There are claims covering spell checking, a thesaurus, different search methods, and different entry methods. A user can enter through an atlas path, a history timeline path, or a picture caption path. You get the picture.

   If the invention and claims are the bookends in the life of a patent application, the file history is its biography. The history comprises the original applications and all amendments, rejections_and even summaries of interviews. Two things are striking about the three-inch-thick file history of the Compton's NewMedia patent.

   First, this patent did not slip through the cracks. It was rejected three times, two times more than normal, before even a single claim was approved. Second, far from revealing the patent office at its worst, the history shows the diligence of the reviewing examiners.

   They discovered more relevant prior art than did the Dickstein, Shapiro & Morin lawyers for Encyclopedia Britannica, even though some of it was late in the game. And they dutifully worked with the Dickstein, Shapiro lawyers to amend claims and improve the description of the invention. If the examiners made a mistake, it was not for lack of effort but because of structural defects in procedure.

   Patent examiners compare applications to other patents, not they real world. And their tools for comparison are out of date. Moreover, the Goodman book, which may turn out to be the killing knife, is not the sort of publication that examiners are instructed to search. "It's very easy for me to imagine why the book was not cited," says a lawyer familiar with the patent.

TRY AGAIN    Encyclopedia Britannica originally filed 79 claims, and they all were rejected in April 1991, 1 1/2 years after filing. An initial rejection is not uncommon.

   Maria Napiorkowski, the examiner, pointed out examples of vague or indefinite claims, which is normal, and an patent that anticipated this particular invention. The earlier patent covered retrieval from a videotex databases.

   Dickstein, Shapiro responded by canceling 30 of the claims. amending most of the rest, and arguing strenuously why the earlier so-called Calo patent did not apply. Calo does not teach how to retrieve information from a "plurality of information to be retrieved in a plurality of databases," wrote Jon Grossman of Dickstein, Shapiro.

   The application was rejected a second time at the start of 1992, although a new examiner, Maria Von Buhr, noted she would accept most of the claims if they were re-written.

   Her response should have been the beginning of the end for Compton's NewMedia in its quest for a patent. A quick clean-up job was all that stood in the way. Instead it was the end of the beginning.

   When Dickstein, Shapiro resubmitted the application for a third time in February, it was bounced again. This time, Von Buhr discovered another patent she said made the Compton's NewMedia invention seem obvious. The so-called Bodick patent was filed in 1988, well before Compton's Multimedia Encyclopedia was on sale.

   Grossman sat down with Von Buhr in July of 1992, and the two worked out a few, simple word changes that would overcome the examiner's concerns. Two weeks later, Grossman submitted his third amendment. It would not be his last. In November, Von Buhr announced that she had uncovered another patent, the Swinehart patent, filed two years before the Compton's NewMedia patent.

   This invention sounded perilously similar to the Compton's NewMedia claims. The patent covered a search system that allowed the user to search interactively for several types of information

   As Von Buhr wrote, the newly discovered patent "discloses the presence of textual, video, audio and graphical types of information and its accessibility." She, did, however, allow one claim

   It is tempting, in light of Von Buhr's second discovery, to wonder who is minding the store. Is it too much to ask that, after three years, the patent office has discovered all relevant prior discoveries? The criticism applies with equal force to Encyclopedia Britannica, which has a duty to disclose relevant art that they know of.

   The Swinehart patent, however, turned out not to be the barrier that it looked to be on its face. The Swinehart patent simply forced the Dickstein, Shapiro to narrow the initial claim. While Swinehart disclosed techniques to search several types of information, the patent "fails to teach or suggest any means by which to search graphical information in order to retrieve related textual information," Grossman wrote. Previously, Dickstein, Shapiro had tried to keep the searching claims as broad as possible. But in light of Swinehart, Dickstein Shapiro just closed the blinds halfway. Specifically, for example, the general phrase_a "means for storing a plurality of types of information in a plurality of databases"_was replaced with the specific phrase, "means for storing interrelated textual information and graphical information."

   While these changes may have limited the breadth of the patent, they satisfied Von Buhr. She approved the claims on April 19, 1993, subject to submission of formal drawings needed for publication of the patent. The rest, of course, is history. The history lesson is not yet over. Time in the patent world may soon be marked as BC or AC_before or after Compton's. "It's a litmus test," Ford says.

Notes from the frontier
SOFTWARE PATENTS ARE HERE TO STAY
Several suggestions for improvements emerge from California hearings

   Editor's note: The following is excerpted from an article published in the Internet Patent News Service. The author attended and testified at the U.S. Patent and Trademark Office's hearings on software patents in California in late January. Here are his impressions of the testimony of 50 speakers; his predictions for likely patent office action; and thumbnail sketches of the remarks of some of the speakers.

