REVIEW OF USPTO HEARINGS IN SAN JOSE ON SOFTWARE PATENTING Jan 29, 1994 Gregory Aharonian Internet Patent New Service P.O. Box 404, Belmont, MA 02178 617-489-3727 patents@world.std.com Last week the Patent and Trademark Office held two days of hearings at the San Jose Convention Center, in which fifty testified for approximately 11 minutes each during the two days. Commissioner Lehman, along with about a dozen other PTO officials, including Gerald Goldberg, director of Group 230 (which examines most of the software patents) were in attendance. About 125 people attended the first day, and 62 people the second day. The testimony was quite interesting, which I will summarize briefly before presenting summaries of each speaker's comments. I will also offer predictions to what will happen to software patenting activities. Summary - With regards to software patents, most lawyers and large corporations were in favor of allowing patents for software, while many programmers and small companies were against awarding software patents, with interesting exceptions, such as Oracle which testified against software patents. A few argued that the growing overlap of hardware and software design tools made it increasingly difficult to distinguish hardware and software from a patent claims point of view. - Everyone agreed that patent examiners and the patenting community need access to a comprehensive software prior art database, to prevent awarding of patents for non-novel and obvious ideas. Since I have the only large such software prior art database, this constant refrain was music to my ears, especially since I know how very complicated prior art databases are to construct and maintain. - Opinion was split on pre-publication, that is, publishing applications some fixed time, 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 for patenting in foreign countries. - Most suggested that an open reexamination procedure would help greatly, where prior art evidence submitted for a rexamination could also be used later on in a court case, and that those requesting a reexamination be able to participate in the proceedings. - Most observed that patent examiners need more training, and that the software engineering community should help out. Many suggested moving Group 230, the software/hardware examiners, physically to Silicon Valley, to allow the Group to work more closely with its main customers. - Many observed that current statutory regulations on how software and algorithms can be patented are having little effect, due to inconsistent application of the guidelines by patent examiners. Some suggested that these guidelines be dropped completely, and allow any combination of hardware and software to be patented. - Many called for the Patent Office to make better use of the Internet for distributing patent information and communicating with the public. Much testimony was given to personal ancedotes about patenting software. All of the testimony will be made available in February from the Patent Office for sale in printed form for $30, or for free by anonymous-ftp. There are more hearings in Washington in February. Predictions. As much as the League for Programming Freedom hopes, and argued somewhat forcefully, there is no way patents for software will be banned. Too many big software vendors desire software patents, including Microsoft (for which the January 24th issue of Computer Reseller News has a two page article on Microsoft's glowing clout in Washington). Beyond politics, it will be impossible to legally define what is 'software' clearly enough to know what to ban. Software patents are here to stay as long as patents are issued. Shortening the life span of patents (down to as short as three years) will also not happen, again because of politics and the impossibility of clearly defining software. Pre-publication will also not come to be, for the same reasons (whatever they are) that first-to-file will never come to be (at least over the next few years). Especially in the field of software, the Patent Office would not be able to deal with the deluge of material sent in as challenging data, short of getting lots more money from Congress or raising fees (though this also plagues open reexamination). Some statutory rules will be changed, because there are some obvious fixes to improve practices. Personally I would like to see the guidelines in the September 5th 1989 OG scrapped because they are not having much of an effect, nor would adding more guidelines have much of an effect. Since these rules changes don't require Congressional approval, it is a place where the Patent Office can do something quickly. The reexamination system will probably be opened up, with more public participation and the ability to reuse materials submitted for consideration in later court proceedings. I think this will cause a document overload (until the prior art database is built), especially when public contributions are solicited, as well as a massive copyright problem. Efforts will be started to build a software prior art database. Though based on comments heard at the hearings, few understand how complex a problem this really is. This effort will be coupled somehow into public rexamination, though will be greatly more complicated if the hardware/software equivalence argument gains much acceptance or is used in a court case. And copyrights of prior art documents will be a major problem for a