A Y2K Patent Fortune Pending?

     By Rajiv Chandrasekaran, The Washington Post
LAGUNA BEACH, CALIFORNIA, U.S.A.,

Bruce Dickens says the idea popped into his head one February morning in 1995 while driving to work in his pickup truck, a few days after his boss asked him to ferret out Y2K "bugs" from a 20,000-line computer program.

Instead of painstakingly rewriting the program, he would simply trick the computer into thinking the century rollover was decades away. "The light just went on," recalled the 49-year-old programmer.

Scores of computer engineers have, on their own, conceived of the same technique, making it by far the most popular approach to fixing the bug that once threatened to freeze computers worldwide at the stroke of midnight on New Year's Eve. But Dickens and his employer took their method a step beyond everyone else: They applied for and received a patent.

Now, just as corporate America confidently plans to celebrate the new year, having largely vanquished the date glitch, Dickens has handed businesses a new kind of Y2K problem. In a legal climate that has heightened patent protections for software and Internet technology, he has served notice to Fortune 500 firms that they must fork over millions of dollars in licensing fees, regardless of whether they actually found out about the shortcut from him.

Technology and legal specialists predict that Dickens's attempt to enforce his patent could deal a financial blow to some firms and spawn a wave of lawsuits if companies refuse to pay. If every Fortune 500 corporation opted to shell out the fee, he would wind up with between $165 million and $16.5 billion depending on when the companies pay for just the first year of the patent's 17-year life.

"Either companies are going to have to pay him large amounts of money or they're going to have to defend themselves in court. Either way, it will be a headache and it won't be cheap," said Kazim Isfahani, an analyst at the Giga Information Group, a consulting firm in Cambridge, Mass.

Businesses argue that "windowing" the technique outlined in Patent 5,806,063 is so obvious that it doesn't deserve to be patented. "It sounds like he is claiming that he invented the process of putting plywood on a window when a hurricane is about to come and he wants to be paid because you're doing the same thing or something similar," said Marc Pearl, a vice president at the Information Technology Association of America.

An invention can be patented if it is "novel, useful and not of an obvious nature," but for years, courts had ruled that software code didn't qualify because it is composed of text and strings of mathematical calculations, which have long been regarded as public property. Software developers, however, could and did copyright their work, which prevents competitors from duplicating their code. But a copyright, unlike a patent, does not prevent a rival from creating a highly similar product.

Recently, though, a series of judicial rulings has loosened patent restrictions on software-based "business methods," in particular a 1998 federal appeals court decision upholding State Street Bank & Trust Co.'s patent on software that calculated mutual-fund returns.

The rulings threw open the gates to applications that have sought to patent not just Y2K repair techniques but also basic features on Web sites such as "one-click" shopping or ways of displaying online advertisements. Submissions for software patents have more than doubled to 2,600 in the past fiscal year, and the number of patents granted has mushroomed from 108 in 1996 to 500 in the 1999 fiscal year, according to the Patent and Trademark Office.

Several newly issued patents have already spurred infringement lawsuits. Internet auctioneer Priceline.com, for example, contends that Microsoft Corp. has copied its "reverse auction" feature, which allows customers to specify the price they are willing to pay for hotel rooms; bookseller Amazon.com alleges that Barnes & Noble's online affiliate is violating a patent it has for completing purchases with one mouse click. A federal judge in Seattle last week sided with Amazon in a preliminary decision, ordering Barnesandnoble.com to remove a "one button" shopping feature from its site.

Some legal and technology specialists argue that such patents undermine the competitive nature of the Internet by preventing rivals from providing similar services developed on their own.

"People can now get patents for blindingly obvious things just because they're being done with software or on the Internet," said American University law professor James Boyle, who predicts that the trend "will have a chilling effect on electronic commerce."

A Revelation

Back in 1995, when he had his epiphany, Dickens didn't even think about a patent. His first priority was to finish repairing the program at hand, a complex piece of software that monitored the inventory of aircraft parts at a McDonnell Douglas Corp. facility in Southern California.

"The program had an awful lot of dates," the shy programmer recalled. "It kept track of when a part was checked out, when it was checked back in, when it needed to be calibrated."

The program, written in the COBOL language, only used two digits to represent the year, assuming the first two digits would be 1 and 9. Come January, if the program had not been repaired, it would assume that the year "00" was 1900, not 2000, potentially causing it to shut down or stop working properly.

Back in 1995, the standard procedure for eliminating Y2K glitches at McDonnell Douglas called for arduously rewriting programs to represent all dates with four digits "1999" instead of "99" a chore that would have taken him weeks to finish.

