DOUGLAS BROTZ

ADOBE SYSTEMS, INC.

MR. BROTZ:  Good morning, Mr. Secretary and members of the Panel.
My  name  is Douglas B.. .  I'm Principal Scientist at Adobe Sys-
tems, Incorporated, and I am representing the views of Adobe Sys-
tems  as  well  as  my own.  Adobe is a software company based in
Mountain View,  California.   We  are  most  well_known  for  our
PostScript language and interpreter which provides foundation for
desktop and electronic publishing.

Although I am a computer scientist, I became involved in  patents
when  Adobe  was  contacted  by another company regarding Adobe's
possible infringement of a patent. I'm currently Adobe's  techni-
cal advisor to our patent attorneys.

Let me make my position on the patentability of software clear. I
believe that software per se should not be allowed patent protec-
tion.  I take this position as the creator of software and as the
beneficiary  of the rewards that innovative software can bring in
the marketplace.  I do not take this position  because  I  or  my
company  are  eager to steal the ideas of others in our industry.
Adobe has built its business by creating  new  markets  with  new
software.   W$ke  this position because it is the best policy for
maintaining a healthy software  industry,  where  innovation  can
prosper.

The problems inherent in certain aspects of  the  patent  process
for  software_related inventions are well_known, the difficulties
of finding and citing prior art, the problems of obviousness, the
difficulties of adequate specifications for software are a few of
those problems. However, I argue that software should not be  pa-
tented,  not  because it is difficult to do so, but because it is
wrong to do so.

The software marketplace requires constant innovation  regardless
of  whether the computer programs can be patented or not. Indeed,
the fundamental computer programs and concepts on which  the  en-
tire industry is based were conceived in an era when software was
considered to be unpatentable.

For example, when we at Adobe founded a company on the concept of
software to revolutionize the world of printing, we believed that
there was no possibility of patenting our work. That  belief  did
n(top  us from creating that software, nor did it deter the savvy
venture capitalists who helped us with the early  investment.  We
have done very well despite our having no patents on our original
work.

On the other hand, the emergence in recent years  of  patents  on
software  has  hurt  Adobe and the industry. A "patent litigation
tax" is one impediment to our financial health that our  industry
can  ill_afford.   Resources that could have been used to further
innovation have been diverted to the  patent  problem.  Engineers
and  scientists  such  as myself who could have been creating new
software instead are working on analyzing patents,  applying  for
patents and preparing defenses.  Revenues are being sunk into le-
gal costs instead of into research and development. It  is  clear
to  me that the Constitutional mandate to promote progress in the
useful arts is not served by the issuance of patents on software.

Let me illustrate this burden with some figures. The case  Infor-
mation International Incorporated v. Adobe, et al........,s filed
five years ago.  Last year the trial court ruled for Adobe, find-
ing  no  infringement.   In  December  the  Appeals Court for the
Federal Circuit unanimously affirmed that judgment.  Yet, in that
time,  it  has cost Adobe over four and a half million dollars in
legal fees and expenses.  I myself have spent over three thousand
five  hundred hours of my time __ that's equivalent to almost two
years of working time __ and at least another thousand hours  was
spent  by  others  at  Adobe.   The Chairman of the Board spent a
month at the trial.  This type of company behavior would  not  be
high on anyone's list of ways to promote progress.

This state of  affairs  might  be  acceptable  if  there  were  a
corresponding  benefit for patents in the software industry. How-
ever, I see none. Companies that have trumpeted their fundamental
software patents are not leaders in software innovation.  Confer-
ring monopoly positions in an industry that was already the  most
innovative  of  all will promote stagnation rather than increased
innov0n.  When companies turn from competing by offering the best
products  to earning money by the threat of patent litigation, we
will see our best hope for job creation in  this  country  disap-
pear.   An  industry  that  still generates tremendous job growth
through the start_ups of two guys in a garage will  not  continue
to  grow when a room for a third person, a patent attorney, needs
to be made in that garage.

There  does  exist  a  perfectly  adequate  vehicle  to   protect
creator's  rights in this industry, the Copyright Law. The nature
of software is that it is a writing, an expression of  mathemati-
cal  ideas.  The  copyright  law protects this expression, and it
does so without requiring costly and time_consuming  proceedings.
For people working in the fast_paced software industry, the way a
copyright is created is idea.  While feverishly working  to  meet
deadlines,  there  is  no  need  to explain what you've done to a
government agency.  The very act of writing the software  confers
the copyright on it.

Furthermore, the cop....4ht law confers the correct level of pro-
tection  on computer software. Regardless of what current regula-
tions may say, the fact is that  all  computer  programs  express
mathematical  algorithms.   Every  part of every computer program
manipulates numbers with logic.  Any software that  performs  any
task  does  so  through  mathematics.  It is inconsistent to hold
that mathematic algorithms are unpatentable  while  granting  pa-
tents on systems composed of software.

