In September 1990, users of the popular XyWrite word processing program got a disturbing letter in the mail from XyQuest, Inc., the program's publisher:
In June of 1987, we introduced an automatic correction and abbreviation expansion feature in XyWrite III Plus. Unbeknownst to us, a patent application for a related capability had been filed in 1984 and was subsequently granted in 1988. The company holding the patent contacted us in late 1989 and apprised us of the existence of their patent.
We have decided to modify XyWrite III Plus so that it cannot be construed as infringing. The newest version of XyWrite III Plus (3.56) incorporates two significant changes that address this issue: You will no longer be able to automatically correct common spelling errors by pressing the space bar after the misspelled word. In addition, to expand abbreviations stored in your personal dictionary, you will have to press control-R or another designated hot key.
XyQuest had been bitten by a software patent--one of the more than two thousand patents on computer algorithms and software techniques that have been granted by the U.S. Patent and Trademark Office since the mid-1980s. The owner of the patent, Productivity Software, had given XyQuest a choice: license the patent or take a popular feature out of XyWrite, XyQuest's flagship product. If XyQuest refused, a costly patent-infringement lawsuit was sure to follow.
Some choice.
XyQuest tried to license the patent, says Jim Adelson, vice president for marketing, but Productivity Software kept changing its terms. First Productivity said that XyQuest could keep the feature in some versions of XyWrite, but not in others. Then the company said that XyQuest could use one part of the ``invention,'' but not other parts. And Productivity Software kept increasing the amount of money it wanted. XyQuest finally gave up and took the feature out.
XyQuest was lucky it had that option. Other firms--including some of the nation's largest and most profitable software publishers--have been served with notice of patents that strike to the heart of their corporate vitality. In one of the most publicized cases, a company called Refac International--whose sole business is acquiring and litigating patents--sued Lotus, Microsoft, Ashton-Tate, and three other spreadsheet publishers, claiming they had all infringed on patent number 4,398,249, which spells out the order in which to recalculate the values in a complicated model when one parameter in the model changes. (Refac has since dropped its claims against all the companies except Lotus, but only because company lawyers anticipated a better chance of success if they faced just one opponent.)
Patent 4,398,249 does not have anything to do with spreadsheets in particular; the technique also appears in some graphics drawing and artificial intelligence programs. And the idea that values in a spreadsheet should be recalculated in the order specified by the patent is so obvious that it has probably occurred to nearly everyone who has written a spreadsheet program. But the Patent Office's standard for obviousness is extremely low; patents have been granted for ideas so elementary that they could have been answers to problems in a first-year programming course.
Practically once a month, the nation's computer networks are abuzz with news of another patent issued on a fundamental concept that is widely used. Although the Patent Office isn't supposed to grant patents on ideas, that's essentially what it's doing with software patents, carving up the intellectual domain of computer science and handing little pieces to virtually any company that files an application. And the practice is devastating America's software industry.
If Congress does not act quickly to redefine the applicability of patent law to computer programs, the legal minefield confronting the introduction of new computer programs will be so intimidating--and potentially so costly--that small companies will effectively be barred from the marketplace, while large, established firms will become embroiled in litigation that will have a stultifying effect on the entire industry.