Selected Papers

PATENTS AND THE INTERNET

by Steven W. Lundberg

Introduction

The Internet is the most exciting mass-market technology since the advent of the personal computer. Although the Internet has been around in one form or the other since the 1960's within the scientific computing community, the proliferation of personal computers in business and the home, and the development of graphical user interface "Web" technology, has brought it to the mass market. Already, the accessibility and ease of use of Web technology has spawned a multitude of business opportunities, including a rapidly expanding industry in establishing Web sites and providing Web creation and browsing tools, and actual use of the Web to offer or advertise products or services.

While much is still uncertain about the impact of the Web, it is clear that we are just barely at the beginning of what will likely prove to be one of the most significant technological developments of the late twentieth century. Fifteen years ago, one could hardly envision an easy-to-use electronic marketplace available to virtually anyone with a personal computer and a phone line and virtually no limit on the number of "vendors." Similarly, one cannot presently envision what the Internet will bring in the way of innovations, but it is certain that there will be many, and they will have a major impact on many industries, or create major new industries.

Already, the Internet has afforded anyone with a few thousand dollars the ability to establish a "Home Page", from which they can readily publish and distribute literature and audiovisual works. Never before has information been so easy to distribute or to access. It could very well turn out that the Internet is as significant of a development as the printing press. But this is only an example of using the Internet as a tool to do what has been done before other ways, much the same way that the initial important uses of the personal computer were as a superior substitute for preexisting technologies. Some of the most significant uses of emerging new technologies, however, are the ones that cannot initially be envisioned, such as networks of personal computers, electronic mail, and other workgroup software applications. Such new uses for the Internet, and in particular the Web, are only now being envisioned or perhaps won't be invented for some time to come.

What is also certain about what we cannot yet see is that a lot of money will be made in Internet commerce, and likely certain existing businesses will suffer as their market or modes of operation become obsolete. Some of the possible losers are the traditional publishing establishments. Without control of the distribution channel, many publishers will lose their competitive advantage, and be forced to compete with much more nimble and lower-cost competitors. Take the recording industry for example. Who needs record stores if the album of your choice can be downloaded over the Internet? Imagine a distribution system requiring no physical inventory of product and where the user provides the recording media. Music publishers will no longer need music distributors. They will be able to do it themselves, directly to the end user, at higher profits to the publisher and lower cost to the consumer. What lawyer needs Martindale-Hubbell (for the non-lawyer this is a directory of attorneys) if they can publish their own listing electronically on the Web and provide more up- to-date and comprehensive information to boot. These are just a few examples of how the Web will likely impact existing commerce.

At the same time that the Internet is exploding onto the scene, patent protection for software-related inventions is being expanded and liberalized. While software patents have been around as long as software, the law of software patents has had a somewhat tortured history. In fact, in the mid to late 1970's the state of the law was quite mixed, and certainly confusing. Even today, it remains troublesomely muddled in part. Nonetheless, some aspects of software patent law have always been clear, and the areas of greatest confusion, surrounding the patenting of mathematical formulas and algorithms, are gradually being clarified by new authority that has reinterpreted and marginalized old authority inconsistent with the more liberalized modern view. This trend, which has not been without its very vocal detractors, recently came to a head of sorts with a series of cases from the Court of Appeals for the Federal Circuit (which handles all appeals from the U.S. Patent and Trademark Office and the district courts), and newly proposed guidelines for the examination of software inventions published by the U.S. Patent and Trademark Office (USPTO)[1]. The liberalized software patent practice is also accompanied by a continued policy of permitting the patenting of software used in a business process or system, such as patents for the automatic transfer of money within cash management accounts[2], or controlling inventory in a dry cleaning establishment[3], or setting the price of seats on an airline flight.

The liberalized software patent practice is coinciding with the emergence of not only the mass-market Internet but also the continuing rapid growth of the U.S. software industry. This industry has been averaging growth in the fifteen to twenty percent range[4] for a number of years, with no slowdown in site. The number of software patents being filed in the USPTO has grown geometrically in recent years[5], and will likely to continue to grow rapidly for some time to come, as developers increasingly turn to patent protection as a primary mode of protection for computer software next to copyright and trade secret protection. At the same time, copyright protection for software is undergoing a contraction as courts apply the prohibition in 17 U.S.C. Section 102(b) against copyrighting process and systems more rigorously[6].

