RYAL POPPA STORAGE TEK MR. POPPA: Good morning, and thank you very much. I'm going to be answering principally the Question 4 on whether the cir- cumstance or the framework of the current patent law preserves c|tition. Quick background on Storage Tek, we are a twenty_five_year_old company, start_up, much like you see here in the Valley. We do about one and a half billion, have ten thousand employees. We belong to many organizations, the CCIA, Computer and Communica- tions Industry Association; ESIS and ASIS, the European and the American Committees on Interoperable Systems; AEA, American Elec- tronics Association; and the IEEE, the Institute of Electronic and Electrical Engineers. All of these are very pro_competitive in their attitudes, and that's the principal reason we belong to them. For the record, we have over three hundred programmers cranking out programs all the time, we have lots of patents and we have the same risk everybody else does. In the industry though we do build principally data storage devices that are attached to all the major mainframe manufacturers of the world, eighteen at this time, and many networks. We do support patents in every sense, as applied to the area of software, with one excon. We believe we have to have continued decompilation rights to maintain in- teroperability when needed. Modern APIs or mandatory APIs would do the job __ application program interface __ but frankly most companies do not want to do this, but that would be a solution in addition to decompilation. In supporting the thesis of "pro competition" I want to give three illustrations. One is old Ma Bell; we all know what it was like in the old days, very bureaucratic, very successful, it was the stock of widows and orphans, but it was a stifling, stultifying, noncompetitive environment. The new Bell of course is growing, marvelously. It is competitive. The competitive juices are flowing. And think of all the new services in the last twenty years that we have be- come accustomed to. Auto_answer, FAX, networks, fiber_optics, cellular, ISDN, et cetera, et cetera. New companies; MCI, the WilTel's, the Sprints, et cetera, and new related industries de- fined by companies such as Novell with software, and NSC for hipeed data transmission, McCaw for cellular, Hayes for modems and the list goes on and on and on as you well know. But this flowed out of a pro_competitive stance, a break_up of a company, and it led ultimately to [DarvdaNet], InterNet, and the informa- tion highway. That was the genesis of that kind of program. To- day we've globalized that communications capability all over the world and we continue to do so by freeing our telecommmunications capability. A second illustration is, in my principal industry, computers, leader of the industry, IBM, fell upon hard times. We all are aware of that. They are correcting that problem and will clearly return to health. But they fell into a pattern of being in the sixties and seventies highly competitive, and then they went into a protect mode, where they were trying to hold onto their base, hold onto their customers, and as a consequence, they fell behind, they became anticompetitive, and as a consequence, they began to lose the competitive juice, and even today of the com- ments made by their own officers saying that we have lost the will to compete. They're getting it back, they will return, but it was because they lost their desire to win. Part of that was the intense, massive fight over copyrights and patents, protect- ing in the court, fighting in the courts rather than fighting in the customer arena to save the customers and keeping them happy. No new ideas were allowed in the seventies and eighties. Where did the PC come from? or the mini? or the workstation? Not out of the big companies. They came out of the start_ups, where they could get the proper patent and copyright protection. But often- times decompilation is part of that because you have to maintain interoperability __ very fundamental issue. I sincerely hope that Lou Gershner understands that there's a smothering effect of too extensive use of patents and copyrights. It destroys the design capability of the company because they don't look to get their products to market quickly, they design poatents and protection, and therefore it doesn't really work to their great benefit. In the last six years, we along with many of our colleagues, have opposed the forces in Europe that have been seeking to use copyright and patent protection to limit com- petition, and as you well know, the EC finally came down on the point that decompilation is legal, desirable, when necessary for interoperability, and that's the only thing we look for __ no piracy, no cloning, no copying, no replacement of the program, but interoperability. That must be preserved. The last example is the information highway. This is not an economic debate in the way it was between Bell and IBM, but rath- er it is a competition of ideas, of interchange, of the exchange of relationships over the Internet, as you __ if you follow it and see what goes on, it is used in many, many ways. I would add a challenge to you, because of that Internet. Looking for data the way you are, and in your opening statement you said you're actively looking foras from our society, put out on the Internet a question. Should decompilation be allowed for the pur- pose of interoperability, but clearly not for piracy, cloning or replacement of the basic software? I think you'll get a very strong eighty_to_ninety_percent positive response that it should be. The reasons are you have organizations like the IEEE with two hundred and forty thousand members who have voted and publicly stated they support decompilation when required. The same with ASIS, the same with CCIA. In the case of CCIA we have sixty_seven companies __ I happen to be Chairman of that __ most of the RBOCS, all but one, AT&T, Univac, Amdahl, Storage Tek, and we have approximately a million employees represented, and they would vote for decompilation and maintaining it as a, a necessary option. Remember the alternative is a mandatory API. That could be something that could be legislated, but if not __ COMMISSIONER LEHMAN: Could you explain that? MR. POPPA: Applications Program Interface? COMMONER LEHMAN: Right. Well, API, but what would be a mandatory API? MR. POPPA: Well, literally in law saying that a second vendor or a third vendor would have rights of access to the base code so that they could understand it, so that they could build their code to interact with it and interoperate with it. Today most companies are locking that up on an object_code_only basis, and not allowing us to see it. COMMISSIONER LEHMAN: To some degree this is an antitrust issue, and my colleague, Ann Binghamen, who is the Assistant Attorney General for Antitrust over in the Justice Department has indicat- ed that she's going to put together a task force to start working on these problems, and it may well be that this sort of mandatory API idea should be explored in that context. In a sense that's more of a, I think, an antitrust kind of a solution to this prob- lem as opposed to an intellectual property solution. MR. POPPA: We think that's a good alternative. We would also hope that within the structure of the PT could get a clear dis- tinction, as they have done in the EC, but I don't think they did it as clearly as they should. They left it a little unclear, such that some people are going to be able to say, Well, Gee, for interoperability I can really replace the program. We are not in any way supporting that position; only that we should be able to access the program so that we can look at it and make sure that we can make our programs talk to each other. Nothing beyond that. My last point, and it's really a picture worth a thousand words: a terminal device we're all well_familiar with. It is a very standard device, but it also comes with an information network, with a very standard interface. It's a telephone. But when you take patents and copyrights and you tighten them down such that you could not in any way see the inside of the machine, what we do is we cover up the access port, we take the network, we cut off this end so you can't see the interface, and we say, Now, Mr. Engineer, make them interact. that doesn't make any sense, be- cause it isn't just a telephone, it's a computer with three mil- lion instructions in it, and this network has on the line hun- dreds of terminals with other millions of instructions, and therefore decompilation and interactivity must be maintained. Please. Thank you very much. COMMISSIONER LEHMAN: Thank you very much. Do any of my col- leagues have anything they want to add? Thank you very much. Thanks for coming over. MR. POPPA: You bet. COMMISSIONER LEHMAN: Next I'd like to call William Ryan who is representing the Intellectual Property Owners Incorporated, but is directly with AT&T.