BY GREGORY AHARONIAN    Most lawyers and executives from large corporations were in favor of allowing patents for software, while many programmers and small companies were against awarding software patents. There were a few exceptions, such as Oracle Corp., which testified against software patents. A few speakers argued that the growing overlap of hardware and software design tools made it increasingly difficult to distinguish hardware and software in assessing claims.

   Everyone agreed that patent examiners and the patenting community need a comprehensive software prior art database to prevent the award of patents for non-novel and obvious ideas.

   Opinion was split on pre-publication_ publishing applications at a fixed interval, say 18 months, after submission. In this way, the public could offer evidence of prior art before a patent was issued. This is standard practice in foreign countries.

   Most participants suggested that an open re-examination would be beneficial. Many speakers suggested that parties that request a re-examination should be able to participate in the proceedings. Now, third parties can request a re-exam and submit prior art but not anything else, like questioning the patent owner. Many lawyers recommend clients not request re-exams because a court will likely defer to the two reviews by the patent office.

   Most observed that patent examiners need more training and that the software engineering community should help out. There were suggestions that the software and hardware examiners should move to the Silicon Valley, where they could work more closely with applicants.

   Many observed that current regulations on the patentability of software and algorithms have little effect, due to inconsistent application of the guidelines by patent examiners. Some speakers suggested that the guidelines be dropped completely and that the office allow any combination of hardware and software to be patented.

    There were also calls for the Patent Office to make better use of the Internet for distributing patent information and communicating with the public.

PREDICTIONS    As much as the League for Programming Freedom hopes, there is no way patents for software will be banned. Too many large software vendors desire software patents, including Microsoft. Beyond politics, it will be impossible to define software precisely.

   Shortening the life span of patents (down to as little as three years) will also not occur, again because of politics and the difficulties with definitions.

   Pre-publication will also not come to be. Especially in the field of software, the Patent Office would not be able to deal with the deluge of material submitted by opponents, short of getting more money from Congress or raising fees. Higher fees in turn would hurt open reexaminations.

   Some rules will be changed to improve practices. The re-examination system will probably be opened up, with more public participation. This may cause document overload (until a prior art database is built) and massive copyright problems.

    There will be efforts to start a software database. Few of the speakers, however, seemed to understand the enormity and complexity of the task. It will be that much more difficult to construct if the hardware-software equivalence argument takes hold or is used in a court case.

   While there are problems with the patenting process of software, things aren't too bad yet and there is time to make changes. A few years from now, without changes, there will be a mess.

   QUICK TAKES     JOE CLARK, CHAIRMAN OF VIDEO DISCOVERY is frustrated by the secrecy of the patent system the potential liability due to infringement. He wants less secrecy during prosecutions and more public participation during re-examinations.

    RICHARD LEFAIVRE, VICE PRESIDENT OF APPLE Computer and representative of the Computer Business Equipment Manufacturers Association, says there is no need to treat software patents differently but a crying need for better knowledge of prior art. Restrictions on software patents would hurt US companies' protection overseas.

    TOM LOPEZ, PRESIDENT OF THE INTERACTIVE MULTIMEDIA Association, says the patent system is casting a cloud over his industry. Broad system-level patents are especially troubling. He does not oppose software patents but is worried about the difficulty in overturning patents in court.

    DOUGLAS BROTZ, PRINCIPAL SCIENTIST OF ADOBE, says software should not be protected by patents. Software patent suits have cost Adobe at least $4.5 million over the past five years. Industry leaders like Microsoft didn't rely on patents for their success. Copyright laws adequately protect software. It is foolish to think that patents protect small entrepreneurs.

   ROBERT SABATH OF THE WORLD INTELLECTUAL Property and Trade Forum says the West Coast deserves its own public search facility similar to that at the patent office in Virginia. There should be more such facilities throughout the country in schools and libraries. While relaxing rules for software patenting and algorithms results in more software patent, it also increases the volume of prior art and limits the number of future patents.

    JERRY BAKER, VICE PRESIDENT OF ORACLE CORP., says copyright and trademark protection is sufficient for software. Software is fundamentally different from other technologies. The product cycles are shorter than patent processing times. The software industry rarely has quantum breakthroughs that are worthy of patent protection. If there must be software patents, a prior art database must be developed and the patent life should be reduced to three years. Patent review should be more competitive. Software patent examiners must be trained and paid well.

    DENNIS FERNANDEZ OF FENWICK AND WEST says the two to three year backlog of patent applications hurts owners. Overall, however, software patents do no significantly impact business. Companies can design around other patents or obtain reasonable licensing fees.

   STEVEN HENRY OF WOLF GREENFIELD & SACKS says the reexamination  process now favors the examiner's position at the expense of challengers. He is now involved with company that couldn't get funding without having filed for a patent. Investors ask him about patent protection often in regards to investments.

    ROBERT MAY OF ICONIC INTERACTIVE supports both software and interface patents. Clients want indemnification for prior art infringement, but searches are expensive.

