WILLIAM BENMAN

BENMAN & COLLINS

MR. BENMAN:  And as someone that hasn't had breakfast,  I  assure
you that my testimony will be brief!

Commissioner LEHMAN, thank you for hearing me on the question  of
the  patenting  of software_related inventions. I commend you for
taking testimony on this important topic.

I'm a partner with the intellectual property firm of Benman, Col-
lins  and Sawyer, with offices in Palo Alto, Los Angeles and Tuc-
son. We have prepared and  prosecuted  numerous  applications  on
software_related  inventions,  and we offer this testimony in the
hope that our experience in this regard maybe of  some  value  in
connection  with your effort to sample public opinion on this to-
pic.

Since the early 1980s, we in the community of patent lawyers  who
are    preparing   and   prosecuting   patent   applications   on
software_related inventions observed  two  thrusts,  one  in  the
direction of copyright protection as the primary if not sole form
of legal protection for software, and the other in the  direction
of  patents where patent protection was available. We notice that
those companies that were patent_conscious were  most  likely  to
exploit  the  patent option.  Many of the companies which did not
utilize the patent option were often new or young  software  com-
panies  which  were  not  patent_conscious per se.  The plight of
these companies was compounded by their  reliance  on  nsel  from
lawyers that were typically not patent lawyers with experience in
the field.  These lawyers held themselves out as experts in  com-
puter law and high_tech law, but typically held a mistaken notion
that software was not patentable, although  patents  had  already
been  issued  for software_related inventions.  To this day, many
uninformed attorneys either advise their clients that patent pro-
tection  is not available for software, or they criticize the pa-
tent system as too costly and cumbersome for  the  protection  of
software.   As  a  result  these  attorneys have either generally
steered their clients away from patents as an appropriate form of
protection  or  neglected to advise their clients to seek counsel
from an attorney having experience in the patenting of  software.
Hence,  for  many  years  now, many software publishers have been
lured by the ease and low cost of  copyright  protection  without
being  properly advised of the shortcomings of same nor the avai-
lability and advantages of patent protection.

As ea$as ten years ago we began to  suspect  that  the  copyright
holders  would  someday  become aware of the limitations of copy-
right protection when it became necessary to  enforce  the  copy-
rights.  We expected that they would seek a more substantive form
of protection such as that currently afforded by the patent  sys-
tem.   This has now come to pass as the software industry has be-
come aware of the shortcomings of copyright protection often as a
result  of painful and costly court battles.  The lawyers guiding
these firms away from patents have now essentially painted  them-
selves into a corner, having failed to stretch the scope of copy-
right protection to cover substantially more than the form of the
software and not the underlying inventive aspects thereof.  These
attorneys have now marshalled  some  software  publishers  behind
their  effort  to  escape  from  the situation by criticizing the
current patent system as unwieldy for  software,  advocating  in-
stead some new form of protection for software that would protect
the underly(concepts  without  a  rigorous  examination  process.
They  are  supported in their efforts by recent admissions by the
Patent Office of a shortage of prior art in PTO files to  facili-
tate  the  examination  of software_based applications.  It would
appear that many now desire the ease and low cost  of  the  copy-
right  system with the substantive protection afforded by the pa-
tent system.

It would clearly be adverse to the public interest, in our  view,
to grant such monopolies without a substantive examination of the
application. Yet, in our view, any system which involved  a  sub-
stantive  examination  of  such applications would be essentially
equivalent to the present system.  Hence we  seek  to  speak  for
those  attorneys who are registered to practice before the Patent
and  Trademark  Office  and  experienced  in  the  protection  of
software in expressing our view that the present system of exami-
nation for software_related inventions and innovations is, though
not  perfect,  adequate  and  appropriate  for  the protection of
software.,irst we feel compelled to mention that many of the con-
cerns  in the industry would be adequately addressed by educating
the industry about the patent process by those  qualified  to  do
so.  We believe that it is unethical for any attorney to advise a
client not to  seek  patent  protection  for  inventions  whether
software_related or not, if the attorney giving the advice is not
skilled in the field.

The process by which attorneys are admitted  to  practice  before
the Office is intended to protect the public interest by ensuring
that those that hold themselves out as qualified to practice  be-
fore  the  office  are  indeed  so_qualified.  Unfortunately  the
software industry has grown up on an unhealthy  of  poor  counsel
with  respect  to  intellectual  property  issues  pertaining  to
software. It is no wonder then that it now has a bit of  indiges-
tion  and  needs some relief.  We feel that the present system of
examination if properly administered can provide that relief, and
allow  me to briefly address some of the perceived proble0ith the
present system.

