MICHAEL LACHUCK POMS, SMITH, LANDE & ROSE MR. LACHUCK: Pick four, right. Good afternoon, Mr. Commissioner and distinguished panel. I am a partner in the intellectual property law firm of Poms, Smith, Lande and Rose. And I will be speaking today solely on my own behalf based on my own experience and those of some of my partners. I would like to depart at least a little bit from some of the comments that you've heard from so many other patent lawyers that have had an opportunity to speak at these hearings. Virtually, every one of those attorneys has said to you that they've been able to obtain patents for software_related inventions, and frankly, my experience has been no different. I would like to point out that what this means is that irrespective of what the Patent Office decides to do, clever patent drafters will always a way to disguise a mathematical algorithm or some other form of software_related invention either as a piece of hardware, or as some form of methodology having significant post solution activity necessary to get a patent. The problem is one that simply isn't going to go away, it can to a certain extent be curtailed. What I would like to do is make some suggestions on how the Patent Office might be able to change its practices to alleviate this problem. There are two issues I would like to address: One, is specifically how the Patent Office might change its practice, and the second is how the Patent Office might propose legislation to effect remedies available in patent litigation. Speaking to the first issue of patent practices: at the office, several people have come up here and suggested that applications might be laid open during the pendency of the application and before a patent issues. I would like to argue against this practice for three specific reasons: the first reason is that this practice would shift the fundamental contract between the patentee and the U.S. government concerning the grant of a patent in the first place. Currently, the application is obliged, or rather the patentee is obliged to provide a specification having an enabling disclosure, one that teaches the public or those reasonably skilled in the relevant arts how to make and use the invention. In exchange for this, he's awarded certain rights and remedies under the patent laws. Now, if the application is simply laid open, the same standard or obligation of teaching merely avails the application of a possibility of obtaining a patent at some later date based on the presence of prior art that they, themselves, may or may not be aware of. Secondly, I would like to most strenuously point out that if the practice of laying open an application for public comment were to follow current practices of re_examination procedure, it simply wouldn't work. The problem is that right now the public has only one bite at the apple. They can submit prior art of a certain form, prior patents and printed publications, and they are allowed to comment exactly once on the relevancy of this art to the application. Thereafter, the process again becomes an ex parte process where the applicant's advocate, some skilled patent attorney is able to argue with the examiner over whether or not that art is in fact relevant or does make the invention obvious. The ant_like persistence of patent attorneys is legendary, as even the well known jurist Learned Hand once noted. This process of allowing the ex parte communication between the patent applicant's advocate and the examiner, is a decidedly risky proposition. What I would like to propose instead is that the re_examination process be modified to allow representatives of the public or interested members of the public to participate in that further communication that takes place between the applicant's advocate and the Patent Office examiner, more or less in the manner that litigation motions currently proceed; that is, the public would be afforded an opportunity to submit prior art and comment on its appropriateness or applicability to the application. Thereafter, the applicant's advocate would be afforded an opportunity to comment and then the public or their representatives would be afforded an opportunity to respond to the applicant's comments. I am concerned that if this isn't done in some fashion or other, then the suggestions that have been made concerning the submission of prior art to the Patent Office, particularly in this area where there appears to be a dearth of prior art, isn't going to change very much. Under current circumstances, the district court judges typically afford great weight to the decisions of the Patent Office examiner. Unfortunately, the public representatives are never provided an opportunity to debate or address the subsequent arguments that are made by an applicant's representative. The result is that very few litigators suggest filing a re_examination application. The best prior art is lost, and the patent is simply strengthened. Turning to the subject of patent remedies. I would like to suggest a drastic reduction or elimination of injunctive relief in patent enforcement litigation. The threat or promise of injunctive relief drastically distorts the economic value of a patent and the attendant costs of litigation. It's been my personal experience, and the experience of every patent attorney I have ever talked to that the cost of litigation is directly related to the potential liability exposure of the defendant. Patent infringement litigation, because of the threat of injunctive relief typically becomes a venture company_type lawsuit. The client does insist on a most vigorous defense proportional to the risk that they face. If potential liability exposure for patent infringement litigation were reduced to a few thousand dollars, the cost of litigation would drop to some small fraction of that value. The basis for award of injunctive relief is based solely on tradition, dating back to old English law, which now, in the hands of a patent owner who frequently does not market any product, is ludicrous. The effect of patent infringement litigation with the threat of injunctive relief is to waste a tremendous amount of American wealth and resources. It is time to bring this practice to heel. (applause) Thank you for the opportunity to speak to you today, and I thank you also for your taking the time to personally come out here and hear from so many representatives of the industry. COMMISSIONER LEHMAN: Thank you very much. I should add that I've been waiting for somebody to make the point that you did. And I am somewhat surprised that it has not been made before, and that is that there is a deal in the patent system, and that is that one does not really give up their trade secrecy rights until they are certain that they've got the patent. And certainly to go to a prepublication system would create a hiatus in which that bargain in effect would be jeopardized. But I do find it interesting that thus far, you're the only person who's raised that. That by and large the wave of testimony has been, I gather, that it's worth taking that risk in order to improve the availability of the prior art to the patent examiner. Anyway, thank you very much. MR. LACHUCK: I would like to address that one comment. I suggest that if the statutes were amended to provide that any patent infringement litigation were automatically stayed pending re_examination, then the need to have post issuance examination or comment by the public, the need to have the application laid open would be alleviated. The current reasoning I think that exists for people wanting to have an application laid open during the pendency of the application is to avoid the situation where the trial court judge decides to continue with the litigation while the re_examination takes place. And as things currently stand, there's also the threat of preliminary injunctive relief, so if you get rid of that threat, it would probably be a more practical alternative to allow the same public comment through re_examination. Thank you for your time. COMMISSIONER LEHMAN: Thank you. Next, I'd like to call on Gregory Aharonian, from Source Translation and Optimization.