EDWARD Y.W. LEMON, III,

SOFTWARE ENGINEER

NETWORK COMPUTING DEVICES

MR. LEMON:  Howdy.  I would like to thank you for providing me an
opportunity to give my comments.  My name __ normally, people call me Ted
Lemon.

COMMISSIONER LEHMAN:  I assume that's the way you wanted me to announce you,
Edward Y.W. Lemon, III, no?

MR. LEMON:  No.  It just says that on my passport and voting record.

COMMISSIONER LEHMAN:  Just Ted, okay.

MR. LEMON:  So anyway, I am software engineer at Network Computing Devices,
speaking just on my own behalf, not on the behalf of Network Computing
Devices.

And I'm basically here to give you a message that I think is very important. 
I know quite a few software engineers, I know very few that argue in favor
of software patents.  I believe that we do not need patents on software. 
Most of us don't want patents on software, and I believe that patents will
actually hurt us very badly.

For example, the IBM guy just mentioned that in 1965 __ that was the year I
was born, by the way __ they sold 18 billion dollars a year in software. 
1965 was 15 years before Diamond vs. Diehr, the first software patent that's
widely acknowledged.

COMMISSIONER LEHMAN:  I think he might have gotten that date wrong.  I think
he meant __ he said 1962, I think he meant 1992 because I don't think in
1962 __ they said they had a 6 billion dollar research budget, I don't think
in 1962 IBM sold 15 billion dollars worth of stuff, or if they did it was
just about that.  So I think he was __ I think it was probably 1992.  I
should have probably clarified that point.

MR. LEMON:  In any case, I actually have to say that I found that number
quite astounding too, because I didn't think that the entire market was that
big in 1962, but I was willing to take it.

However, the software market has grown dramatically over the course of the
last two decades, and I don't think that that growth can be attributed to
software patents in any way.

Let me see if I can come up with a couple of other examples here.  As
another person mentioned a few minutes ago, the difficulty in developing
software is not in coming up with interesting new innovations.  The
difficulty in developing software is taking innovations, putting them
together and producing a complex system that does what you want.  That's a
very difficult thing to do, but I don't know of any way that you can really
patent it.

And certainly, I would like to see great rewards being given to people for
doing that thing, but again, the patent system is not the way to provide
those rewards.

Now, on the subject of how patents will hurt us, I can give you a couple of
examples from my personal experience.  I've worked at four companies in my
life, starting with a company back East called New Media Graphics
Corporation, and of those four companies three of them have been sued by a
company known Cadtrak.

Actually, I am not sure that this actually proceeded to a lawsuit, they may
have settled before a lawsuit was made, but I know for a fact that all three
of those companies have been approached by Cadtrak, have been told that they
were violating or infringing on the Cadtrak patent and have paid substantial
sums of money to Cadtrak for the privilege of not being sued essentially.

The Cadtrak patent is widely acknowledged by most people, I've never heard
of anybody saying that the Cadtrak patent is an example of a patent that
should have been issued. It's a very old patent.

COMMISSIONER LEHMAN:  Does that mean you think that that Cadtrak patent was
an invalid patent?

MR. LEMON:  Yeah, I think that it fails the test __

UNMIKED VOICE:  We have prior art on it.

MR. LEMON:  And in addition to the prior art which this person has
mentioned, it clearly fails the test of obviousness. It's based on a simple
mathematical principle and there is no other way to do the thing which the
Cadtrak patent claims to do. And not only is there no other way to do that,
but the thing that you want to do is very obvious, drawing a cursor on the
screen.

COMMISSIONER LEHMAN:  So but the essence of the problem here then is that
there's been a statement here that there was a patent issued that didn't
meet the test of patentability.

MR. LEMON:  Right.

COMMISSIONER LEHMAN:  And now, in effect it's being used to extort money out
of people, and they just, you know, buy into the extortion scheme and then
they pay up rather than solve it.

It reminds me a little bit of the old thrillers that you used to see on
television when I was a kid about the Mafia holding up the candy store, and
people would let that happen, you know, getting protection money out of
them.  And every once in a while the vigorous prosecutor would come along
and the uncorruptible police officer and stop the business.  Maybe that's my
role to do that __

(laughter __ applause)

MR. LEMON:  Well, that would certainly be appreciated.

COMMISSIONER LEHMAN:  __ but it doesn't necessarily mean that the answer in
those days would have been to do away with the law.

MR. LEMON:  That's absolutely true.

COMMISSIONER LEHMAN:  And so as I mentioned, we do have a capacity to take
some look at these things ourselves, and maybe we should start doing that
more.  Anyway, please go ahead.

