As the
pace of technological innovation increases, there are frequently
conflicting claims over who "owns" new developments. Such disputes
are resolved under the nation's intellectual property laws, which
attorneys see as checks and balances that protect innovation while
deterring excessive claims of technology ownership.
Sometimes intellectual property disputes arise over patents. One
recent example is a patent issued to St. Louis-based aircraft
manufacturer McDonnell Douglas Corp. for the "windowing" year 2000
remediation technique. In windowing, some two-digit years, such as
99, are assigned to the 20th century, while earlier years, such as
11, are assigned to the 21st century. The company transferred the
patent to its inventor, Bruce Dickens, who announced that he would
demand an up-front fee and royalty payments from every corporation
that has used windowing.
Can You Keep a Secret?
In addition to covering patents, intellectual property covers
products and personal technical knowledge, as information technology
workers who change jobs sometimes find out when they or their new
employers are sued for theft of trade secrets. Jonathan Band, an
attorney at the Washington office of San Francisco-based Morrison
& Foerster LLP, says, "In the old days, it wasn't such an issue
because someone would work for IBM for his whole career. Now people
work for a couple of companies and then start their own companies.
"Plus," he added, "things are more complicated now. In the old
days, employees were asked to sign nondisclosure agreements (about
technology that was considered a trade secret). Now, as people
bounce from company to company, sometimes as contractors, sometimes
as employees, they are sometimes asked to sign agreements and
sometimes they aren't. It's all very sloppy because it's not clear
what IT workers agree to."
As for Dickens, will he prevail and send legal ripples throughout
the world of IT innovation? Kenneth K. Dort, a senior litigation
partner at Gordon & Glickson LLC in Chicago, says he doesn't
think so -- largely because of some built-in safeguards in
intellectual property law that weed out ideas that shouldn't be
protected.
"Most people don't think the Dickens patent is valid," Dort says.
"To patent an invention, it must be novel -- new and different --
and nonobvious. Most people view this approach as obvious. The
standard for obviousness is, 'Would someone in the cutting edge of
the relevant art think it was obvious?' Most people think that
masking the date in software, as windowing does, is not all that
ingenious."
But what if Dickens' claims are upheld? The claims are based
partly on an important 1998 federal appeals court decision, the
State Street Bank & Trust Co. case, says Jeffrey R. Kuester, an
intellectual property attorney at Thomas, Kayden, Horstemeyer &
Risley LLP in Atlanta.
In that case, a federal court expanded on the idea that software
should be patented rather than copyrighted when it upheld a patent
covering a business method of calculating financial information.
Patents are believed to be the stronger legal protection, so the
decision opened the door to patenting business methods. Kuester says
he sees mixed results for IT if Dickens prevails.
"The patent would effectively give him a limited-time monopoly,
and innovation would be encouraged from that perspective," Kuester
says. "But another way that innovation occurs is by people using
existing technology as a footstool to better technology. Software is
unique in that it involves borrowing from other systems and
solutions. If Dickens is successful, will people innovate in the
future by incorporating known software technology into their new
solutions? The answer is, 'Maybe not.' "
Band says that even if the Dickens patent stands up, its impact
may not be far-reaching.
"You can have a legal case, such as the State Street Bank &
Trust decision, which goes beyond the specific facts of the case and
establishes new legal doctrines," Band says. "I don't think that
will come out of the Dickens patent. I think it could ultimately
have a limited impact in that it would affect people who did Y2K
work, but it doesn't have implications for anything else."
Can't Take It With You
Intellectual property law also deals with how technical knowledge
affects IT workers' jobs. When Seattle-based Amazon.com Inc. hired
10 former IT employees of Wal-Mart Stores Inc., Wal-Mart sued,
alleging theft of trade secrets. The case later was settled out of
court. But Bentonville, Ark.-based Wal-Mart didn't have a strong
case because it hadn't clearly explained to IT employees what
information it considered to be secret, Dort says.
The IT technology at stake involved modern data warehousing, but
suits of this type are hardly new. For many years, technology firms
have been sensitive about IT people leaving companies and taking
their technical know-how with them.
"It's still as big a problem as (it has) ever been," Kuester
says. "Any knowledge that employees take with them that is
considered to be a trade secret of the former employer cannot be
used to implement a solution for the new employer. But the problem
is that not all companies require employees to sign agreements that
cover this, and many employers are not even clear about what is a
trade secret. As a result, many IT employees don't know what they
can and cannot use if they leave."
How do such cases get resolved? Unless a company can prove that a
former employee has improperly used its trade secrets, the courts
tend to side with the worker, Dort says.
Facts, or Protected Data?
Intellectual property law is in a state of flux, and the big
issue this year will be whether Congress votes to extend legal
protection to factual information contained in databases, says Marc
Pearl, general counsel and senior vice president of governmental
affairs at the Information Technology Association of America in
Arlington, Va.
Some companies that compile databases want such protection, while
other companies oppose it for fear that widely used data such as
basketball scores or stock quotes suddenly could become legally
protected -- and thus restricted -- information.
Jonathan Band, an attorney at the Washington office of San
Francisco-based Morrison & Foerster, says he would rather not
see today's intellectual property laws changed because he believes
they provide a good balance between enough protection for technology
developers and enough freedom to promote technological progress.
"We need to have intellectual property laws because we need some
incentives for people to invest in the development of innovative
products," Band says. "But if there's too much protection, it
stifles innovation. If a person with a previous invention can stop
me from doing something new based on what he or she did, I will
never be able to do anything."
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