The expansion of patent protection for software-related inventions, the contraction of copyright protection, the inherently electronic nature of Internet, and the early point in the development cycle of adapting the Internet for commercial purposes all come together to point strongly toward the use of patents to protect new Internet ventures[7]. Internet commerce is a particularly ripe place for patent protection because it is inherently software-driven, and hence inherently subject to patent protection. This is in contrast to other businesses, where patenting non-software- driven methods of doing business remains difficult.

At the same time, the use of software patents to protect Internet commerce will also require a higher level of diligence on the part of the would-be competitor seeking to copy the successful practices of an innovator. No longer will protection be limited to the products sold by a competitor. Instead, patents will cover methods of advertising[8], distribution[9], data compression[10] and other aspects of Internet commerce one can hardly imagine at this point in time.

Internet Technology

The Internet is a world-wide network of computer networks. In 1969, ARPANET was commissioned by the U.S. Department of Defense to link important research and command sites. UCLA was the first node and by 1971, it consisted of 15 nodes, including MIT, Harvard and NASA/Ames. In 1986, with thousands of nodes existing, the NSFNET was established to set up a backbone of 5 super- computing hubs for the network. Until 1990, only government and educational facilities were connected. In that year, the first commercial Internet Access Provider started doing business. This allowed anyone to dial up to the Internet. Now, its impossible to tell accurately how many people are connected. Even if the exact number was known, it would be outdated by the time the number was published. One source just stated that the Internet now connects 6.6 million computers spanning 150 countries.[11] The number of sites, or places to visit on the Internet, is currently around 100,000. That number is doubling every 2.5 months.[12]

The Internet is a network of networks. For example, the University of Minnesota has a computer network system. One part of this system is a catalog of all of their library books. So from any of the computer terminals on campus, a student can search the library catalog by author, title, or subject. By being connected to the Internet, what happens is that anyone in the world, by knowing the U of M's computer address, can do the same thing. You can dial up from your home in Burnsville and find out what books the U has on a subject. An attorney in France can just as easily do the same thing, dial up from their home in Paris and connect to the U of M's catalog.

How does this work and how can you do it yourself? The resources available on the Internet cross-reference each other so much that we now call it the World Wide Web. This gets shortened to "WWW" or just "the Web." To access the Web, you need to have a computer, software, and an entry point into the Internet.

The computer can be either a PC compatible or a Mac as long as it has a modem which you can connect to a phone line. The entry point is a dial-up account with an Internet Access Provider. For example, AOL (America On-Line) provides access. There are a lot of other providers, such as Winternet and TCCN (Twin Cities Computer Network) located in Minneapolis/St. Paul. To find a provider, shop around and compare prices and services. Commonly, 10 to 20 hours of monthly connection time costs $8 - $15 per month. Once you set up an account with an access provider, that provider will supply you with the proper software you need to access the Internet. You will use different software programs to do different things.

Primarily, you'll have a Web Browser. The two most popular ones are Netscape and Mosaic. This program lets you easily access the different "places", called sites, that exist on the Internet. Each site has a collection of screens which can be accessed. These screens are called pages. The central page for a site is called the home page. So, the University of Minnesota has a home page, the Star Tribune has a home page, even my firm has a home page (http://www.slwk.com).

There are three ways to get to a site's home page. First, you can search it out using a "search engine." Certain organizations keep an index of all of the sites and the information stored at those sites. The browser will have a button or menu called something like "Web Search". This will let you choose from one of the several organizations offering search programs (engines). You type in the key words, such as "Internet History", or "patent law", and you will be given a listing of the sites that have that information. By clicking on the site's name, you will be taken to that site.