MR. LEMON:  Well, a further example on that subject is another patent which
I'm sure you've heard bandied about here before which is the Natural Order
Recalc Patent.  I don't know that the Natural Order Recalc Patent is
obvious, and I think there may exist prior art, but nonetheless, the Patent
Office wasn't aware of the prior art.  And if there hadn't existed prior
art, one might argue that the Natural Order Recalc Patent would be valid.

However, the Natural Order Recalc Patent, is a technique which I personally
independently invented, and I'm not saying this to blow up my own ego, I'm
just saying that I personally invented it and thought nothing of it, when I
had been working in the industry for a year.

It's a very simple concept, and I can't think of any other way that you
could solve the problem which is intended to be solved.  However, it's
complicated enough that I could easily see where it could be granted a
patent.  And if this is not an example of something like that, then
certainly there are other patents which would be valid under the current
scheme of things.

Now, the problem with that is that, as I was saying before, software is
built of large complicated systems, and these systems require small building
blocks like the Natural Order Recalc Patent.  The Natural Order Recalc
Patent is a trivial part of most of these software systems.

The difficult part of creating software systems is having a user interface
that people can use, making sure that it doesn't break when you give it the
wrong input, designing a whole system of processes.  Many of which one could
easily imagine patenting, designing this whole system of processes to
produce a final end product.

Now, there are of course parallels in other industries, but the difference
is that in the software industry, these processes are not only __ these
simple processes that we use to build the systems are processes that one
would come up very easily simply in the process of designing the whole
system. They're not something where you would have to go out and learn about
someone's new technology and incorporate that technology.

To be honest with you, I very rarely do any research at all personally.  I
never look up prior art in the field.  I mean, I read journals to some
extent, but in general the journals speak about these systems that I'm
telling you about, they do not speak about the small simple techniques.

And so when I create a program, that program is made up of things which have
been __ I mean, I have examples here __ which have been patented, and which
one could easily argue are patentable.  And unfortunately that means that in
the process of building this valuable thing, I am subject to being sued by
people who have created small tiny things which are of no value.

And that means that in theory at least when I write a program, I have to go
research all the little nuts and bolts that I use to build the program.  I
have to go learn about all these things.  I don't have time to do that.  And
frankly, I don't think that most people that are working in the software
industry in startup companies have either the time or the money to do that.

The result being that there is a __ if software patents become as widely
used as patents on things like systems within automobiles or something like
that, then essentially the entrepreneurial spirit of the industry will die.

I have this dream that someday I will be able to start my own company and
sell software.  I happen to be a believer in free software, so the mechanism
for that may be a little bit difficult.

(laughter)

But I believe that the way the industry has been in the past, I should be
able to form that company and I should be able to make a good living at it. 
However, if software patents become as prevalent as patents in cars and
hardware for that matter, I won't be able to form that company, and I won't
be able to make a living.  And that is why I do not want to see software
patents continue as they appear to be.

And one other thing, I wanted to address a point that somebody else brought
up earlier.  Just because something is done in software does not mean that
the hardware patent is equivalent, or rather just because something can be
done in software does not mean that the patent on the equivalent hardware is
equivalent. Because the hardware implementation is generally much more
useful, and if it isn't, the software will outsell it.

So if you have a patent on something which can be done better in hardware,
then by all means do it in hardware.  And if you don't have a patent on
something that can be done better in hardware, then the fact that it can be
done in software will mean that your hardware won't sell.  So I don't see
any reason why we should be concerned about the fact that hardware and
software can do the same things.  It's really not relevant.

I think that really concludes what I need to say here. So if you have any
questions, I would be happy to answer them.

COMMISSIONER LEHMAN:  Thank you very much.  I appreciate your taking the
time to share your concerns with us.

You know, I would like to make a point, __ a number of witnesses ago, made a
point that we have, you know, it seems like half the people are lawyers who
are here testifying, I'd like to point out that in no sense was our witness
list rigged.  We put out an announcement, we put it out on this Internet, we
tried to make it available to everybody.

So basically what you see in terms of the people who are here are people who
have an interest and took it upon themselves to come and share their time
with us, and their thoughts with us.  And by the way, I really appreciate
that.  I'm getting paid for sitting here, some of you aren't __ some of you
are, some of you aren't.  And we appreciate the fact that some of you did
take out of your own time and your own busy lives to come here and talk with
us.

The world is imperfect, I wish we could sort of drag out all the people that
probably had other things to do who might be able to enlighten us, but
that's just the way it goes.  But I do think we're getting a pretty good
picture, a pretty good cross section of views on this.  Even though there
are awful lot of lawyers here, we're hearing from a lot of non_lawyers too.

So our next witness is Roger Schlafly of Real Software. You have the real
software that really should be patented then I guess.

MR. SCHLAFLY:  Yeah, right.

COMMISSIONER LEHMAN:  The original software.



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