ORACLE CORPORATION - PATENT POLICY
Oracle Corporation opposes the patentability of software. The Company
believes that existing copyright law and available trade secret
protections, as opposed to patent law, are better suited to protecting
computer software developments.
Patent law provides to inventors an exclusive right to new technology
in return for publication of the technology. This is not appropriate
for industries such as software development in which innovations occur
rapidly, can be made without a substantial capital investment, and
tend to be creative combinations of previously-known techniques.
Even if patent law were appropriate for protection of software, due to
the large volume of recently-granted software patents and the rising
number of new applications, the current patent process would continue
to be troublesome for the software industry. Software patent
examinations are hindered by the limited capability of searching prior
art, by the turnover rate among examiners in the Patent and Trademark
Office, and by the confusion surrounding novelty and innovation in the
software arena. The problem is exacerbated by varying international
patent laws, which both raise the cost and confuse the issue of patent
protection.
Unfortunately, as a defensive strategy, Oracle has been forced to
protect itself by selectively applying for patents which will present
the best opportunities for cross-licensing between Oracle and other
companies who may allege patent infringement.
COMPUTER SOFTWARE POLICY ISSUES
The policy rationale for patent protection in many industries is
understandable. In exchange for making an invention available to the
public, inventors are rewarded with a seventeen-year monopoly giving
them exclusive right to the new technology. In such cases, this
opportunity to monopolize the commercial application of the invention
is justified as an appropriate reward given the capital resources
dedicated by the inventor to the invention, including time and money
spent in innovation, production, distribution, etc.
This policy, however, does not fit well with the software industry.
Unlike many manufacturing-intensive industries, the development of
software requires a minimum of capital investment. Producing and
distributing a product is simpler, faster, and less expensive in the
software industry than in manufacturing sectors. New developments
influential to the software industry frequently emanate from
individuals and small companies that lack substantial resources.
Software varies from manufacturing in another key aspect. The
engineering and mechanical inventions for which patent protection was
devised are often characterized by large "building block" inventions
that can revolutionize a given mechanical process. Software,
especially a complex program, seldom includes substantial leaps in
technology, but rather consists of adept combinations of many ideas.
Whether a software program is a good one does not generally depend as
much on the newness of a specific technique, but instead depends on
the unique combination of known algorithms and methods. Patents
should not protect such methods of innovation.
The U.S. software industry has evolved to a multi-billion dollar
industry that leads the world in productivity, and accounts for
substantial portion of U.S. GNP. The software industry has advanced
the efficiency of other industries through the proliferation of
computing and computer-controlled processes. All of these gains have
come prior to the application of the patent process to software, and
consequently without patent protection for software. There is no
justification for a policy that would not only drain capital resources
(which are better spent on software development) into patent
applications and other legal fees, and also actually serve to reduce
innovation by limiting the availability of previously-developed
techniques.
In sixteen years, Oracle Corporation has grown from a start-up company
with a handful of employees to the world's third-largest independent
software producer employing 8,000 people. Oracle filed its first
patent application in November 1991, not because it felt that its
software was suddenly worthy of patent protection; it filed that
application because of concerns that other inventors, afforded patent
protection by a flawed patent system, might find themselves in a
position to seriously weaken the Company's competitive edge by
alleging patent infringement. Even if Oracle had developed a certain
invention first and could produce the appropriate prior art to prove
its case, thousands of dollars in attorneys fees and other expenses
would be spent in defense of its rightfully-owned technology. Oracle
consequently believes that it must have a patent portfolio with which
to respond to potential aggressors, so as to settle with them by
cross-licensing to avoid litigation. Oracle is forced to channel a
significant portion of its financial resources into patent protection
of its assets, rather than using those resources in further innovating
and expanding its computer software products.
Copyright protection for computer software is sufficient to preserve
the rights of software developers, who rely on the unique combination
of algorithms and techniques to produce successful software programs.
Copyright law, including relief from those who copy or distribute
copyrighted works without permission, in combination with careful
handling taken to preserve trade secrets, has afforded adequate
protection to software developers against the losses they may
encounter from the wrongful use of their software. Compared to
adequate copyright and trade secret protections, patent protection is
excessively broad and enormously expensive.
CHANGING THE PATENT SYSTEM
Oracle has recommended that patent protection not be provided for
computer software or computer software algorithms, for the reasons
described above.
If software continues to be protected by patent law, however, we
recommend the changes described in the following paragraphs. These
recommendations in no way endorse the use of patents for protecting
software, but rather serve to assuage the existing problems if patents
must ultimately affect software development.
Patent law should be consistent throughout the world and, if it is to
be applicable to software, should extend for much shorter periods of
protection than exist now, unified prior art searching capabilities,
equal standards of novelty, the elimination of patent rules that allow
"patent flooding," and identical standards for prior use restrictions
(bar dates).
The evolution of software moves very quickly. The term of software
protection should be cut back accordingly, from the current 17 years
from grant date to three years from application date (the application
period must be drastically reduced). A balance of fifty years
protection for direct copying of code would continue to be provided by
copyright law.
If the patent system is to remain an entrenched part of the software
industry, then the following changes need to be made:
- The prior art capabilities of PTO records must be vastly improved to
confirm effectively the novelty and non-obviousness of software
patent that is the subject of applications. New classifications,
as well as an effort to record the current state of prior art
would be necessary.
- Because of the unusual speed with which software innovations are
incorporated into products, the PTO's patent review process must
be made much more efficient so that it takes no more than six
months from application to registration. In the software
industry, if a patent application takes two years to process, the
patented "invention" is often either widely used or obsolete by
the time the registration is issued.
- Examiners skilled in computer science and software programming must
be trained on the nature of software inventions, and the state of
existing art. Qualified examiners must be hired and retained by
the PTO at much higher rates than they are today. Compensation
rates equal to those provided by industry are essential to
recruit qualified personnel.
- The PTO, in conjunction with industry, must establish additional
committees to clearly delineate the standards of novelty and
non-obviousness that will be required for software inventions to
receive patents.