The second way to get to a site is by using a link. When you are at a site, that site will reference many other sites, each in turn referencing many other sites. This, again, is how the Web was named. By pointing and clicking on these reference links, you will be automatically connected to that site. The web browsers have "Back" buttons which let you backtrack along your Web journey. The browsers also have "Bookmarks" which let you have the computer memorize the sites you find interesting.

The third way to get to a site is by its address. Each page of each site is given an address, much like each document saved by your word processor is given a unique filename and is stored in one of several directories on your computer. The address, which may look complicated, has many standard portions to it. For example, the home page for our firm is "http://www.slwk.com". Most addresses will start with "http://". This identifies what type of communication protocol the home page network uses. In fact, it is so pervasive, that often, when someone tells you a home page address, they will skip this portion and start with the next part. The "www." stands for world wide web. The "slwk.com" is our domain name, which uniquely identifies our firm from all other entities on the Internet. The ".com" portion tells you that we are a commercial entity, as opposed to educational (.edu) or governmental (.gov). By knowing our home page address, you can ask your web browser to "open address" and type in "http://www.slwk.com" to connect to our page.

What is really happening is that by typing in the address, your service provider, such as AOL, then looks up the name in a central registry of domain names. Then the network where the domain is physically located (which is Winternet for our home page) is accessed directly. The text and graphics of our home page are transferred from Winternet's computer to AOL's computer to your PC via the phone line. The information is passed in a series of small packets of data, which are reassembled when they get to your PC. When you jump to another site by clicking on one of links displayed on one of our pages, your access provider disconnects from our domain and then looks up the address for the link, then contacts that network.

Overview of Patent Protection for Software-Related Inventions

There is still a great deal of confusion in the software industry over the exact status of the patenting of computer software. Technically, it is not possible to patent a computer program in the sense of instructions on a disk or on a listing, in the same sense that one cannot patent the information in a book. That is why you may hear it said that "software per se is unpatentable." The operation of a computer when it exercises the instructions in software is, however, patentable. Under the patent law, software inventions are viewed either as a computer process, or as a programmed computer which has a unique set of functionality.

The vast majority of software inventions are in the realm of industrial technology, such as a computer-controlled carburation system or a flight-control system. In most of these inventions, software is a substitute for what used to be accomplished using electronic circuits. In these cases, the line between electronic and software implementation is fluid, and depends on factors such as cost and performance. Patenting of these inventions is typically approached in a traditional way. In the final analysis, any software invention is just a combination or series of electronic operations performed by a computer, and a special purpose hardware device can be devised to mimic the operation of any computer program. Therefore, a software invention is a hardware invention is a software invention.

Types of Patentable Inventions

Utility Patents are now available to cover virtually any form or type of software-related inventions. Among the protectible forms are:

• application programs (such as spreadsheet programs and databases[13])
• operating systems[14]
• web browsers
• user-interfaces[15]
• software for implementing business systems
• data structures[16]
• utility programs
  • data compression
  • virus detection
  • programming languages[17]
• software on a computer disk[18]
• software in a computer memory[19]
• software in digital form carried on a transmission media

Mathematical Algorithms

In addition, patents are available to protect mathematical algorithms or formulas that are "applied" to a problem having a connection with the physical world, such as the processing of data representative of real world objects. Determining when an algorithm is or is not properly "applied" so as to permit it to be part of a patented invention is often difficult. A couple of examples may help give a feel for when an algorithm is applied. A mathematical algorithm used in a data compression process, for example, is "applied" because data compression is a recognized statutory type of process. On the other hand, using a mathematical algorithm in accounting software will not be properly applied if it merely calculates a new balance or other number which does not control the flow of the software.

Design Patents

Design patents are also available for computer screen displays. A design patent covers the "ornamental" features of a screen display, provided those features are not primarily functional. A design patent provides protection which is similar in scope to copyright protection, but which carries a more potent remedy: treble damages. In addition, some limitations on coverage found in copyright law, such as merger, are not found in design patent law, affording an opportunity for a greater range of protection. Design patent and copyright protection are not mutually exclusive, so both are available simultaneously.

