Archive for February, 1994

Intellectual Property, Part 1

Tuesday, February 15th, 1994

(This column first appeared in the February 15, 1994 issue of PC Graphics Report)

Lately it seems that I’ve been seeing and hearing more and more threats to the stability of the PC market, all as a result of something called Intellectual Property.

Intellectual property (IP) refers to a wide range of items, including copyrights, trademarks, patents, and trade secrets. Most of the news breaking legal actions of the PC industry in the last decade have been based on intellectual property issues, such as Intel’s actions against AMD and Cyrix for alleged misuse of technology, patent infringement, etc.; Lotus suing Borland and Apple suing Microsoft and Hewlett-Packard for look and feel; the more recent Compton announcement of a universal patent covering accessing data on a CD-ROM; Dell threatening action against companies using VL-Bus designs because of patent infringement; and the list goes on…

So far, the PC graphics industry has been very lucky. Only a few IP disputes have arisen in our industry in the last few years, and fortunately none of them very crippling. But, this should also be seen as a sign of trouble ahead. With the rest of American society being so ridiculously litigious, can the PC graphics industry be far behind?

I don’t think so. I think that our industry has avoided litigious behavior because it knows how unreasonable such behavior can be. Anyone remember the CAD Track patent on XOR cursors? This company got a patent on something everyone knew how to use and do, but that no one actually publicly documented to create "prior art" (more on this in the next column). The result is that virtually every graphics hardware company has had to pay a sizable fee to license this patent to avoid being taken to court for patent infringement.

Unfortunately, the lack of IP disputes in our industry has created something of a lackadaisical attitude towards the whole issue of intellectual property. Witness, for example, Diamond’s Viper graphics board family, and Tseng’s VIPER technology – both share the same name and both are PC graphics products, key components for a legitimate trademark dispute. And, what about the handful of competing graphics boards that all have "Ultra" as part of their name? And, doesn’t someone out there have a patent on high-speed, interleaved DRAM access for graphics boards?

While I’m thrilled that the PC graphics industry is currently not even remotely as litigious as the rest of our society, I can’t help feeling a little nervous that something will change our state of near-serenity sometime real soon. Things like the Compton patent, and Microsoft’s patent acquisitions are just some of the warning flags I see.

Ignorance is NOT Bliss
After discussing the whole topic of IP with a number of people in our industry, it appears that at least one contributing factor to our carefree nature regarding IP is the result of plain old ignorance. However, ignorance of IP matters won’t help anyone avoid IP disputes. It should be noted that lowering the level of IP ignorance in our industry is also fraught with peril. While IP education may raise awareness about how to protect one’s own interests, it also provides the tools for companies to go on the offensive once they realize the value of their own IP holdings. Realizing that I may be opening a major can of worms, and even creating a self-fulfilling prophecy, I nevertheless think it’s important that everyone understand the basics of intellectual property, benefits and pitfalls alike. Therefore, in my next column (to appear in a week or two) I’ll tell you more than you ever thought you’d want to know about copyrights, trademarks, and patents.

In closing, let me present a scenario to further drive home the importance of understanding IP issues, and whet your appetite for my next column.

Scenario 1:
Premise:

Company A invents a new technology/process that it uses in its new FrabbleStam(tm) product, but keeps the technology under tight wrap, not telling anyone how it works and also not patenting it (after all, they say, who needs patents?).

Variants:

Company B sees the FrabbleStam product, figures out what Company A’s new technology is, maybe tweaks it a little here and there, and applies for and is subsequently granted a patent on the technology. The patent grant is given because no prior art was ever published or patented by Company A.

Or:

Company B develops a product similar to the FrabbleStam totally independently of Company A or the actual FrabbleStam product, also inventing a technology similar to Company A’s technology, but after Company A has done so. Company B applies for and is subsequently granted a patent on the technology because of a lack of prior art.

Climax:

Company B then approaches Company A accusing them of patent infringement, demanding either:

Variants:

Company A immediately cease shipping its FrabbleStam product and any products using Company B’s patent, and pay Company B some sum of money to pay for damages Company B has incurred from Company A’s pre-existing sales of FrabbleStam.

Or:

Company A may continue to sell its FrabbleStam product providing it pays Company B a royalty on each sale, as well as some sum of money to pay for damages Company B has incurred from Company A’s pre-existing sales of FrabbleStam.

Result:

Variants:

Company A may attempt to prove that Company B’s patent is invalid, which would cost at least $100,000 in legal fees, and take years.

Or:

Company A may try to get Company B’s patent reexamined by the U.S. Patent and Trademark Office (PTO). To use this approach Company A must procure sizeable amounts of relevant data to back up the request. This may cost less than invalidating the patent, but is also being less likely to produce results favorable to Company A since no published prior art exists.

Or:

Company A may just throw in the towel and agree to Company B’s demands, since it can’t afford to fight the patent.

So, which company would you rather own or be part of?

Until next week (or the week after that)…