1. Software: To Patent or Not? Jeffrey P. Kushan Powell, Goldstein, Frazer & Murphy, LLP

2. Options for Protecting Intellectual Property in Software Protect software technology through three forms of intellectual property Copyright for the source & object code Copyright for the source & object code Trade secrets for source code and data structures Trade secrets for source code and data structures Patents for functional aspects of software (i.E., Processes, methods, systems, distributable code, data structures) Patents for functional aspects of software (i.E., Processes, methods, systems, distributable code, data structures)  Business method patents!

3. Copyright Protection in Software Copyright attaches upon the act of “fixation” to the source code and the object code Protection against literal copying of object or source code Protection against literal copying of object or source code Difficult to use copyright to protect functionality of software Difficult to use copyright to protect functionality of software Protect original database collections, source and object code Protect original database collections, source and object code CHEAP!!! (registration $25) CHEAP!!! (registration $25)

4. Trade Secrets in Software? Publish or perish? [Trade secrets perish with publication!] Must take steps to keep secret Must take steps to keep secret Must have commercial value Must have commercial value Secret cannot be discernable from inspection of commercially distributed products Secret cannot be discernable from inspection of commercially distributed products No protection against reverse engineering No protection against reverse engineering

5. Trade Secrets in Software? You can enjoy trade secrets to a limited extent even while obtaining patent and copyright protection in computer software Registration of copyright does not require disclosure of complete source code Registration of copyright does not require disclosure of complete source code Patent protection does not necessarily mandate disclosure of source code, but does require disclosure of best mode of practicing invention known at time of filing application Patent protection does not necessarily mandate disclosure of source code, but does require disclosure of best mode of practicing invention known at time of filing application

6. Patent Protection for Software What is patentable? Any new, useful and non-obvious process, system or article of manufacture Any new, useful and non-obvious process, system or article of manufacture This means This means  Processes implemented entirely within software  Processes that have software-driven computers as one component of larger process  Computer systems “configured” to have a particular functionality via software  Computer readable media with ordered data (e.g., executable code, data structures implemented on a physical “memory”)

7. Patent Eligibility The “utility” requirement (35 USC 101) has a checkered past for software-related inventions Patents may not be granted on abstract ideas or laws of nature Unapplied mathematical algorithms are “laws of nature” or “abstract ideas” Unapplied mathematical algorithms are “laws of nature” or “abstract ideas” A practical application of a mathematical algorithm is a patentable process invention A practical application of a mathematical algorithm is a patentable process invention

8. How Does the PTO Draw the Line? Unsafe harbors Pure mathematical formula, or process of solving mathematical theorem Pure mathematical formula, or process of solving mathematical theorem “Functional” descriptive material per se (e.g., source code, data structure) “Functional” descriptive material per se (e.g., source code, data structure) “Non-functional” descriptive material on medium (e.g., music on a CD) “Non-functional” descriptive material on medium (e.g., music on a CD) Energy, magnetism per se Energy, magnetism per se Process that manipulates abstract ideas, concepts or pure numbers without any practical real world application Process that manipulates abstract ideas, concepts or pure numbers without any practical real world application

9. How Does the PTO Draw the Line? Safe harbors A unique programmed computer A unique programmed computer Computer-readable medium with ordered data or data structure Computer-readable medium with ordered data or data structure Process that manipulates physical objects (i.e., computer performs one step of a multi-step process) Process that manipulates physical objects (i.e., computer performs one step of a multi-step process) Process manipulates data representing physical objects or conditions to achieve a practical application Process manipulates data representing physical objects or conditions to achieve a practical application  Measure physical object  Process data  Display/analyze result

10. Recent Developments “Business method” patents Not so new concept Not so new concept State Street v. Signature Financial Group State Street v. Signature Financial Group  Data processing system for managing investment portfolios  Claim was actually drawn to an apparatus (computer system) configured to support the system AT&T v. Excel AT&T v. Excel  Method of generating message record with a unique interchange originator indicator in the record  No computer is in the claim as a requirement

11. So, What Do You Patent? Example: Adobe Premiere (video editing software) 1. A method for editing a video program which includes a sequence of clips and transitions between the clips, the method comprising the steps of: (a) displaying a time line; (b) generating a display representing the video program clips by digitizing and thereafter simultaneously displaying a frame from each of a plurality of the digitized clips on tracks along and in a direct time relationship to the time line the width of the displayed frames representing the time duration of the clip represented by that frame, together with transition icons, the transition icons representing the transitions between the plurality of the digitized clips; (c) editing the video program by modifying the display. 1. A method for editing a video program which includes a sequence of clips and transitions between the clips, the method comprising the steps of: (a) displaying a time line; (b) generating a display representing the video program clips by digitizing and thereafter simultaneously displaying a frame from each of a plurality of the digitized clips on tracks along and in a direct time relationship to the time line the width of the displayed frames representing the time duration of the clip represented by that frame, together with transition icons, the transition icons representing the transitions between the plurality of the digitized clips; (c) editing the video program by modifying the display.

12. Practical Considerations Is the invention new and nonobvious? Are you aware of similar technology that has been publicly disclosed? Are you aware of similar technology that has been publicly disclosed? How close to what you’ve developed? How close to what you’ve developed? Is the invention worth patenting? Is the software an “intact” software product or have you developed a technique or process that can be implemented more broadly and independent from your own implementation code? Is the software an “intact” software product or have you developed a technique or process that can be implemented more broadly and independent from your own implementation code?  To protect the code, rely on copyright  To protect the functionality, rely on patents

13. Practical Considerations What is the end goal of your efforts? Sales of compiled program code (e.g., packaged or non-packaged software) Sales of compiled program code (e.g., packaged or non-packaged software) Licensing use of novel, nonobvious technique or process Licensing use of novel, nonobvious technique or process Is the invention a broadly licensable process/system or is it something to be licensed to a single entity?

14. Practical Considerations To evaluate invention, try: Identifying steps of a software method Identifying steps of a software method Define data structure (unique or common/old) Define data structure (unique or common/old) System perspective (e.g., what are the necessary components and what are the functions performed by the components?) System perspective (e.g., what are the necessary components and what are the functions performed by the components?) Work with university patent counsel Work with university patent counsel

15. Practical Considerations -- COST Costs of pursuing patent protection in US range from $5,000 to $15,000 per application, and foreign protection can add $85,000! PCT is good way of buying time (up to 30 months) before having to file and pursue foreign patents Use the time to find someone to pay for filing in important foreign markets Use the time to find someone to pay for filing in important foreign markets

16. Conclusions Patents are not the only way to protect your innovations, and certainly are not the cheapest Consider your inventions broadly and how you would exploit the investment in getting patent protection Check your budget!!

17. Thank You! Jeffrey P. Kushan Powell, Goldstein, Frazer & Murphy Phone: 202-624-3976 Phone: 202-624-3976 Fax: 202-624-7222 Fax: 202-624-7222 Email: jkushan@pgfm.com Email: jkushan@pgfm.com