Methods of Doing Business

Methods of doing business are not patentable. However, machines and apparatus used in business are. For instance, a cash register is patentable, even though it is used in business. Paine Webber obtained and successfully enforced a patent on a system for moving funds into different accounts depending on certain predetermined algorithms. Software used to create and print coupons is another example of software that is of a patentable nature even though it is used as part of a method for doing business. Still another example might be a computer program and database which is designed to help match home buyers with home sellers.

Identifying Valuable Inventions

In general, the most valuable inventions are those that your competitors seek most aggressively to copy. Unfortunately, it is often hard to know this at the time the decision to file must be made. Inventions which may establish or modify a standard are also valuable, since even if narrow in scope, competitors will need them to maintain full compatibility with the standard. Inventions made in the course of dealings with another entity also can be quite valuable, particularly where the other party attempts to or does adopt the invention, as if it were the inventor when such is not the case. Having a patent in this situation can give a smaller developer leverage in their dealings with a much larger company that would otherwise not exist. "Broad" or "pioneering" inventions are usually more valuable than "narrow" or "incremental" inventions (however, very few inventions are truly pioneering). The breadth of coverage available to an invention is assessed by a review of the prior art. Inventions which cannot be protected as trade secrets are better candidates for patent protection than those that can. Inventions which satisfy a long-felt need or solve a difficult problem are usually good candidates for patent protection.

Identifying inventions in a software-related invention can be difficult at times. In many cases, there simply aren't any good inventions in a new product, even if it is a major new release. Sometimes a new software product is unique, but only in the sense that it is a novel aggregation of features and functions which do not interact with one another so as to produce any brand new functionality or capability. In other cases, there are many small advances throughout the product, none of which is critical to the product. In still other cases, the important inventions are not fully recognized even by the developers.

If uncertain about which aspects of a product are patentable, it is possible to file a patent application which describes the entire product in some level of detail, and claim everything that looks even remotely inventive. The Patent and Trademark Office will sort through the claims and help you determine the patentable content of the product. This approach, however, is very costly. It is much more cost effective to hone in on a specific invention that can be economically described and claimed.

Ownership of Patent Rights

The ownership of patent rights by inventors are determined by state law. Generally, in the absence of an agreement, an employee inventor will own the patent rights, even if the inventor makes the invention using an employer's facilities and on company time. The company does, however, receive "shop rights" in such inventions, which are a royalty free license to use the invention in the employer's products and operations. The exception to this rule is if an employee is hired expressly for the purpose of making a particular invention. It is not good enough that the employee is hired to do research and development, unless it is expressly contemplated the employee will make inventions for the employer.

Therefore, it is critical to have written patent assignment agreements with employees (and agents and outside developers). Many states restrict the scope of such assignments to exclude inventions made by an employee on his or her own time with their own facilities if the invention is not directly related to the employer's research and development efforts.

The federal patent statute (35 United States Code) provides for a peculiar result in the case of joint ownership of a patent: both owners can treat the patent as if it were the sole owner with no duty of accounting to the other owner. In other words, one owner can license the patent without the other owner's consent and furthermore not be obligated to share the royalties with the other owner.

Time Limits for Filing of Patent Applications

35 U.S.C. § 102(b) requires that a U.S. patent application must be filed within one year of any of the following three events:

1. The disclosure of the invention (by any person) in a printed publication

(probably includes public disclosures using overheads and slides,

"video" publications, trade literature);

2. The offering for sale (or sale) of the invention (by any person) - does

not include efforts to license patent rights to others; or

3. The commercial use of the invention (by any person) - called "public

use."

To obtain protection in foreign countries (except for a limited exception in Canada), an application must be filed in the U.S. before the invention is sold or disclosed to the public.

Some of the most important statutory bars are quite subtle. One that deserves attention is what is called the "continuation-in-part" or "CIP" bar date. A CIP application is one which typically describes an improvement to an invention disclosed in an earlier application. The invention of the earlier application becomes prior art to the improvement (1) year after any of the three events mentioned above (this is the CIP bar date). Therefore, where possible, it is highly desirable to file on an improvement before the CIP bar date. If the improvement is filed on before the CIP bar date, it will stand a much better chance of gaining patent protection.

