USPTO Seeks Partnership with Software Community to Enhance Software Patents

Last Thursday the USPTO published a notice in the Federal Register of its intent to form a “Software Partnership” with the software community in order to enhance the quality of software-related patents.  Members of the public are invited to participate, and the initiative will be kicked off in two public meetings.  A Silicon Valley event will be held on Tuesday, February 12, 2013, beginning at 9 a.m. Pacific Standard Time (PST) and ending at 12 p.m. PST. A New York City event will be held on Wednesday, February 27, 2013, beginning at 9 a.m. Eastern Standard Time (e.s.t.) and ending at 12 p.m. e.s.t.  According to the notice, the Software Partnership will be an opportunity to bring stakeholders together through a series of roundtable discussions to share ideas, feedback, experiences, and insights on software-related patents.

This intiative and the SV meeting is déjà vu:  in January 1994, nearly 20 years ago, the USPTO held a meeting with a very similar intent.  That meeting, held before Bruce A. Lehman,  the then Assistant Secretary of Commerce and Commissioner of Patents and Trademarks, under President Clinton, who introduced the topic with this observation, among others:

“Much recent concern has been expressed over the patent system to protect software-related inventions. These concerns range from claims that the patent system is incompatible with software development to skepticism over the ability of the Patent and Trademark Office to accurately gauge innovations in this field of technology. However, to date, there has not been a forum in which those having concerns could air them with the hope that they would be heard, evaluated, and used to develop future policy. These hearings are intended to provide that forum. We’re really quite serious about having this opportunity to really hear from people in the business about what they think about the current state of the intellectual property system, what they think needs to be done to improve it.”

The 1994 hearing entertained testimony from a representative sample of industry leaders of that era, including representatives from Oracle, Borland, Apple, Adobe, Xerox, Storage Tek, Intel, Time Warner, Exxon, and several independent developers and smaller software companies.  You can read the entire transcript for yourself, but the testimony was predominantly in favor of maintaining and improving patent protection for software.  A number of the comments included recommendations for improving the examination process, most of which have been implemented over the years, such as pre-issuance publication, improved reexamination options, opposition procedures, more examiners with software backgrounds, and better software prior art databases or prior art submission options. Some of the testimony was dead set against software patents, but primarily by companies that had no patent portfolios and were facing the prospect of patent enforcement actions against them.

It will be interesting to compare the thoughts shared in the 1994 testimony with those shared next month in San Jose and New York.  My guess is that not much will have changed, other than the continued growth of the US software industry and growth in software patenting, which despite all the difficulties and shortcomings of the system, continues unabated if not gaining momentum.

Some highlights of the 1994 Hearings on Software Patents included:

• I think one of the problems that we have in reexamination right now is that generally speaking we limit the prior-art references in a reexamination to those that are submitted by the person who is seeking reexamination, and that creates a problem for third parties.
• Should decompilation be allowed for the purpose of interoperability, but clearly not for piracy, cloning or replacement of the basic software? I think you’ll get a very strong eighty-to-ninety-percent positive response that it should be. The reasons are you have organizations like the IEEE with two hundred and forty thousand members who have voted and publicly stated they support decompilation when required. The same with ASIS, the same with CCIA. In the case of CCIA we have sixty-seven companies — I happen to be Chairman of that — most of the RBOCS, all but one, AT&T, Univac, Amdahl, Storage Tek, and we have approximately a million employees represented, and they would vote for decompilation and maintaining it as a, a necessary option. Remember the alternative is a mandatory API. That could be something that could be legislated, but if not —
• In particular over the years we’ve seen a marked shift in our innovation focus from hardware to software, and so I’m very interested in the topic of these hearings in particular.
• So then the question is asked, why isn’t copyright protection sufficient to protect the software investment? Well, it should be clear from the very words of the Act itself that the copyright is intended to protect the expression. It does in no event protect the systems, the methods, and other aspects of functionality within the software. We think that computer program-related subject matter is, and has been, protected well in the past, by patents.
• Again, some people have said that software inventions should be treated differently. We think not. In some respects, in fact to treat the software industry as an industry raises more questions than it answers. As I mentioned before it’s much of an enabling technology in many domains, in telecommunications, in entertainment, in finance, in manufacturing and process control, software is often a common denominator. And the earlier-mentioned national information infrastructure, the highway likewise is largely a software development, and it’s been going on for some time.
• CBMA 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. But nothing suggests the need to treat software differently.
• On the other hand, the emergence in recent years of patents on software has hurt … 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.
• In summary, these are my main points:  The software industry thrived without patents, creating its fundamental base in an era of no software patents; software patents harm the industry, with no corresponding benefit; software embodies mathematical algorithms; the law, starting with the Constitution, argues against patents for software-related inventions; and last, the proper form of protection for software is copyright.
• Patent examiners should rely less heavily on the Section 101 as a basis for rejecting software-related inventions. With an increasing 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 benefit 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
• 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 their products. In this environment a seventeen-year monopoly is completely out of context with industry reality.
• [Our company] 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.
• The Software Patent Institute 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 the unusual speed with which software innovations are incorporated in products, the PTO’s patent review process must be made 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 the industry are essential to recruit qualified personnel and to retain them at the PTO.
• Fourth, the PTO in conjunction with industry must establish additional committees to clearly delineate the standards of novelty and nonobviousness that will be required for software inventions to receive patents.
• The patent system has consistently provided an incentive to expend the kind of technical and financial efforts previously testified to to develop new technology, including software-related technology. In the United States the Patent and Trademark Office carefully examines every patent application against prior art to insure that only the novel and nonobvious inventions obtain patent protection. Software-related technology is no different.
• We support the current statutory law concerning patents as well as its interpretation by the courts as relating to software-related inventions. We are currently aware of no alternative to the patenting of software-related inventions that will better-serve our industry than the current patent laws.
• Further, we believe it would be a mistake to treat the patenting of software-related inventions differently than the patenting of other utility inventions. In this regard, Patent and Trademark Office and the courts should be left free to develop the extent of patent protection for software-related inventions and its enforceability on a case-by-case basis until such time as it is apparent that the courts are not up to the task. This time is not at hand, rather, the courts for the most part are both interested and concerned about protecting innovative technologies such as software-related inventions.
• However, there are issues on which SEF members are in general agreement. Our members feel that the patent system favors large companies over small companies, and we feel that it’s important that the patent system both in theory and in practice should not give big companies an advantage over small ones.  Most of our concerns have to do with Patent Office practices, and we understand that this subject is scheduled for hearing in February. We do appreciate the opportunity to speak on these issues today.
• To the degree that software is patentable, SEF members want the patent system to produce good, clear patents, especially where the patents are important.
• Our first recommendation would be that the Patent Office should continue to improve its prior art database by adding to it textbooks, scholarly articles, user manuals of commercial products and nonpatent prior art cited in existing and pending software-related patents. This would be particularly effective if such art could be added to the PTO’s computerized database, but also be useful to review the trade publications for the last ten years to identify significant software products or product enhancements so that their manuals could be included in the database.
• Our second recommendation is that we realize that patent examiners must have both technical ability and a knowledge of how to apply legal principles to determine patentability. We encourage the Patent Office’s recruiting of examiners with computer science knowledge. We encourage the Patent Office to continue to improve the quality and expertise of its patent examiners and software. We particularly suggest increasing the pay and professional stature of examiners so that more examiners see it as a professional career rather than just a stepping stone to private practice; I think you’ve heard those suggestions earlier also.
• So in our view, the present system of patent protections 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 defeaturing 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 tests of obviousness, and the person of ordinary skills 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.
• Comment has been made that patents can restrict developers, and that’s certainly the case, but that’s true on every patent in every area of art. It’s not particularly true for computer science in any respect. The comments have been made about bad patents, patents which have prior art problems, poor examination, again these exist in every art unit. Perhaps it may be worse in the computer art area because there was this period of time when the Patent Office was denying computer patents and therefore not building their prior art collection, not encouraging the submission of patent applications which would mature to patents and go into the prior art collection on it.
• In my recent practice I’ve found the inexperience that people have talked about with the examiners to be diminishing and I’ve found that the examiner’s doing quite a good job given the constraints of trying to examine very complex art in a wide variety of areas. I think also that the patent office has received bad press due to both people who should know better and also the people providing the information not knowing enough about the patent system. Too often comments are based on the title or at best the abstract of the patent, and not the claims, which indicate what the true invention is.
• Computer scientists suffer from a poor tradition of publishing their algorithms, especially those involved in industry, and also in looking at prior art. I often think that many of my students wouldn’t know where the library is on campus if you ask them, and when they start out on a project the idea of going to the library is not the first thing that crosses their mind, and certainly the idea of doing a patent search to see what’s in the prior art and see how to accomplish things is far from their mind.
• I think that while the Software Patent Institute should be congratulated for what they’re doing, their idea of collecting prior art is doomed to failure because especially for old inventions, it is very hard to determine what is prior art or what are the novel things. In the typeset system I wrote many years ago there were probably hundreds of things which may be novel or may at least be prior art for future inventions, and it would be hard to enumerate them.
• The type of inventions we seek to protect generally relate to methods for analyzing seismic or reservoir data using mathematical algorithms which yield a desired output, such as an accurate 3-D depiction of the subsurface. For example, these methods may accurately identify salt domes, highly faulted formations, and other complex subsurface anomalies which reveal oil and gas deposits. Patent applications claiming methods for analyzing seismic data using mathematical algorithms have always been among the most perplexing cases for the Patent and Trademark Office to review. In some cases, the Office in applying the so-called Freedom Walter Abel test, two-part test, has held such claims to be patentable subject matter under Section 101. In other cases, very similar cases, the Patent and Trademark Office has found the test not to be satisfied.  It was thought by many in the industry that some clear guidance would be forthcoming from the Patent Office when the Federal Circuit issued its opinion in the Arrythmia Research v. Corazonix case which some other speakers mentioned today. However, we have been disappointed that the Patent and Trademark Office often does not appear to follow the reasoning of Arrythmia, thereby creating a great deal of uncertainty in this important area of the law, and I realize that consistency is the hobgoblin of little minds, but in the area of Section 101, the threshold of patentability, consistency is very important.