    NEIL BROWN, A SOFTWARE CONTRACTOR, is against software algorithm patents. Software patents will hurt innovation. Access to prior art is difficult, and prior art determination could be intractable. Software patents are a blight. Copyright and trade secrets are sufficient.

    GORDON IRLAM OF THE LEAGUE FOR PROGRAMMING Freedom prefers traditional "literal aspects" copyright doctrine. He opposes "look & feel"copyrights and patents. Large successful companies don't rely on software patents to grow in the software industry, like Microsoft. Software patenting needs economic analysis.

    E. ROBERT YOCHES OF FINNEGAN HENDERSON Farabow Garrett & Dunner says investors prefer patents over trade secrets, which they feel can easily become public. Software is easy to design around, so it does promote innovation without restraining trade.

    JIM SHAY OF MORRISON AND FOERSTER says the software industry benefits from patents. Patent examiners don't have best access to prior art. The patent office should work closely with industry groups. Pre-publication and open reexamination would help.

    JIM WARREN, DIRECTOR OF AUTODESK, says software mimics the mind. Extending patents to software allows monopolies of intellectual processes. There is no evidence that patents promote software progress. Autodesk wastes money filing defensive software patents and spends millions of dollars fending off frivolous lawsuits.

    PAUL LIPPE, GENERAL COUNSEL OF SYNOPSYS, says the first company to market has an advantage equal to patent monopoly protection. There are not any good technologists at the Patent Office, which will increasingly become a problem as the worlds of hardware and software converge.

   RONALD LAURIE OF WEIL GOTSHAL & MANGES says the notion that "Software patents are bad" is legally unsound. It should be irrelevant whether a process is based on mathematical or logical operations. There is no distinction between hardware and software solutions. Novelty and non-obviousness standards must be applied rigorously.

    LEE PATCH, GENERAL COUNSEL OF SUN Microsystems, says the system is broken, creating too much uncertainty, affecting large financial decisions. Poor patents are being issued because the prior art and non-obvious threshold is too low.

   WILLIAM NEUKOM, VICE PRESIDENT OF MICROSOFT, supports improving the reexamination process. A better software prior art database and prompt processing of applications are also needed. Microsoft did not have any patent lawyers two years ago but will have six by the end of the year.

    RICHARD STALLMAN OF THE LEAGUE FOR PROGRAMMING Freedom says software development is evolutionary. There are few quantum jumps and little novelty. The country has had plenty of progress without software patents.

   VICTOR SIBER, SENIOR COUNSEL OF IBM CORP., says patents help gain access to foreign markets. The patent office should do a better job of checking for novelty. Standards should not be altered for software patents. Hardware and software too interrelated.

    MICHAEL LACHUCK OF POMS SMITH LANDE & ROSE says clever patent drafters will always get around any set of rules. He opposes pre-publication. Reexamination procedures should be improved.

   Aharonian is president of Source Translation & Optimization of Belmont, Massachusetts. He maintains a database with information on 15,000 government, university, and corporate computer programs, 5,000 software patents, and 100,000 technical reports and articles. He can be reached at 617 489 3727 or at srctran[_at_]world.std.com.

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ENCRYPTION A HO-HUM AFFAIR SO FAR FOR CONSUMERS    The Administration's decision to go forward with the controversial Clipper Chip technology has once again fanned the encryption flames.

   Nearly everyone, civil libertarians, computer makers, exporters, is up in arms_everyone, that is, except Joe Consumer, who so far thinks encryption is a big yawn.

   The first industrial-strength commercial encryption product is off to a modest start. ViaCrypt PGP has been publicly available since late last year, but its owner, Lemcom Systems, Inc., of Phoenix, Arizona, has only sold a few hundred copies, according to Leonard Mikus, president of the ViaCrypt division. "It's not taking off like Lotus 1-2-3," he says.

   ViaCrypt PGP sells for $100. Because Lemcom does not plan to export the product, it contains stronger, more secure coding techniques than other commercial products.

   ViaCrypt PGP is a commercial version of the underground PGP encryption product now the subject of a government investigation. The U.S. Attorney's Office is looking into how the so-called freeware software product made its way overseas in violation of U.S. export laws.

   Government officials are worried that PGP, which stands for Pretty Good Privacy, is too good and can't be broken.

    The Clipper Chip technology is based on secret algorithms developed by the super-secret National Security Agency. The government will use it internally to scramble voice and data signals and hopes private industry will also embrace the technology.

   Privacy advocates criticize the Clipper because there is no independent way to assess it security and because government agencies will be able to obtain court orders to decode the secret messages.

   The Computer Professionals for Social Responsibility is considering litigation that would force disclosure of documents related to development of the Clipper proposal.

   Corporations worry that consumers, especially those overseas, won't trust a U.S. government-developed encryption product.

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That's all, folks



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