SAL CASSAMASSIMA

EXXON PRODUCTION RESEARCH COMPANY

MR. CASSAMASSIMA:  Thank you, Commissioner LEHMAN, and thank  you
particularly  for  pronouncing  my  name correctly. I know it's a
struggle to get that one right the first time.  My  name  is  Sal
Cassamassima,  and  I'm  the  General Counsel of Exxon Production
Research located in Houston, Texas.  I'm  here  to  present  tes-
timony on behalf of Exxon Production Research, which for the sake
of brevity I'll refer to as EPR.

I'm going  to  address  the  subject  of  patent  protection  for
software_related inventions and $ particularly on the patentabil-
ity of inventions containing mathematical algorithms. This  is  a
very important subject to EPR, and we appreciate this opportunity
to present our comments on the subject. We will also submit  more
detailed  comments,  written comments for the record by the March
15th deadline.

Our comments will focus on the subject of  inventions  containing
mathematical  algorithms,  and  we will recommend that the Patent
and Trademark Office clarify and liberalize its guidance  on  the
subject to better align with the views of the Federal Circuit.

Let me tell you first a little bit about EPR and why the subjects
addressed  here  today are important to us. We are a wholly_owned
affiliate of Exxon Corporation and we're engaged in basic and ap-
plied  research related to oil and gas exploration and production
technology.

Our company and many other companies in the oil and gas  industry
are among the most intensive users of advanced computer technolo-
gies and applications. For example, in exploring  for  o(nd  gas,
there  is  an increasing need for highly accurate representations
of subsurface formations,  particularly  in  geologically_complex
areas.   Meeting  that  need in recent years has been an enormous
challenge for industry, particularly  with  oil  hovering  around
fifteen dollars a barrel.

That challenge is being met by rapid advances in the  application
of leading edge computer technology and the processing of geophy-
sical data which you probably know is obtained from seismic  sur-
veys.  For  example,  so_called  three_dimensional or 3_D seismic
provides much more accurate depictions of complex geologic forma-
tions   than   was   ever   possible   with   more   conventional
two_dimensional, 2_D seismic.  Advanced computer applications are
also being used on the production side of our business to predict
oil and gas reservoir drainage and to model enhanced oil recovery
techniques by computer simulations.

In pushing the frontiers of this new technology, EPR is constant-
ly challenged in several areas that are computer_related.

F, is the hardware itself. Seismic surveying and the ensuing data
processing  require  enormously powerful computers such as super-
computers and massively  parallel  computers.   To  obtain  these
various  depictions  of  3_D  seismic  you really have to have an
enormous amount of  number_crunching  capability.   In  fact,  we
think  our  industry  is second only to the Defense Department in
the use of MPPs and supercomputers.

Secondly, the industry must develop the software to both  process
the  data  and convert it into readily_analyzable forms; and this
is where we come in. Closely related  to  hardware  and  software
development  is  the  ongoing  challenge to develop sophisticated
mathematical algorithms which are the key to  enhancing  analysis
of  seismic or reservoir data.  The algorithms we develop do many
critical things in analyzing seismic and reservoir data.

For example, the algorithms enable the computer to  process  data
more efficiently. They compress data or rearrange data to make it
more  readily  processible,  and  they  en0  the  processing   of
poorly_conditioned  data  by  removing  noise or other irrelevant
signals.

Development of these algorithms and their  integration  into  the
hardware  and software usually involves very major investments in
both time and money. The synergistic combination of more powerful
computers  and  software  enhanced by mathematical algorithms has
resulted in a quantum leap in oil and gas  exploration  capabili-
ties.   Many companies are now reexploring mature producing areas
such as the Gulf of Mexico because the new technology enables the
discovery  of  reservoirs that were heretofore unknown because of
their complex subsurface geology.

The type of inventions we seek to  protect  generally  relate  to
methods  for analyzing seismic or reservoir data using mathemati-
cal 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
d4its.  Patent applications claiming methods for analyzing seism-
ic  data using mathematical algorithms have always been among the
most perplexing cases for the Patent and Trademark Office to  re-
view.   In some cases, the Office in applying the so_called Free-
dom 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 Cir-
cuit 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 1018e threshold of patentability, con-
sistency is very important.