Standards for Patentability

Generally, the provisions of 35 U.S.C. § 102 require an invention to be new as compared to prior technology. The provisions of 35 U.S.C. § 103 require an invention to be"unobvious", as compared to prior technology. Key provisions of § 102 and § 103 can be summarized as follows:

1. To obtain a patent, the applicant(s) must be the inventor(s) i.e., they

must have originated the invention, not copied (derived) it;

2. The invention must be novel -- that is, it must be different from prior

art inventions;

3. The invention can not be "obvious" to one of ordinary skill in the art to

which the invention pertains;

4. Prior art generally includes all technology publicly known prior to the

invention, and all technology known after the invention if it was

disclosed in a publication, offered for sale or publicly used for more

than a year before the filing date of the patent application on the

invention; and

5. "Non-obviousness" is subjective, but can be established by looking at

the following factors:

(a) the invention solves a long-felt need;

(b) the invention obtains unexpected results;

(c) the invention enjoys commercial success;

(d) the invention evokes surprise in the trade; and

(e) the prior art teaches away from the invention.

Remedies

The owner of a U.S. patent has the right to exclude others from making, using and selling the patented invention for seventeen years from the date the patent issues. 35 U.S.C. § 171. Note that this is the power to exclude others from making, using and selling, not the right to make, use and sell.

Broad or dominating patents usually cover a wide range of commercial embodiments or species of the dominating inventive concept. Many of these embodiments or species may themselves be patented as improvements to the dominating inventive concept. Many of these embodiments or species may themselves be patented as improvements to the dominating inventive concept.

Unlike copyrights, patent infringement cannot be avoided by independent development. Copying is not an element of a patent infringement claim. To establish infringement, the patentee need only show that the infringer is making, using or selling the patented invention, or that the infringer is inducing others to commit such acts, or contributing (as legally defined) to such infringing activities. Contributory infringement is established by showing that the infringer is selling materials or apparatus which have no substantial non-infringing use.

A patent comes with a very strong presumption of validity. A patent can be invalidated only by "clear and convincing evidence."

Injunctive Relief and Damages

Once found liable for infringement, or upon the grant of a preliminary injunction, an infringer can be enjoined from further infringing acts, e.g., making, using or selling the patented invention. In addition, the patentee is entitled to recover monetary damages from the infringer in the form of the patentee's lost profits, the infringer's profits, or in the alternative, an amount not less than a reasonable royalty. In cases of willful infringement, damages can be increased by a court to up to three times the actual award, and the infringer can be required to pay the patentee's attorneys fees. Willful infringement is established by showing that the infringer had knowledge of the patent and infringed without a reasonable basis to believe that the patent was invalid or not infringed.

Applying Patents to Internet Technology: a Case Study

Imagine you are approached by a new client recently formed by a group of computer programmers that had been layed off by the National Security Agency due to the end of the Cold War. They call themselves Music-Net, and they plan on starting a music publishing business on the Internet. The founders are all frustrated amateur musicians who were unable to make it as professional musicians. They are all convinced that had they been able to publish their music, they would have been "discovered" and become multi-millionaire musicians. They now believe it is too late to make it in music, but that there is money to be made on the Internet publishing music.

Music-Net plans to acquire a surplussed Cray supercomputer and use it to establish a Web site that they will use to custom-publish musical recordings. For a fee, Music-Net will take a recording from an aspiring musician, and make it available over the Net. Music-Net's home page will include a directory of all available musicians and their titles. A customer will order a recording by selecting it from a directory and supplying Music-Net with a credit card number and an authorization. Music-Net will then down-load the recording to the customer over the Internet, and the customer will save the recording to their hard drive. To get the data over the Net quickly, Music-Net has invented a super-compression algorithm that can reduce an hours worth of recorded music to 50 kilobytes of data and encrypt it. Music-Net will also provide a small computer program or applet which will run on a customer's computer to decompress, decrypt and play the recording to the computer's speaker system.

