SAL CASSAMASSIMA EXXON PRODUCTION RESEARCH COMPANY MR. CASSAMASSIMA: Thank you, Commissioner LEHMAN, and thank you particularly for pronouncing my name correctly. I know it's a struggle to get that one right the first time. My name is Sal Cassamassima, and I'm the General Counsel of Exxon Production Research located in Houston, Texas. I'm here to present tes- timony on behalf of Exxon Production Research, which for the sake of brevity I'll refer to as EPR. I'm going to address the subject of patent protection for software_related inventions and $ particularly on the patentabil- ity of inventions containing mathematical algorithms. This is a very important subject to EPR, and we appreciate this opportunity to present our comments on the subject. We will also submit more detailed comments, written comments for the record by the March 15th deadline. Our comments will focus on the subject of inventions containing mathematical algorithms, and we will recommend that the Patent and Trademark Office clarify and liberalize its guidance on the subject to better align with the views of the Federal Circuit. Let me tell you first a little bit about EPR and why the subjects addressed here today are important to us. We are a wholly_owned affiliate of Exxon Corporation and we're engaged in basic and ap- plied research related to oil and gas exploration and production technology. Our company and many other companies in the oil and gas industry are among the most intensive users of advanced computer technolo- gies and applications. For example, in exploring for o(nd gas, there is an increasing need for highly accurate representations of subsurface formations, particularly in geologically_complex areas. Meeting that need in recent years has been an enormous challenge for industry, particularly with oil hovering around fifteen dollars a barrel. That challenge is being met by rapid advances in the application of leading edge computer technology and the processing of geophy- sical data which you probably know is obtained from seismic sur- veys. For example, so_called three_dimensional or 3_D seismic provides much more accurate depictions of complex geologic forma- tions than was ever possible with more conventional two_dimensional, 2_D seismic. Advanced computer applications are also being used on the production side of our business to predict oil and gas reservoir drainage and to model enhanced oil recovery techniques by computer simulations. In pushing the frontiers of this new technology, EPR is constant- ly challenged in several areas that are computer_related. F, is the hardware itself. Seismic surveying and the ensuing data processing require enormously powerful computers such as super- computers and massively parallel computers. To obtain these various depictions of 3_D seismic you really have to have an enormous amount of number_crunching capability. In fact, we think our industry is second only to the Defense Department in the use of MPPs and supercomputers. Secondly, the industry must develop the software to both process the data and convert it into readily_analyzable forms; and this is where we come in. Closely related to hardware and software development is the ongoing challenge to develop sophisticated mathematical algorithms which are the key to enhancing analysis of seismic or reservoir data. The algorithms we develop do many critical things in analyzing seismic and reservoir data. For example, the algorithms enable the computer to process data more efficiently. They compress data or rearrange data to make it more readily processible, and they en0 the processing of poorly_conditioned data by removing noise or other irrelevant signals. Development of these algorithms and their integration into the hardware and software usually involves very major investments in both time and money. The synergistic combination of more powerful computers and software enhanced by mathematical algorithms has resulted in a quantum leap in oil and gas exploration capabili- ties. Many companies are now reexploring mature producing areas such as the Gulf of Mexico because the new technology enables the discovery of reservoirs that were heretofore unknown because of their complex subsurface geology. The type of inventions we seek to protect generally relate to methods for analyzing seismic or reservoir data using mathemati- cal algorithms which yield a desired output, such as an accurate 3_D depiction of the subsurface. For example, these methods may accurately identify salt domes, highly faulted formations, and other complex subsurface anomalies which reveal oil and gas d4its. Patent applications claiming methods for analyzing seism- ic data using mathematical algorithms have always been among the most perplexing cases for the Patent and Trademark Office to re- view. In some cases, the Office in applying the so_called Free- dom Walter Abel test, two_part test, has held such claims to be patentable subject matter under Section 101. In other cases, very similar cases, the Patent and Trademark Office has found the test not to be satisfied. It was thought by many in the industry that some clear guidance would be forthcoming from the Patent Office when the Federal Cir- cuit