MR. MAY:  I want to thank you very much for coming out to Silicon
Valley  and  also for slipping me in unannounced. I'd expected to
be out of town today and at  the  last  moment  my  travel  plans

I want to give a quick perspective on the lay of  the  land  from
Ikonic  Interactive. We're a soft` developer located in San Fran-
cisco.  We're a multimedia developer with about nine years of ex-
perience  in  this business.  Current clients include Time Warner
for whom we're designing the user interface and software for  the
full_service  network  in Orlando, Florida; Dow Jones for whom we
just recently completed the redesign of the Wall  Street  Journal
for  PDAs;  a variety of other projects.  So we're intimately ac-
quainted with some of these issues and I'd like to just give  you
a snapshot of some of our perspective.

I spent my morning on the phone with one of our clients negotiat-
ing  contracts,  and I should say, number one, I am not an attor-
ney, and it's only through the tutelage of Kate  Spellman  up  at
Steinhart  and  Falconer,  our  IP attorney, and David Hayes down
here at Fenwick and West that I know just enough to be dangerous,
but  notwithstanding  that,  I often rush in where angels fear to
tread, and I wanted to discuss two key issues that we face  every
day,  and  just  to  give  you  some  data  with  which  to  make

I should also say in the spirit of full disclosure, we do have  a
software  patent  application  under  way, another one that we're
considering, and I come here as a  supporter  of  the  notion  of
software  patents, and more specifically, interface patents. Not-
withstanding that, a single biggest problem I'd say from a  busi-
ness  exposure  standpoint  is  that  we  are  often asked by our
clients to indemnify them, that we have  not  incorporated  prior
art  or  other  patents in our work. Given the way that the prior
art search has to be conducted at this point it's very very  dif-
ficult  for  us  to  indemnify  our  clients to that, and I would
respectfully suggest two possible solutions to that.

And the first would be that in my midnight reading of patents and
patent  law,  which  I've  been  doing  the last year or so, I've
learned that things like the Compton's patent have many many many
claims  attached  to them, and it's very very difficult to under-
stand, let alone plan for the implications of those claims.  Ori-
ginally  as  I uhstand it, patent law was designed to address in-
ventions that were reduced to practice, and it seems to  me  that
it might be a useful distinction to separate claims very specifi-
cally to those that are actually  reduced  to  practice  and  are
shown  to  be  reduced to practice and those that are speculative
and looking for future technologies.  And as a  nonattorney  I've
got  a  very  difficult  time when I'm faced with trying to judge
that and then promise in a contract that I will in  fact  not  __
not infringe on those claims.

Number two, recently the FCC decided to free up 10(k)s and  other
public  filing  information and make that available on the Inter-
net; previously it was available on Meade  and  I  believe  maybe
Lexis and Nexis. Currently I'm not aware of a way to research pa-
tent information by public, without signing onto Lexis,  undergo-
ing  quite an expensive search process, and insofar as it is pub-
lic information I'd like to urge you  to  make  that  information
available  on  the  Internet and make it available publicly. lond
issue that we're confronted with very frequently, and this  wraps
around both patent issues and copyrights and others __

COMMISSIONER LEHMAN:  Can I ask you a question. What kind of  in-
formation  for  somebody  like  you  would  be  useful? You know,
there's everything from the full text of prior_issue patents  and
all  of the company technical drawings to, you know, abstracts of
the patent.  What kind of __ when  you're  talking  about  making
things  available  on  the  Internet, what kind of information of
that type would be useful to you?

MR. MAY:  Yes, sir. Given the example that I just  gave,  from  a
business  person's  perspective, I'd like to see the whole thing,
because I'm being  asked  to  indemnify  my  client  against  all
claims.   A  helpful start would be the abstract, but lamentably,
I've got to be familiar with the art to the extent that I can be.
It  would  help me very much if there were to be drawings, et al.
Does that answer your question?

COMMISSIONER LEHMAN:  Yes. Yes, it does.

