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Saturday, August 12, 2006

Innovators Should Make a Strong Case for Patents

Innovators should make a strong case for patents

Stephen Y. Chow

Chow , a partner in the Law Firm of Nutter , McClennen & Fish , is a patent and copyright lawyer representing emerging and international technology firms .

In the press , the warnings have been sounded: The increase in patenting computer software is stifling innovation. But now comes a new twist on the same theme - copyright laws. On June 28 , the Federal District Court in Boston handed down a decision in the Lotus-Paperback Software dispute that may pose , through copyrights , a much more palpatable threat to software innovation . Immediately , following the decision , Lotus filed additional suits against competitors who expressly emulate aspects of Lotus 1-2-3 spreadsheet.

The reward of property rights is an important incentive for innovation. However , the Lotus decision and others that may follow it place in sharp focus the competing concerns . Shoudl the incentive granted for the development of an extremely popular user interface include the right to bar from the marketplace other innovative computer programs that were independently developed but which use the same extremly popular user interface ?

The answer to this question should be based on consideration of all available incentives, not just opyrights. I submit that the U.S. patent system , as applied to computer software provides more safeguards for a subsequent innovator than the U.S. copyright system. Simply put , patents are a better incentive for promoting and protecting innovation than copyrights.

A U.S patent may be obtained only after substancial examination by the U.S. Patent and Trademark Office for " novelty and nonobviousness in light of existing technology " and grants certain exclusive rights for 17 years. In contrast , a U.S. copyright exists automatically upon being recorded in some medium, including magnetic media such as software. This happens without examination by any government agency and continues ( in the case of computer software) for 75 years .

Even at the time of enforcement , copyrighted works are scrutinized only for minimal originality - not the novelty and nonobviousness of patented innovations . Because most software copyright owners keep source code versions of their software secret , there really is no scrutiny at all of the innovation in that package . In contrast a patent is granted only
in exchange for disclosing to the public what is determined by the patent office to be truly
" new" . This promotes subsequent innovation .

It is true that patent rights - exclusive rights for making , using or selling the invention as claimed - are more extensive than copyrights , which protect only agains the actual copying of a work. However , court decions such as the recent one in the Lotus case , may allow the achievment of patent-like exclusivity through copyrights by expanding what constitutes a copyrightable work.

In the Lotus decision , a portion of the popular 1-2-3 spreadsheet was found copyrightable and infringed upon. The infringed portion consisted of two parts : the sequence of keystrokes to initiate certain functions of the program package and the screen display . Because screen displays for spreadsheet programs are obviously - if not necessarily - similar the focus was on input sequence.

Copyright law expressly does not apply to processes , while patent law does, The court in the Lotus case dud not consider the U.S. patent law , which does not apply to " new and usefull processes " even though what was protected in the decision could be likened to a process.

Lone Spreadsheet

If Lotus ultimately prevails on appeal and its new lawsuits , it will have established the right to exclude any use of its extremely popular user interface for 75 years . This would happen despite the fact that the development of the interface came in part from its less successfull fore-funner Visicalc . No examination of whether 1-2-3-'s user interface was truly innovative would have been made . The only test was whether Lotus was truly innovative was that it was succcessfull in the marketplace . If Paperback Software had been allowed to continue , it would would have potentially proven itself as well.

Meanwhile , as the European Community approaches its 1992 target for the creation of a "single market" , there is a significant effort to exclude copyright protection for software interfaces in the interest of development of compatible software. Also , mulilateral trade-driven negotiations among industrialized and developing countries are proceeding toward an itnernational harmonization of patent laws.

It is too simple to say that patents are bad for software innovation and copyrights are good : Promoters of innovation , law-makers and the pubic should be aware not only of the diffirences between our patent law and opyright laws , but of how they actually promote innovation in the context of a globalized economy.

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