One of the perceived problems is that the Patent Office will  is-
sue  patents  on  inventions already in the public domain. That's
been touched on by some of the  speakers  earlier  this  morning.
Another  problem  is that the patent process is costly and there-
fore available only to big companies,  and  a  third  often_heard
complaint is that the patent process is too slow.

First, with respect to the concern that the  Patent  Office  will
issue patents on innovations that are known and used by others in
the industry, let me say that to the extent that this is  a  real
problem,  it  is  no different for the software industry than for
other areas of technology. There are at  least  three  levels  of
safeguards  by  which  this perceived problem may be addressed by
the current system.  First, the Patent Office is currently in the
process,  as  I understand, of providing the examining corps with
the  capability  to  search  beyond  PTO  files  to  the  on_line
computer_searchable  databases,  such  as  those accessed through
th4alog system.  This will facilitate a more thorough examination
of  the prior art including technical literature, new_product an-
nouncements and et cetera, minimizing ab initio  the  probability
of  a  patent  issuing on an innovation which lacks novelty or is
obvious in view of such art.

To the extent that the innovation is known by others but  is  not
published  and  therefore inaccessible to this approach, the next
level of safeguard should be considered. However,  it  should  be
noted again that software_related applications do not differ from
other applications in this regard.  The second safeguard  is  af-
forded  by the current reexamination process. Those who are aware
of  prior  art  which  might  render  a  patent   issued   on   a
software_based  application  invalid may initiate a reexamination
of the patent, and I commend you for your intent to improve  that
process.   A third safeguard results from the practical realities
of patent enforcement.  The cost of patent litigation are  suffi-
ciently  high  that one holding a patent of8stionable validity on
software would think twice before instituting a court battle when
advised  of  prior  art which would invalidate the patent.  Hence
there are clearly several  current  safeguards  to  address  this
first concern.

The second concern, that the patent process is costly and  there-
fore  only available to big companies must be considered in light
of the fact that in other areas of technology, patent filings  by
small companies and individuals are quite high. In recognition of
the value of innovations provided by small entities and individu-
als,  those that qualify are entitled to pay reduced filing fees.
In addition, it will soon be appreciated that in the software in-
dustry, as in other industries, the total cost of procuring a pa-
tent, typically somewhere between five thousand fifteen  thousand
dollars  depending  upon  what  part of the country you're in, is
small compared to the value of patents and certainly  small  com-
pared to the cost of copyright litigation. While patents are more
expensive to acquire than copyrights, the old axiom, "You  get  what
you pay for," comes to mind.

Finally with respect to the concern that the  patent  process  is
too  slow,  we have a suggestion. You might consider an expedited
examination on the basis of a higher filing fee  for  those  that
would  like  to see their patents issued quickly or be prosecuted
quickly.

Our concerns as practitioners with the patent  system  relate  to
the  manner by which the examiners are currently applying the PTO
test, and the extent to which the current PTO test is out of con-
formity with the position of the Court of Appeals for the Federal
Circuit, and in that regard I'd simply like to  complete  my  re-
marks  by  saying that we're very much encouraged by the position
taken by the Board with respect to the Veldhuis opinion,  to  the
extent that that is in conformity with the Arrhythmia decision of
the Court of Appeals for the Federal Circuit.

So to conclude, it's our opinion that what is needed in the  sys-
tem  is an adoption by the patent office of a test that'@nsistent
with the case law, a cadre of examiners that  understand  how  to
apply  this  test,  and in this regard I should note that I think
Mr. Goldberg has done an excellent job of training the examiners,
but  __ they're coming along, but with a little more help from us
practitioners on the outside I think they'll get it right at some
point.  But  I  would  advise  any  company  or individual with a
software_related invention to consult with a qualified  attorney,
experienced    in    the    preparation    and   prosecution   of
software_related patent applications with respect to  the  advan-
tages and disadvantages of the various forms of protection.

With these elements in place, all concerned  will  recognize  the
viability  of  the  current system of examination with respect to
software_related inventions and innovations.

Thank you.

COMMISSIONER LEHMAN: Basically it's your position that  we  don't
have much of a problem, right now, as I understand it.

MR. BENMAN:  That's basically my position. I  favor  the  current
system.   I think that D we get the bugs worked out, when you ac-
cess the other sources of prior art, everybody will find that the
system works pretty well.

COMMISSIONER LEHMAN:  Do any of my colleagues have any  questions
or  concluding  remarks for this morning?  If not, we will recon-
vene at 2:00 o'clock, at which time we will hear from  Mr.  Jerry
Baker, Vice_President of the Oracle Corporation.

(Noon recess)

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