issued its opinion in the Arrythmia Research v. Corazonix case which some other speakers mentioned today. However, we have been disappointed that the Patent and Trademark Office often does not appear to follow the reasoning of Arrythmia, thereby creating a great deal of uncertainty in this important area of the law, and I realize that consistency is the hobgoblin of little minds, but in the area of Section 1018e threshold of patentability, con- sistency is very important. COMMISSIONER LEHMAN: I think that consistency in the Patent Of- fice is an extremely important part of customer service, so I don't think that cliche is applicable to us at all, and I think this is a very good point that you're making. MR. CASSAMASSIMA: The types of inventions that are the subject of this controversy all have one thing in common. They deal with algorithms which yield a useful result. For example, in many of our inventions seismic signals are analyzed to accurately depict subsurface geology. In the arrythmia case, electrocardiograph signals were analyzed to detect the susceptibility to excessively rapid heartbeat, which is known as tachycardia, a very life_threatening illness. In other cases, we might see tech- niques for mathematically analyzing molecular structure to screen for chemotherapy agents. But let me give you a hypothetical ex- ample that may be more meaningful, given recent events. I'll describe this hypothetical situation: A method of analyzing seismic data to predict earthquakes, said method comprising combining se- ismic signals using Formula X, mapping said combined said com- bined seismic signals using Formula Y, comparing said map seismic signals using Formula Z with a database of historically_mapped signals to determine the probability of an earthquake. Now of course I have no idea what X, Y and Z formulas might con- stitute, but needless to say, that would be a rather dramatic in- vention. Question: Is the method I just described patentable subject matter? And I would say that under current Patent and Trademark Office policy, the answer is hard to concern. Should it be? In my opinion, absolutely yes. The method that I just described, claimed, is not an abstract idea of a law of nature. It is a pro- cess for analyzing real physical data to yield a highly_useful life_saving result, the prediction of earthquakes. The earthquake claim does not seek to protect a generic technique for analyzing data. It does not claim@urely mathematical method of identifying a data anomaly by comparing sample data to generic databases. What it seeks to protect is a process for determining the proba- bility of an earthquake by comparing in a quantifiable manner ac- tual seismic data with reference databases. By grounding the claim in seismic signal analysis the claim comes to life as a pa- tentable process, and it's protected by the Patent Act. It does not matter whether there is a discernable physical component to the claim itself. Inventions, such as the ones I have described, our type of inven- tions, the Arrythmia case or the hypothetical, all have the re- quisites of patentable subject matter. They are new and useful, and granting patent protection to them would foster innovation and technology development, the very purpose of the patent law. Absent patent protection, the time and the resources to develop such new and needed technology might not be forthcoming. We therefore recommend that the Patent and Trademark Office dispense with Dtwo_part Freeman_Walter_Abel test and issue new guidance that embraces a statutory basis for determining patent- able subject matter under Section 101. The guidance should be simple and as broad as the statute and judicial precedent permit. We recommend that the word "process" be given its literal meaning and let the guidance dispense with the notion that a method claim containing a mathematical algorithm cite some physical step. Only algorithms which solve abstract or generic math problems should be deemed nonstatutory. The guidance should also direct that the algorithm be viewed in the context of the specification as a whole, in the claims preamble. With that approach, method claims of the type contained in arrythmia and the ones I've described would be statutory subject matter. Finally, the guidance should make clear that in the absence of legislative limits by Congress, the Patent and Trademark Office will not impose nonstatutory or policy constraints on what processes are worthy of patent protectioHuch guidance would elim- inate the present uncertainty and would provide a boost to the type of technology that will come to dominate the Information Age in the years ahead. Thank you very much. COMMISSIONER LEHMAN: Thanks very much, Mr. Cassamassima, I real- ly appreciate all your very specific recommendations. We'll exam- ine those. Next I'd like to call Christopher Palermo, another Fish and Richardson attorney. Is he here? I guess not. In that case we'll move on to Neil Brown. Mr. Brown? We're ahead of schedule now. MR. BROWN: Sorry about that. I was expecting twenty minutes, but-- COMMISSIONER LEHMAN: I know; we're a little further ahead in the schedule than we thought, mainly because the preceding witness wasn't here.