government agency to deal with. In short, while there are problems with the patenting process vis-a-vis software, things aren't too bad yet and there is time to effect changes to manage the process better. A few years from now, without changes, there will be a mess. ============================================================================== SUMMARY COMMENTS OF TESTIFIERS AT THE HEARINGS Wednesday, January 26 (in order of testimony) Joe Clark, Chairman and CEO, Video Discovery Frustrated by patent system. Afraid of pending patents kept secret until issuance and the potential liability due to infringement. Wants to remove secrecy of patents during prosecutions. Wants reexamination more public. Wants hiatus on issuance of multimedia patents until these issues are settled. Ryal Poppa, Chairman and CEO, StorageTek They have 300 programmers, and support software patents. Want decompilation rights for interoperability. Oppose European efforts to use patents and copyrights to limit competition. Wants law to allow access to source code of APIs. William Ryan, Intellectual Property Owners/ATT Supports software patents. Copyrights useful for software expression. Courts have made it quite clear that patents are for protecting software. ATT has had good software patenting experiences. Patents useful for alliance building. Software patents should not be treated differently. Against new statutes for handling software. Current patent and copyright statutes sufficient and work well. Better prior art information needed. Richard LeFaivre, VP at Apple/ CBEMA No need to treat software patents differently. As long as new and non-obvious, it should be patented no matter how implemented. Standards for software patents should be same as other technologies, not restricted. To restrict would hurt US companies' protection overseas. Better software prior art needed. Don't cut back on software patents. Tom Lopez, President, Interactive Multimedia Association Patent system casting cloud over industry. Powerful patents threatening in integrated industries and customer application world. Don't like broad claiming process/system level patents. Support patent system for software, but should work fair and minimize speculation. Worried about weight of patent examiner's review when trying to overturn. Paul Heckel, President, Hyperracks Very strongly support software patents. Helps protect small companies, stimulates new technology introduction. Press is exaggerating patent problems. Told a few stories of how small companies were able to raise money because investors saw or demanded software patents. Robert Kohn, General Counsel and VP, Borland Argued that there is public confusion over issue of enforcement versus scope. One Patent Office position implied more enforcement requires more broader scope, especially for copyright protection. His comments reflected Borland's loss to Lotus (under appeal) over copyright of 1-2-3 features. Douglas Brotz, Principal Scientist, Adobe Software should not be protected by patents. It is wrong to do so. Software needs innovation. Software patent suits have hurt Adobe, which has spent $4.5 million over five years successfully fighting off an infringement suit. Industry leaders like Microsoft didn't rely on patents for their success. Copyright confers appropriate levels of software protection. All software is math algorithms in a reductionist sense which supposedly isn't patentable. Delusion to think that patents protect small entrepreneurs. With regards to interoperability, those that don't allow for it usually are losers, so Adobe opposes any law to force decompilation rights. Hans Troesch, Partner, Fish and Richardson Wants qualified examiners and comprehensive prior art database. Lawyers can get software patents, though painfully. Software patents should be allowed, but only non-obvious and novel ideas. Should not have to play tricks with claim writing to get a software patent. Copyright not sufficient for software protection. Robert Sabath, World Intellectual Property and Trade Forum More flexibility needed for software patenting process. Don't want to slow process through statutory rules. PTO maintenance fees too high. West Coast deserves its own public search facility (similar in breadth to Crystal City), and more throughout the country in schools and libraries. Need a comprehensive software prior art database, one that is indexed. Relaxing rules for software patenting and algorithms results in more software patent, but also more software prior art to limit future software patents. William Benman, Partner, Benman & Collins Wants better software patent application examination, which is adequate now. Software prior art problems no different that other technology areas. He suggested a higher filing fee for quicker processing of applications. Jerry Baker, VP, Oracle Corporation Patents inappropriate for software. Copyright and trademark sufficient. Software fundamentally different from other technologies, product cycles less than patent processing times. Software rarely has quantum breakthroughs that are worthy of patent protection. Patent protection should be eliminated for software. Prior art database needed. Patent life for software should be reduced to three years. Patent review should be more competitive. Software patent examiners must be trained and paid well. Carl Silverman, Chief Counsel, Intel Corporation Software related technology should be