CARL SILVERMAN INTEL CORPORATION MR. SILVERMAN: I thank you. Good afternoon. My name is Carl Silverman, Chief Counsel, Intellectual Property for Intel Cor- poration. We understand that the Patent and Trademark Office is interested in obtaining public input on issues associated with the patenting of software_related inventions, and we're pleased that the Patent and Trademark Office invited us here today to briefly testify. Software technology has become an integral part of virtually all of U.S. industry, as innovators strive to develop new and im- proved products in today's competitive, worldwide marxlace. Now, this technology includes pure software, and software which is combined with hardware, so for example, Intel Corporation, like other successful high_technology companies, invests the efforts of its engineers and large sums of money, the shareholders' mo- ney, to develop software_related technology. In 1993 alone, In- tel Corporation invested nearly one billion dollars in research and development, including a substantial amount in software_related technology. We also, we, Intel Corporation, also invested nearly two billion dollars in capital to build fac- tories so that we can build these advanced products. These advanced products include products such as our Pentium pro- cessor. This is a microprocessor with more than three million transistors on a single chip. This microprocessor product in- cludes software technology in the form of microcode and other computer programs. Now, to protect and encourage this kind of vast U.S. investment, and I'm referring to both the technical as well as the financ|aspects, and, to promote the development of new and im- proved products, we at Intel believe that software_related tech- nology should continue to be afforded the opportunity to obtain patent protection. The patent system has consistently provided an incentive to ex- pend the kind of technical and financial efforts previously tes- tified to to develop new technology, including software_related technology. In the United States the Patent and Trademark Office carefully examines every patent application against prior art to insure that only the novel and nonobvious inventions obtain pa- tent protection. Software_related technology is no different. We support the current statutory law concerning patents as well as its interpretation by the courts as relating to software_related inventions. We are currently aware of no alter- native to the patenting of software_related inventions that will better_serve our industry than the current patent laws. Further, we believe it would be a mistake to treat the patenting of sare_related inventions differently than the patenting of oth- er utility inventions. In this regard, Patent and Trademark Of- fice and the courts should be left free to develop the extent of patent protection for software_related inventions and its enfor- ceability on a case_by_case basis until such time as it is ap- parent that the courts are not up to the task. This time is not at hand, rather, the courts for the most part are both interested and concerned about protecting innovative technologies such as software_related inventions. Now, this is not to say that the current system for patenting software_related inventions is not without opportunity for im- provement. For example: We understand that the Patent and Trade- mark Office is working to improve its library of software prior art so as to improve its ability to examine patent applications in this area. We support this effort. We urge the Patent and Trademark Office to increase its capability to examine software_related patent applications by taking whatesteps neces- sary to establish the best prior art software library and to in- crease and_or redeploy the number of patent examiners who are knowledgeable in this crucial area. On behalf of Intel Corporation we thank you for providing us with the opportunity to present our views on this subject, and we are delighted that the Patent and Trademark Office has encouraged this free flow of ideas so that we as a country can do the right thing here. Thank you. COMMISSIONER LEHMAN: Thank you very much, Mr. Silverman. What's your view on the idea of prepublication that has been men- tioned several times this morning here, that that would be one way of making certain that we wouldn't overlook some priority that we might already have missed. MR. SILVERMAN: I apologize, Mr. Commissioner, for not being here this morning; I know generally the subject of publication, and oftentimes patent applications end up being published anyway as they're filed in non_U.S. jurisdictions, and I think that is perhaps a vehicle whichd simplify some of the issues that are in- volved here. So I think we're open on that one. COMMISSIONER LEHMAN: So you don't find that inherently offensive at Intel. MR. SILVERMAN: No, I don't. COMMISSIONER LEHMAN: One other question, too, and that is, you know, I remember the last time that I was in San Jose actually was sixteen years ago, and we were at the other end of downtown here at the old Santa Clara County Courthouse, and we had the first set of hearings. At that time I was Counsel of the House Judiciary Committee, and we had our first set of hearings that led ultimately to the legislation that became the Semiconductor Chip Protection Act of 1984, and Intel was a primary component of that. You were having problems with unauthorized reproduction of your semiconductor chips way back then, and ultimately Congress responded by creating a new form of intellectual property protec- tion, and I'm wondering if you have any thoughts as to how that system is working and is the existing patent, copyrighd mass works protection regime adequate, or in your particular area do you feel a need for either a strengthening of the mass works legislation or some alternative to that? MR. SILVERMAN: The Mask Works Act, I think, was very necessary at the time in which it was created, and I think it's been suc- cessful with regard to those who would copy other person's or company's products. I think it's been effective there. I think these days, however, it forms a piece of the overall intellectual property protection available in this country. I think it made a lot of sense to do that then. I don't think it makes any sense to do a similar type of protection mechanism for software_related inventions. COMMISSIONER LEHMAN: Basically you feel that you have an exist- ing intellectual property regime with these three forms of pro- tections that meets your needs, and it's really a question of tightening up on it, and I know you have strong international concerns, but it's really a question of enforcement and tighten- ing uhere's no really fundamental problem with it. MR. SILVERMAN: That's correct. COMMISSIONER LEHMAN: Okay. Thank you very much. Next I'd like to call Kaye Caldwell, President of the Software Entrepreneurs Forum. Maybe you can tell us a little bit about what your forum is, too. It seems to me you were at the Bree conferences before, weren't you?