In addition, Music-Net plans on using the Cray supercomputer to automatically synthesize a music-video for each recording, using a photograph of the recording musician. The recording musician will be able to direct the synthesizing of the video by working interactively with the Cray supercomputer over the Internet. These music videos will also be downloaded with the accompanying music, and be playable by the applet along with the recording.

To advertise their services, Music-Net intends to monitor Internet data traffic on the Web (like they used to do at the NSA) and identifying potential customers by, for instance, looking at who subscribes to musical-oriented bulletin boards and Web sites. Music-Net intends to e-mail potential customers sales literature for their Web site. To do this, Music-Net has invented a Web-Snooper that can secretly monitor any Web site and capture the names and e-mail addresses of visitors.

Music-Net's home page system also is capable of presenting a customized home page to each visitor-customer to the site, based on information Music-Net has acquired about the visitor. This way, the visitor-customer is first presented with the sales literature and recordings they are most likely to want to buy, to save time for them and the Web site. Music-Net has developed a program which can predict with 95% accuracy which titles a visitor-customer will want to buy.

Not to be outclassed by whatever competition they might encounter, Music-Net plans to pay a Madison Avenue graphic artist and a user-interface specialist $200,000.00 to design the most artistically aesthetic and functional home page on the Internet. The new design will combine superior ease-of-use features with striking graphical images.

By the way, Music-Net has already had a public offering and raised $50 million. All of the founders are already millionaires on paper and they haven't even bought the Cray supercomputer yet.

Patent Advice for Music-Net

Music-Net is perfect example of a client that will benefit from aggressive patent protection for their Internet business. By the way, since this is a paper on patents, I will overlook copyrights, trademarks, trade secrets and contracts as modes of protecting Music-Net's business. I will also overlook some problems Music-Net might have with privacy and wiretapping laws, since after all, they never minded them before so why should they start now?

So what does a patent attorney tell Music-Net? Well, after you stop breathing heavy thinking about all the possibilities (this will give you an idea about how dry a patent attorney's life can be), you start with the basics. You ask them when they developed their ideas and if they have been used, published or offered for sale. Once you are convinced that they are not sitting on top of a statutory bar time bomb, you docket a deadline for filing U.S. applications and advise them not to disclose or sell a system prior to the filing date of their U.S. patent application(s) to preserve foreign filing rights.

Next, you dig into the big picture. You think, what would Music-Net really like to patent to protect its core business? They say the core of their business is the fee-for-service publishing of recordings. You think about this for a while, and then say it might be tough but you think you can see a way to take a good shot at it. You advise them to file a patent claiming an invention which comprises the following elements:

1. a database containing:
   recordings;
   data specifying an owner of each recording;
   data specifying the number of times each recording is sold to a
   customer over the Internet;
2. software for receiving orders for a recording at a home page and for
   electronically transferring the ordered recording over the Internet to a customer;
   and
3. software for reading the database and reporting to each owner the number
   of times their recording has been sold within a certain period of time.

You advise the client that the USPTO will likely find this claim meets the novelty requirement of 35 U.S.C. Section 102, assuming your client is indeed the first company to devise this invention, but that an examiner might find this particular invention obvious and do his or her best to refuse it patent coverage.

You tell them not be discouraged, however, since there seem to be some other good prospects for patent coverage in their business concept. One of the most promising is the idea of synthesizing music videos and distributing them with the recording. In this case, the elements of the invention might look like:

1. a database containing:
   recordings;
   a synthesized music video for each recording;
2. software for receiving orders for a recording at a home page and for
   electronically transferring the ordered recording and its music video over the
   Internet to a customer.

You could also add to this invention the step of transferring to the customer an applet that the customer uses to play the music video and recording on the customer's PC.

Music-Net should also be advised to patent their compression/encryption algorithm software, but not limit their coverage solely to music and video data compression.

An additional patent or patents could be obtained on Music-Net's system for synthesizing music videos.

Music-Net can also look at patenting its Web-Snooper.