 

Here is the text of the notice in the Federal Register on January 3, 2013.

SUMMARY: The United States Patent and Trademark Office (USPTO) seeks to form a partnership with the software community to enhance the quality of software-related patents (Software Partnership). Members of the public are invited to participate. The Software Partnership will be an opportunity to bring stakeholders together through a series of roundtable discussions to share ideas, feedback, experiences, and insights on software-related patents. To commence the Software Partnership and to provide increased opportunities for all to participate, the USPTO is sponsoring two roundtable events with identical agendas, one in Silicon Valley, and the other in New York City. Each roundtable event will provide a forum for an informal and interactive discussion of topics relating to patents that are particularly relevant to the software community. While public attendees will have the opportunity to provide their individual input, group consensus advice will not be sought.

For these initial roundtable events, this notice sets forth several topics to begin the Software Partnership discussion. The first topic relates to how to improve clarity of claim boundaries that define the scope of patent protection for claims that use functional language. The second topic requests that the public identify additional topics for future discussion by the Software Partnership. The third topic relates to a forthcoming Request for Comments on Preparation of Patent Applications and offers an opportunity for oral presentations on the Request for Comments at the Silicon Valley and New York City roundtable events. Written comments are requested in response to the first two discussion topics. Written comments on the third discussion topic must be submitted as directed in the forthcoming Request for Comments on Preparation of Patent Applications.

DATES: Events: The Silicon Valley event will be held on Tuesday, February 12, 2013, beginning at 9 a.m. Pacific Standard Time (PST) and ending at 12 p.m. PST. The New York City event will be held on Wednesday, February 27, 2013, beginning at 9 a.m. Eastern Standard Time (e.s.t.) and ending at 12 p.m. e.s.t.

 

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