patentable. Support current statutory laws regarding software patents. Mistake to treat software patenting differently. Can live with software patent pre-publication. Kaye Caldwell, President, Software Entrepreneurs Forum Members of her organization (about 1000 software developers in Silicon Valley) are split on the issue of software patenting. Members feel PTO favors big companies. Want infringement more clearly handled. Patents threaten small companies. Improve the prior art database. Better train examiners on how to deal with software patents, and increase their pay. Accelerated examination should be improved. Prepare educational materials for press and public. Use the Internet to help with prior art. James Chiddix, VP, Time Warner Cable Too many obvious ideas are being patented. Time Warner is the largest copyright owner in the world. More rigorous enforcement of current novelty and obviousness tests will help greatly. Dennis Fernandez, Attorney, Fenwick and West Two to three year backlog of patent applications hurts companies. Software patents in the EDA industry do no significantly impact business. Companies in the EDA industry are sophisticated, can design around other patents or obtain reasonable licensing fees. Pete Antoniak, Solar Systems Software In the software industry for the "big" payoff. He was encouraged to apply for a patent. Got a mechanical examiner for an educational software patent application. His application was rejected three times, the first two for reasons the original examiner admitted were unfounded. Prof. Lee Hollaar, University of Utah Software does not evolve quickly - Knuth's books, still used, are twenty years old. Better software prior art database needed. Examiners are getting better. Software industry not the best researchers in general, so lax about prior art searching. Past PTO position of shunning software patents prevented building a prior art foundation to reject future software patents. Open files during prosecution after fixed period, after first office action. Section 101 battles not worth fighting, better to shift focus to 102 and 103. Steven Henry, Attorney, Wolf Greenfield & Sacks Software industry no different than others. Typically, reexamination favors patent examiner's position at the expense of challengers. Examiners need increased training. People loosing faith in the system. Exceptions like Compton getting the attention. Involved with company that couldn't get funding without having filed apatent. Investors ask him about patent protection often in regards to investments. Sal Cassamassima, General Counsel, Exxon Production & Research Want PTO to liberalize guidelines on math algorithms, of great importance to Exxon. Seismic algorithms lead to large economic returns after large investments in research and development. Dispense with Freeman-Walker-Abel two part test. Robert May, Iconic Interactive Supports software and interface patents. Clients want indemnification for prior art infringement, but search is expensive. Make more patent information available over the Internet. Neil Brown, Software Contractor Against software algorithm patents, along with his colleagues. More 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 sufficient. Gordon Irlam, League for Programming Freedom Prefer traditional "literal aspects" copyright doctrine. Oppose copyright "look & feel" and "software patents". Big successful companies didn't rely on software patents to grow in the software industry, like Microsoft. Software patenting needs economic analysis. E. Robert Yoches, Attorney, Finnegan Henderson Farabow Garrett & Dunner All technologies have unique aspects, and all share much in common, including software. Software patenting process can be improved with ideas from hearing. Investors prefer patents over trade secrets, which investors feel can easily become public. Software is easy to design around, so it does promote innovation without restraining trade. Section 101 is an arbitrary handicap. Jim Shay, Attorney, Morrison and Foerster Software industry benefits from patents. Patent examiners don't have best access to prior art. PTO should work with industry groups. Pre-publication and open reexamination would help. Thursday, January 27 (in order of testimony) Jerry Fiddler, CEO, Wind River Systems Stop issuing software patents. Copyright, trade secrets and trademarks is sufficient protection for software. Software patents are harmful to country, impedes innovation. Patents interfere with openness. Jim Warren, Director, Autodesk Software mimics the mind, and differs from all other devices. Extending patents to software allows monopolies of intellectual processes. No evidence that patents promote software progress. Autodesk is having to waste money filing defensive software patents, and spends millions fending off frivolous lawsuits. Intellectual/algorithmic inventions should not be patentable. Freeze current applications. Reduce protection period. First-to-file is good. Mandate cross-licensing for two years. Michael Glenn, State Bar California Need more qualified examiners. Need better software prior art databases. Open up Internet to the APS text databases. Respect non-obviousness and novelty of new software ideas. Paul Lippe, General Counsel, Synopsys First to market is a high advantage equal to patent monopoly protection. Don't need strengthened patent laws for software. Most software patents are incremental. No