In addition, Music-Net may want to patent its sales-prediction software, and the application of that software to control the presentation of materials to a visitor- customer of a home page on the Internet.

Furthermore, you advise Music-Net to consider patenting the new user-interface they are having developed. You advise them to patent the functionality of the interface with a utility patent, and the aesthetics/ornamentation with a series of design patents.

And we are not quite yet to the end. Music-Net is also advised to patent the data structure of its encrypted recording/video files, as stored on a storage media such as a floppy disk, a hard disk, a computer memory, or in electromagnetic form travelling over a copper cable or optical fiber from one computer to another. Music- Net should also protect its applet in computer-code form, as stored on a recording media or transported in digital electromagnetic form.

Of course, you also advise Music-Net that there are a variety of combinations of the above-noted concepts and inventions, and that they should consider seeking protection for as many different combinations as are commercially valuable.

Advising Music-Net on Infringement Issues

There are a few infringement issues that you should advise Music-Net on. First, you are aware that Unisys Corporation has a patent on data compression called the LZW data compression algorithm.[20] You think it is possible that Music-Net's compression algorithm might infringe this patent, and you advise them to take a look at it and discuss it with you.

You have also heard about a company called Interactive Gift Express, Inc., claims to have a patent on reproducing information in material objects in a point of sale location.[21]

In addition, you know that there was once issued a patent claiming to cover the placing of advertising inside of a computer program to be displayed to a user of the program. This patent[22], you advise, has been rejected by the USPTO in a reexamination proceeding, but might issue after amendment and argument by the applicant. You advise Music-Net to avoid putting advertising in their applet downloaded to customers.

Conclusion

The Internet will provide many interesting business opportunities. Being an inherently electronic marketplace, patent protection should be carefully considered, particularly in view of the recent liberalization of software patent practice.

FOOTNOTES

[1] 50 Pat. Trademark & Copyright J. (BNA) No. 1232 at 164-166 (guidelines); 50 Pat. Trademark & Copyright J. (BNA) No. 1247 at 659-672 (analysis of guidelines).

[2] Paine, Webber, Jackson & Curtis, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 564 F. Supp. 1358, 218 U.S.P.Q. 212 (D. Del. 1983).

[3] Markman v. Westview Instruments, Inc., No. 92-1049, U.S. App. LEXIS 7593 (Fed. Cir. Apr. 5, 1995).

[4] See North American Application Software Sales a Record $7.38 Billion in 1994, SPA News, May 1995, at 3.

[5] Greg Aharonian's article located at http://sunsite.unc.edu/patents/txt/102194.txt states that about 4400 software patents were filed in 1994. IBM is the number one recipient of software patents and image processing is the leading type of software application being patented.

[6] Lotus Dev. Corp v. Borland Int'l Inc., 49 F.3d 807 (1st Cir. 1995); Apple Computer, Inc. v. Microsoft Corp, No. 93-16883 (9th Cir. Sept. 19, 1994).

[7] Ironically, the Internet has long been the haven for the anti-patent contingent of the computer programmer subculture.

[8] U.S. Patent No. 5,105,184.

[9] U.S. Patent No. 4,528,643.

[10] U.S. Patent No. 4,558,302.

[11] U.S. News and World Report, Nov. 13, 1995, at 73.

[12] U.S. News and World Report, Nov. 13, 1995, at 73.

[13] U.S. Patent No. 4,648,036

[14] U.S. Patent No. 5,146,580

[15] U.S. Patent No. 4,656,603

[16] In re Lowry, 32 F.3d 1579, 32 U.S.P.Q.2d 1031 (Fed. Cir. 1994); In re Warmerdam, 33 F.3d 1354, 31 U.S.P.Q.2d 1754 (Fed. Cir. 1994).

[17] U.S. Patent No. 4,688,195

[18] In re Beauregard, C.A.F.C., No. 95-1054, May 12, 1995.

[19] In re Beauregard, C.A.F.C., No. 95-1054, May 12, 1995.

[20] U.S. Patent No. 4,558,302

[21] U.S. Patent No. 4,528,643

[22] U.S. Patent No. 5,105,184