MR. MAY:  Okay. The secoprea that we experience in day_to_day  is
again  as I said, broadly a problem across both patent law, copy-
right law, and I'd like to just raise it in the context of patent
law  here  today, and that is the difficulty between what current
practice is and what we'd like to see practice moved to, and that
is  the  concept  of work made for hire wherein typically a small
company like ours is doing work for a larger client, who attempts
to  get us to engage in that work under work made for hire, which
means that, as you know, they own all  patent  rights  and  copy-
rights  and  trade  drafts,  et cetera. Very difficult to conduct
business in this way and to grow a business in this way.

So we've been successful ourselves and I  urge  other  folks  out
there in our business to move to a license strategy where in fact
we retain the rights to underlying key concepts and  intellectual
property  that  we  develop  and  license that in perpetuity on a
royalty_free basis to our client.

One of the key problems with that approach is the ambigutin copy-
right  law between what's called look and what's called feel, and
I would urge you and the folks you work with to turn your  atten-
tion  to that ambiguity and try to address that, and the specific
case in point is that when we're faced with producing  a  project
for  say  Time  News On Demand for Time Warner, it's one thing to
grant them the rights to look at that  program  and  morally  and
ethically and by all other business means, I'm absolutely commit-
ted not to producing work for  another  client  that  copies  and
looks  the  same  as the work that I do for my initial client. At
the same time, in the pursuit of my business, we often enjoy  the
discovery of elements that help us do the job better for the next
person, and the current ambiguity in copyright law makes it  very
difficult to parse out, to separate out what is look from what is
feel, and feel, as you know, in the Apple Microsoft Case has been
pulled out to mean basically menu command structures, things like

So that's the underlying structure that wxed to have in  what  we
call our multimedia toolbox in order to ply our trade, and to the
extent that we are forced by circumstance or by the size  of  our
business  in  the  marketplace  to  give  up  those  rights  in a
work_made_for_hire scenario, it's very difficult for  us  to  ply
our  trade in the future. Like the carpenter being told that they
can't use a particular jig that makes them drill holes faster, it
cuts down on our efficiency and our ability to carry on our busi-

So I wanted to bring these two points to mind just to give you  a
snapshot of what it's like out here on the frontier of the Infor-
mation Superhighway, but these are key issues for us and I'd wel-
come your attention to those.

COMMISSIONER LEHMAN:  Part of that problem that you have,  and  I
don't mean in any sense to suggest there isn't merit to your sub-
stantive ideas about scope of copyright protection, but  is  part
of  the  problem  there that in your situation when you mentioned
Time Warner, they're a client, you're a small  company,  a  small
entr|neur, that you just don't have the marketing power basically
to   avoid   being,   you   know,   strong_armed   into   signing
work_made_for_hire  agreements  that  would mean that you have to
give away more than you'd like to give away. I mean is  that  one
of  the  reasons this becomes really acute?  You just __ Ideally,
you know, you don't have to __ you work under conditions that you
want  to work under and you can say, Well, I'm sorry, I'm not go-
ing to give away some of my techniques  that  I  would  otherwise
give  away, but you just can't do that because you don't have the
market clout.  Is that a problem?

MR. MAY:  Well, I think it's tempting to paint the big company as
the  bad  guy  and the little company as the Don Quixote. I would
suggest from personal experience that large companies in point of
fact,  once  this distinction, this difficulty is raised, they're
willing to look at solutions that work for both sides. There is a
reflexive  tendency  to  turn  to work made for hire as something
that quote has been done in  the  past,  it's  always  been  good
enough.  Happily  we've been able to negotiate positions with our
clients that enables us to move forward, but yes, I think in some
instances  you're  correct,  if  you're a smaller company, if you
haven't been able to build your multimedia tool kit and you  come
in  with  just  a  hammer  and  saw  sometimes  it's  easy  to be
bulldozed, to mix my metaphors.

COMMISSIONER LEHMAN:  Thank you very much.

MR. MAY:  Thank you. Appreciate it.

COMMISSIONER LEHMAN:  Next I'd  like  to,  back  on  our  regular
schedule  here,  and  I'd like to ask Mr. Steven Henry from Wolf,
Greenfield & Sacks, came all the way from Boston.

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