If the Patent Office were truly following the law it would recog-
nize  the  inherent  mathematical nature of software and it would
not grant patents to software_based inventions. In the  last  de-
cade  the Patent Office has been granting patents on software and
algorithms regardless of superficial attempts to cast  claims  as
systems  methods  or processes.  The Supreme Court did not say in
Diamond v. Diehr that pure software  inventions  are  patentable.
By  adopting this position in its recent practice, the Patent Of-
fice has made a dangerous step that could decimate the ve8ndustry
it wishes to protect.

Whenever the Patent Office grants a software patent, it grants  a
right  to the patent_holder to devastate innocent businesses. Due
to the arcane nature of this technology, our courts find it  very
difficult  to distinguish frivolous software patent lawsuits from
legitimate ones.  As a result, a frivolous plaintiff is in a very
strong  blackmailing position, where a defendant can look forward
either to an extortionate settlement or enormous legal costs.  An
excellent remedy would be to change our law to allow a successful
defendant to recoup legal costs in patent cases.  Until that  day
arrives,  at  least  our  Patent Office can refrain from granting
these dubious patents.

We have heard today from proponents of software patents who  will
claim  that  these  patents can protect the independent inventor.
This belief is a delusion.  The expensive patent process protects
large,  methodical  corporations  that  can  afford  to apply for
scores of patents much more than it protects the  poorly_capitalized
lone inventor, and when that inventor tries to produce his inven-
tion he may well find that those large corporations can ruin  his
own business with their large software patent portfolios.

In summary, these are my main points:

The software industry thrived without patents, creating its  fun-
damental  base in an era of no software patents; software patents
harm the industry, with no corresponding benefit; software  embo-
dies  mathematical algorithms; the law, starting with the Consti-
tution, argues against patents for  software_related  inventions;
and  last,  the  proper  form of protection for software is copy-
right.

As a postscript to the figures on the patent lawsuit that I  dis-
cussed  before,  the  final  figure  is actually not in. Although
Adobe has been successful twice already, the plaintiffs are  ask-
ing  for reconsideration of the unanimous appeal judgment against
them. These kinds of festering sores are  what  our  country  can
ill_afford  when  we are trying to lead the world in creative in-
dustry.

Thank you.

CO......@SIONER LEHMAN:  Thank you very much, Dr. Brotz.

You've indicated that you think that the copyright  system  works
very  well to protect software. An earlier witness, Mr. Kohn from
Borland, indicated that he felt that there were serious  problems
with  the  existing  copyright  system, and in particular he felt
that it shouldn't protect screen displays, for example.

Other witnesses have indicated that they're very concerned about,
I  believe, the witness from Storage Technology indicated that he
was very concerned about the decompilation issue.  He  very  much
believed  that  one  should be able in effect to copy software in
the decompilation  process  in  order  to  produce  interoperable
works.   I'm  wondering,  since you really believe that we should
focus on copyright, if you have views on either of those two  is-
sues.

MR. BROTZ:  Yes. I certainly do.  I agree with Mr. Kohn  that  we
should  not  confuse  strong enforcement of copyright rights with
broadened scope of copyright rights.  I agree  that  some  plain-
tiffs  have  tried Dtretch the scope of copyright beyond where it
ought to go.  I firmly support his position, in fact, that  copy-
right  law  should  protect  us  against  piracy and the kinds of
threats that copyright law was intended to protect us against.

In answer to your other question about decompilation and  intero-
perability  considerations,  I  believe  that the evidence always
cited for the importance of interoperability  is  that  companies
that  do  not  provide  for  interoperability  fall  of their own
weight. I do not see that as an argument for insisting that  com-
panies therefore make themselves interoperable.  If strong rights
are granted to all aspects of the written computer software, then
a company could choose what level of protection it wanted and how
far to assert its rights and whether they wanted  to  open  their
interface  or not.  If they make a wise decision and offer enough
interoperability, they'll do well; if they make an  unwise  deci-
sion, they won't, and it's up to them to decide whether they want
to succeed or not.

COM.....HIONER LEHMAN:  In other words, your  view  is  that  the
licensing  system  deals  with this problem, that if people don't
adopt intelligent licensing processes, then they will suffer  the
economic  consequences  which will be negative and will encourage
basically licensing that creates more open systems.

MR. BROTZ:  That's right. And I would oppose having  a  law  that
straitjackets  the  way  in  which  these  kinds  of  licenses or
accesses must be made.

COMMISSIONER LEHMAN:  Thank you very much. Does anybody else have
any questions?  Thank you.

Next I'd like to call Hans Troesch, partner in the  law  firm  of
Fish and Richardson.

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