RYAL POPPA

STORAGE TEK

MR. POPPA:  Good morning, and thank you very much. I'm  going  to
be  answering  principally  the  Question  4  on whether the cir-
cumstance or the framework of the current  patent  law  preserves
c|tition.

Quick background on Storage Tek, we  are  a  twenty_five_year_old
company,  start_up,  much  like you see here in the Valley. We do
about one and a half billion, have ten  thousand  employees.   We
belong  to  many organizations, the CCIA, Computer and Communica-
tions Industry Association; ESIS and ASIS, the European  and  the
American Committees on Interoperable Systems; AEA, American Elec-
tronics Association; and the IEEE, the  Institute  of  Electronic
and  Electrical Engineers.  All of these are very pro_competitive
in their attitudes, and that's the principal reason we belong  to
them.

For the record, we have over three hundred  programmers  cranking
out  programs  all  the time, we have lots of patents and we have
the same risk everybody else does. In the industry though  we  do
build  principally  data storage devices that are attached to all
the major mainframe manufacturers of the world, eighteen at  this
time,  and  many networks.  We do support patents in every sense,
as applied to the area of software, with one excon.   We  believe
we  have  to  have continued decompilation rights to maintain in-
teroperability when needed.  Modern APIs or mandatory APIs  would
do  the  job __ application program interface __ but frankly most
companies do not want to do this, but that would be a solution in
addition to decompilation.

In supporting the thesis of "pro  competition"  I  want  to  give
three illustrations.

One is old Ma Bell; we all know what it was like in the old days,
very  bureaucratic,  very  successful, it was the stock of widows
and orphans, but it was a stifling,  stultifying,  noncompetitive
environment.  The new Bell of course is growing, marvelously.  It
is competitive.  The competitive juices are flowing.   And  think
of all the new services in the last twenty years that we have be-
come accustomed to.  Auto_answer,  FAX,  networks,  fiber_optics,
cellular,  ISDN,  et  cetera,  et cetera. New companies; MCI, the
WilTel's, the Sprints, et cetera, and new related industries  de-
fined  by  companies  such  as  Novell with software, and NSC for
hipeed data transmission, McCaw for cellular,  Hayes  for  modems
and  the  list  goes on and on and on as you well know.  But this
flowed out of a pro_competitive stance, a break_up of a  company,
and  it led ultimately to [DarvdaNet], InterNet, and the informa-
tion highway.  That was the genesis of that kind of program.  To-
day  we've globalized that communications capability all over the
world and we continue to do so by freeing our telecommmunications
capability.

A second illustration is, in my  principal  industry,  computers,
leader  of  the  industry,  IBM, fell upon hard times. We all are
aware of that.  They are correcting that problem and will clearly
return  to  health.  But they fell into a pattern of being in the
sixties and seventies highly competitive, and then they went into
a  protect  mode, where they were trying to hold onto their base,
hold onto their  customers,  and  as  a  consequence,  they  fell
behind,  they  became anticompetitive, and as a consequence, they
began to lose the competitive juice, and even today of  the  com-
ments  made  by  their  own officers saying that we have lost the
will to compete.  They're getting it back, they will return,  but
it  was  because they lost their desire to win.  Part of that was
the intense, massive fight over copyrights and patents,  protect-
ing  in the court, fighting in the courts rather than fighting in
the customer arena to save the customers and keeping them  happy.
No  new  ideas were allowed in the seventies and eighties.  Where
did the PC come from? or the mini? or the workstation?   Not  out
of  the big companies. They came out of the start_ups, where they
could get the proper patent and copyright protection.  But often-
times  decompilation is part of that because you have to maintain
interoperability __ very fundamental issue.

I sincerely hope that Lou Gershner  understands  that  there's  a
smothering effect of too extensive use of patents and copyrights.
It destroys the design capability of  the  company  because  they
don't  look  to get their products to market quickly, they design
poatents and protection, and therefore it doesn't really work  to
their  great  benefit.  In the last six years, we along with many
of our colleagues, have opposed the forces in  Europe  that  have
been seeking to use copyright and patent protection to limit com-
petition, and as you well know, the EC finally came down  on  the
point  that decompilation is legal, desirable, when necessary for
interoperability, and that's the only thing we  look  for  __  no
piracy,  no  cloning,  no copying, no replacement of the program,
but interoperability. That must be preserved.

The last example is the  information  highway.  This  is  not  an
economic debate in the way it was between Bell and IBM, but rath-
er it is a competition of ideas, of interchange, of the  exchange
of  relationships  over  the Internet, as you __ if you follow it
and see what goes on, it is used in many, many ways.

I would add a challenge to you, because of that Internet. Looking
for  data the way you are, and in your opening statement you said
you're actively looking foras from our society, put  out  on  the
Internet a question. Should decompilation be allowed for the pur-
pose 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 __

COMMISSIONER LEHMAN:  Could you explain that?

MR. POPPA:  Applications Program Interface?

COMMONER LEHMAN:  Right. Well, API, but what would be a mandatory
API?

MR. POPPA:  Well, literally in law saying that a second vendor or
a  third  vendor  would have rights of access to the base code so
that they could understand it, so that  they  could  build  their
code  to  interact  with  it and interoperate with it. Today most
companies are locking that up on an object_code_only  basis,  and
not allowing us to see it.

COMMISSIONER LEHMAN:  To some degree this is an antitrust  issue,
and  my  colleague,  Ann Binghamen, who is the Assistant Attorney
General for Antitrust over in the Justice Department has indicat-
ed that she's going to put together a task force to start working
on these problems, and it may well be that this sort of mandatory
API  idea  should  be explored in that context. In a sense that's
more of a, I think, an antitrust kind of a solution to this prob-
lem as opposed to an intellectual property solution.

MR. POPPA:  We think that's a good  alternative.  We  would  also
hope  that  within the structure of the PT could get a clear dis-
tinction, as they have done in the EC, but I don't think they did
it  as  clearly  as  they should.  They left it a little unclear,
such that some people are going to be able to say, Well, Gee, for
interoperability I can really replace the program.  We are not in
any way supporting that position; only that we should be able  to
access  the  program so that we can look at it and make sure that
we can make our programs talk  to  each  other.   Nothing  beyond
that.

My last point, and it's really a picture worth a thousand  words:
a  terminal  device  we're  all  well_familiar with. It is a very
standard device, but it also comes with an  information  network,
with  a  very standard interface. It's a telephone.  But when you
take patents and copyrights and you tighten them down  such  that
you  could  not in any way see the inside of the machine, what we
do is we cover up the access port, we take the  network,  we  cut
off this end so you can't see the interface, and we say, Now, Mr.
Engineer, make them interact. that doesn't make  any  sense,  be-
cause  it isn't just a telephone, it's a computer with three mil-
lion instructions in it, and this network has on  the  line  hun-
dreds  of  terminals  with  other  millions  of instructions, and
therefore decompilation and  interactivity  must  be  maintained.
Please.

Thank you very much.

COMMISSIONER LEHMAN:  Thank you very much.  Do  any  of  my  col-
leagues  have  anything  they  want to add?  Thank you very much.
Thanks for coming over.

MR. POPPA:  You bet.

COMMISSIONER LEHMAN:  Next I'd like to call William Ryan  who  is
representing  the  Intellectual Property Owners Incorporated, but
is directly with AT&T.

Back to The San Jose Index

Forward to William Ryan