MR. SILVERMAN:  I thank you. Good afternoon.   My  name  is  Carl
Silverman,  Chief  Counsel,  Intellectual Property for Intel Cor-
poration.  We understand that the Patent and Trademark Office  is
interested  in  obtaining  public input on issues associated with
the patenting of software_related inventions, and  we're  pleased
that  the  Patent  and  Trademark Office invited us here today to
briefly testify.

Software technology has become an integral part of virtually  all
of  U.S.  industry,  as  innovators strive to develop new and im-
proved products in today's competitive, worldwide marxlace.  Now,
this  technology  includes  pure  software, and software which is
combined with hardware, so for example, Intel  Corporation,  like
other  successful  high_technology companies, invests the efforts
of its engineers and large sums of money, the  shareholders'  mo-
ney,  to develop software_related technology.  In 1993 alone, In-
tel Corporation invested nearly one billion dollars  in  research
and    development,    including    a   substantial   amount   in
software_related technology.  We  also,  we,  Intel  Corporation,
also invested nearly two billion dollars in capital to build fac-
tories so that we can build these advanced products.

These advanced products include products such as our Pentium pro-
cessor.  This  is  a  microprocessor with more than three million
transistors on a single chip.  This  microprocessor  product  in-
cludes  software  technology  in  the form of microcode and other
computer programs.

Now, to protect and encourage this kind of vast U.S.  investment,
and   I'm  referring  to  both  the  technical  as  well  as  the
financ|aspects, and, to promote the development of  new  and  im-
proved  products, we at Intel believe that software_related tech-
nology should continue to be afforded the opportunity  to  obtain
patent protection.

The patent system has consistently provided an incentive  to  ex-
pend  the kind of technical and financial efforts previously tes-
tified to to develop new technology,  including  software_related
technology.  In the United States the Patent and Trademark Office
carefully examines every patent application against prior art  to
insure  that  only the novel and nonobvious inventions obtain pa-
tent protection.  Software_related technology is no different.

We support the current statutory law concerning patents  as  well
as   its   interpretation   by   the   courts   as   relating  to
software_related inventions. We are currently aware of no  alter-
native  to the patenting of software_related inventions that will
better_serve our industry than the current patent laws.

Further, we believe it would be a mistake to treat the  patenting
of sare_related inventions differently than the patenting of oth-
er utility inventions. In this regard, Patent and  Trademark  Of-
fice  and the courts should be left free to develop the extent of
patent protection for software_related inventions and its  enfor-
ceability  on  a  case_by_case basis until such time as it is ap-
parent that the courts are not up to the task.  This time is  not
at hand, rather, the courts for the most part are both interested
and concerned about protecting innovative  technologies  such  as
software_related inventions.

Now, this is not to say that the  current  system  for  patenting
software_related  inventions  is  not without opportunity for im-
provement. For example:  We understand that the Patent and Trade-
mark  Office  is working to improve its library of software prior
art so as to improve its ability to examine  patent  applications
in  this  area.   We support this effort.  We urge the Patent and
Trademark  Office  to  increase   its   capability   to   examine
software_related  patent applications by taking whatesteps neces-
sary to establish the best prior art software library and to  in-
crease  and_or  redeploy  the  number of patent examiners who are
knowledgeable in this crucial area.

On behalf of Intel Corporation we thank you for providing us with
the  opportunity to present our views on this subject, and we are
delighted that the Patent and  Trademark  Office  has  encouraged
this  free flow of ideas so that we as a country can do the right
thing here.

Thank you.

COMMISSIONER LEHMAN:  Thank you very much, Mr. Silverman.

What's your view on the idea of prepublication that has been men-
tioned  several  times  this morning here, that that would be one
way of making certain that we  wouldn't  overlook  some  priority
that we might already have missed.

MR. SILVERMAN:  I apologize, Mr. Commissioner, for not being here
this  morning;  I  know generally the subject of publication, and
oftentimes patent applications end up being published  anyway  as
they're  filed  in  non_U.S.  jurisdictions,  and I think that is
perhaps a vehicle whichd simplify some of the issues that are in-
volved here. So I think we're open on that one.

COMMISSIONER LEHMAN:  So you don't find that inherently offensive
at Intel.

MR. SILVERMAN:  No, I don't.

COMMISSIONER LEHMAN:  One other question, too, and that  is,  you
know,  I  remember  the last time that I was in San Jose actually
was sixteen years ago, and we were at the other end  of  downtown
here  at  the  old  Santa Clara County Courthouse, and we had the
first set of hearings. At that time I was Counsel  of  the  House
Judiciary  Committee,  and  we had our first set of hearings that
led ultimately to the legislation that became  the  Semiconductor
Chip Protection Act of 1984, and Intel was a primary component of
that.  You were having problems with unauthorized reproduction of
your  semiconductor  chips way back then, and ultimately Congress
responded by creating a new form of intellectual property protec-
tion,  and  I'm wondering if you have any thoughts as to how that
system is working and is  the  existing  patent,  copyrighd  mass
works  protection  regime adequate, or in your particular area do
you feel a need for either a  strengthening  of  the  mass  works
legislation or some alternative to that?

MR. SILVERMAN:  The Mask Works Act, I think, was  very  necessary
at  the  time in which it was created, and I think it's been suc-
cessful with regard to those who would  copy  other  person's  or
company's  products.  I think it's been effective there.  I think
these days, however, it forms a piece of the overall intellectual
property protection available in this country.  I think it made a
lot of sense to do that then.  I don't think it makes  any  sense
to do a similar type of protection mechanism for software_related

COMMISSIONER LEHMAN:  Basically you feel that you have an  exist-
ing  intellectual  property regime with these three forms of pro-
tections that meets your needs, and it's  really  a  question  of
tightening  up  on  it,  and I know you have strong international
concerns, but it's really a question of enforcement and  tighten-
ing uhere's no really fundamental problem with it.

MR. SILVERMAN:  That's correct.

COMMISSIONER LEHMAN:  Okay. Thank you very much.

Next I'd like to call Kaye Caldwell, President  of  the  Software
Entrepreneurs  Forum.  Maybe  you  can tell us a little bit about
what your forum is, too.  It seems to me you  were  at  the  Bree
conferences before, weren't you?

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