good EDA technologists work for Patent Office. A growing problem for patent world as hardware/software converge. Tim Boyle, Director, Multimedia Development Group Wish for some sort of peer and academic review involvement with software patent applications. Want a better software prior art database. Ronald Laurie, Attorney, Weil Gotshal & Munges "Software patents are bad" is legally unsound. Being mathematical or logical operations should be irrelevant to patenting. No distinction between hardware and software, such as neural nets. Novelty and non-obviousness must be applied rigorously. Lee Patch, General Counsel, Sun Microsystems Spend lots of time dealing with nuisance patents. System is broken, creating too much uncertainty, affecting large financial decisions. Low quality software patents being issued, due to prior art and non-obvious threshold being too low. Court of Appeals has lower standard. Examination must be improved. Life of patent should be from filing date to prevent secrecy of patents causing problems. Christopher Byrne, General Counsel, StorageTek It is a mistake to deny patents to software, thou process has to be improved. Improve the training for examiners. Prevent "submarine" patents delaying processing through secrecy. Software patenting process works, but should be improved. Gideon Gimlan, Attorney, Fliesler Dubb Meyer & Lovejoy No clear distinction between hardware and software. EPO generally finds more applicable prior art. Tom Cronan, General Counsel, Taligent Patent stimulate investments in software. Hire more computer science graduates to be examiners. Build a human software prior art database, using the Internet. Wants pre-publication after a fixed time period. William Neukom, VP, Microsoft Current laws appropriate for software patents, but system can be improved. Support improving reexamination process. Better software prior art database is needed. More prompt processing of applications needed. Microsoft has been target of infringement suits. Had no patent lawyers two years ago, will have six by the end of this year. (And frankly, isn't it scary for Microsoft to have a lawyer named Nukem :-) Charley Morgan, VP, Prudential Insurance Being threatened with patent infringement lawsuits over life insurance software systems. Better prior art is needed. Richard Stallman, Free Software Foundation Software patents impede software progress. Software evolutionary, no quantum jumps, little novelty. Software R&D has different cost structure. How many patents does GNU-C infringe? Probably way too many. PTO mistakes causing gridlock. The country has had much progress without software patents, why start now? Timothy Casey, Patent Counsel, Silicon Graphics SGI founded on a Stanford patent. Patents not a bad idea. Too many broad software patents. Need more examiners with software backgrounds. Revamp reexamination, and make process less expensive. Do pre-publication. Give examiners better software prior art research tools. Pay examiners more. Regionalize Patent and Trademark Office, moving Group 230 to Silicon Valley. Robert Greene Sterne, Attorney, Sterne Kessler Goldstein & Fox Software patents are proper. Patent lawyers profit from current uncertainty. Investors want patent protection before investing. No lines drawable for what is an algorithm. Everything is mathematical algorithms - look at CAD systems. Functionality is important - not implementation. Claiming should be flexible. Patent applications must be processed more quickly. Victor Siber, Senior Counsel, IBM 3.5 percent of IBM software programs protected by patents. Helps with foreign market access. Patent office should do novelty checks better. Standards should not be altered for software patents. To do so will negatively impact investment. Hardware and software too interrelated. "Sui generis" rights would be devastating. Micheal Lachuck, Attorney, Poms Smith Lande & Rose Clever patent drafters will always get around any set of rules. Against pre-publication. Reexamination procedures should be improved. Threat of injunctive relief for liability due to infringement makes risk very uncertain. Greg Aharonian, Source Translation & Optimization Brilliant, riveting testimony that kept them spellbound for hours :-)))))) Seriously, I talked about the equivalence of hardware and software, and my software prior art database. I estimate at least $10 million would be needed to build the foundation of a comprehensive prior art database and process for maintaining and upgrading such a system. Open reexamination, while a good idea, will be a paperwork nightmare for the PTO. Gregory Cole Need more knowledgable patent examiners. Need software patents. Bring in outsiders to help with examination. Barry Graham, Int. Fed. Industrial Property Attorneys Software patents help to acquire investment. Help protect commercial successes. Edward Lemon, Software Engineer, Network Computing Devices Do not need software patents. Too many bad patents. Roger Schlafly, Software Engineer, Real Software In favor of software patents. Russell Brand, Computer Science, Reasoning Systems Against software patents. Lawyers and programmers expert at getting around rules. "Look and feel" copyright protection also a problem. Willis Higgins, Attorney, Cooley Godward Castro Huddleson & Tatum Copyright juries have to act like patent examiners without the training, so using copyright protection for software also risky and uncertain.