Desperately searching for a shortcut, Dickens says he had his revelation during an hour-long commute in suburban Los Angeles: Simply make the computer understand whether a two-digit year, such as "01," should be preceded by a "19" or a "20."

The programmer would choose which years are in the 20th century and which are in the 21st by establishing a "window." A 30-year window, for instance, would have the program interpret the years "00" through "29" as 2000 to 2029, while years "30" through "99" still would have a 19 in front.

The approach isn't a panacea. Windowing still requires date-related calculations in programs to be modified, and if the software is still running 30 years from now, it will have to be repaired once again. But the technique is "one of the fastest and cheapest way to fix the Y2K problem," Isfahani said.

Dickens's technique never was widely used by McDonnell Douglas, which opted instead to repair most programs by expanding the year to four digits. But a report he wrote on the method eventually made it way to the company's legal office, which decided to apply for a patent in October 1996.

It was granted in September 1998. By then, though, McDonnell Douglas had been acquired by Boeing Co., which wasn't interested in enforcing the patent. This April, Boeing agreed to give Dickens sole claim in exchange for $10,000.

"They told me it wasn't something they cared about," Dickens recounted. "I was ecstatic."

A Boeing spokesman would not comment on the company's sale of the potentially lucrative patent to Dickens, saying only that "it was based on a business decision."

Billing the Fortune 500

With the help of his sister, Dickens sent out letters to every Fortune 500 company this summer requesting that they pay him royalties. He got half a dozen responses. None contained checks.

So this fall, he formed a company called Dickens2000 and contacted William Cray, the former chief patent counsel at Rockwell Semiconductor Systems Inc. who is now in private practice in the tony seaside town of Laguna Beach. Cray quickly fired off another set of letters to the Fortune 500 and 200 other large technology firms. This time, the companies were effectively given a bill.

Businesses that sign licensing agreements with Dickens before Jan. 1 have to make first-year payments of $25,000 for every $1 billion in annual revenue. Starting next month, the rate jumps to $2.5 million per billion. Dickens wants firms to pay royalties albeit at a diminishing rate for as long as programs repaired with windowing are still in use, or until the patent expires in 2015.

And if the businesses refuse to pay? Cray would only say that he and Dickens would "explore other avenues to enforce the patent."

"It appears that he wants people to say, 'It's cheaper to pay me off than litigate,' " said Jonathan Band, a patent specialist in the Washington law office of Morrison & Foerster.

Still, officials at several large firms who refused to comment publicly about the patent suggested privately that they would force Dickens to sue. To prevail in court, companies would have to prove that the windowing idea existed in the public domain before Dickens claimed he invented it. Lawyers call such evidence "prior art."

Many programmers argue that windowing was used as early as the late 1960s, when some computer systems only used one digit to represent the year and needed a way to operate in the 1970s. "This is so blatantly obvious that it boggles the mind that this is even an issue," said Peter de Jager, a Y2K consultant in Toronto. "We've all used this for years well before he says he invented it."

Incensed at Dickens's efforts to collect royalties, de Jager has set up a "prior art gallery" on his Web site that lists dozens of references to windowing in trade journals and computing standards manuals prior to 1995. Among them is a 1986 article in the IBM Systems Journal titled "Windowing: Computer Processing of Dates Outside the Twentieth Century."

Dickens argued that the article doesn't constitute prior art because it calls for data to be reformatted in a way different from the one specified in his patent. "There's nothing like my patent anywhere in the prior art," he maintained.

Cray contends that Dickens is just trying to get his "just due" for an invention that he believes has saved corporate America billions of dollars in Y2K repairs. "This is penicillin for computers," the lawyer said. "Bruce is entitled to get something back for everyone using his penicillin."

But Dickens, who is married and has two daughters, isn't taking anything for granted yet. He's still holding down his day job as a systems analyst at Boeing. He said he pursues his patent royalties during lunch and after work.

He's also trying to inject himself into the public spotlight. He hired a public relations consultant and has since appeared on CNN and the television show "Extra," where he commented on a recent made-for- television movie about Y2K catastrophes. He has even fashioned an oft- repeated sound bite, calling his patent "a simple and elegant solution to a very complex problem."

But to many in the industry, Dickens is more an opportunist than a savior.

"He is the poster child for exactly what we're trying to avoid," said Pearl of the Information Technology Association of America, "people trying to make money off good corporate citizens who made every effort to be Y2K-ready."

Copyright (C) 1999, The Washington Post. Reprinted with permission.

Reported By The Washington Post.

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