COMMISSIONER LEHMAN:  I think that consistency in the Patent  Of-
fice  is  an  extremely  important part of customer service, so I
don't think that cliche is applicable to us at all, and  I  think
this is a very good point that you're making.

MR. CASSAMASSIMA:  The types of inventions that are  the  subject
of  this controversy all have one thing in common. They deal with
algorithms which yield a useful result.  For example, in many  of
our  inventions seismic signals are analyzed to accurately depict
subsurface geology.  In the  arrythmia  case,  electrocardiograph
signals were analyzed to detect the susceptibility to excessively
rapid  heartbeat,  which  is  known  as   tachycardia,   a   very
life_threatening  illness.   In  other  cases, we might see tech-
niques for mathematically analyzing molecular structure to screen
for  chemotherapy agents.  But let me give you a hypothetical ex-
ample that may be more meaningful,  given  recent  events.   I'll
describe this hypothetical situation:  A method of analyzing seismic
data to predict earthquakes, said method comprising combining se-
ismic  signals  using  Formula X, mapping said combined said com-
bined seismic signals using Formula Y, comparing said map seismic
signals  using  Formula  Z with a database of historically_mapped
signals to determine the probability of an earthquake.

Now of course I have no idea what X, Y and Z formulas might  con-
stitute, but needless to say, that would be a rather dramatic in-
vention.

Question:  Is the method  I  just  described  patentable  subject
matter?   And I would say that under current Patent and Trademark
Office policy, the answer is hard to concern. Should it  be?   In
my  opinion,  absolutely  yes.  The method that I just described,
claimed, is not an abstract idea of a law of nature. It is a pro-
cess  for  analyzing  real physical data to yield a highly_useful
life_saving result, the prediction of earthquakes. The earthquake
claim  does not seek to protect a generic technique for analyzing
data.  It does not claim@urely mathematical method of identifying
a  data  anomaly  by  comparing sample data to generic databases.
What it seeks to protect is a process for determining the  proba-
bility of an earthquake by comparing in a quantifiable manner ac-
tual seismic data with  reference  databases.  By  grounding  the
claim in seismic signal analysis the claim comes to life as a pa-
tentable process, and it's protected by the Patent Act.  It  does
not  matter  whether there is a discernable physical component to
the claim itself.

Inventions, such as the ones I have described, our type of inven-
tions,  the  Arrythmia case or the hypothetical, all have the re-
quisites of patentable subject matter. They are new  and  useful,
and  granting  patent  protection to them would foster innovation
and technology development, the very purpose of the  patent  law.
Absent  patent  protection, the time and the resources to develop
such new and needed technology might not be forthcoming.

We therefore recommend  that  the  Patent  and  Trademark  Office
dispense  with  Dtwo_part  Freeman_Walter_Abel test and issue new
guidance that embraces a statutory basis for determining  patent-
able  subject  matter  under  Section 101. The guidance should be
simple and as broad as the statute and judicial precedent permit.
We recommend that the word "process" be given its literal meaning
and let the guidance dispense with the notion that a method claim
containing  a  mathematical  algorithm  cite  some physical step.
Only algorithms which solve abstract  or  generic  math  problems
should  be  deemed  nonstatutory. The guidance should also direct
that the algorithm be viewed in the context of the  specification
as  a  whole, in the claims preamble.  With that approach, method
claims of the type contained  in  arrythmia  and  the  ones  I've
described would be statutory subject matter.

Finally, the guidance should make clear that in  the  absence  of
legislative  limits  by Congress, the Patent and Trademark Office
will not  impose  nonstatutory  or  policy  constraints  on  what
processes are worthy of patent protectioHuch guidance would elim-
inate the present uncertainty and would provide a  boost  to  the
type of technology that will come to dominate the Information Age
in the years ahead.

Thank you very much.

COMMISSIONER LEHMAN:  Thanks very much, Mr. Cassamassima, I real-
ly appreciate all your very specific recommendations. We'll exam-
ine those.

Next I'd like to  call  Christopher  Palermo,  another  Fish  and
Richardson  attorney.  Is  he  here?   I guess not.  In that case
we'll move on to Neil Brown.  Mr. Brown?  We're ahead of schedule
now.

MR. BROWN:  Sorry about that. I was expecting twenty minutes, but--

COMMISSIONER LEHMAN:  I know; we're a little further ahead in the
schedule  than  we  thought, mainly because the preceding witness
wasn't here.


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