Compton Patent Claim Illustration

Compton’s Patent R.I.P. – An Afterthought

When the Patent Office reversed course in 1994 and withdrew the patent it had issued just the year before, Britannica challenged the action and brought suit. Years later, a federal district court in Washington, D.C. found the Patent Office in error and confirmed that no invalidating prior art had preceded the Britannica invention. The result was that in 2002 the Patent Office again issued the Compton’s Patent. Finally, 13 years after filing its original patent application, Britannica could finally begin to try to monetize its invention.

By this time though, the technology associated with the patent had rapidly evolved. When Britannica approached non-encyclopedia companies asking them to license the patent, they declined to acknowledge the patent’s validity, notwithstanding it prior validation after two lengthy investigations by the Patent Office. In response, Britannica brought another lawsuit asserting its rights against some of the infringers. In this subsequent litigation, again no dispositive prior art was ever presented showing that the invention had been made by anyone else before the Compton’s Patent application was filed in 1989.

As could be expected, attorneys for one of these parties being sued for infringement began wading through the already complex patent history. Lo and behold, they found a useful needle in the haystack. They discovered years after the mistake could have been cured that the Washington, D.C. law firm Britannica had hired to draft and file the patent application in the Patent Office had dropped the first page of one of the Xerox copies of the patent application it had filed. It had also made a scrivener’s error by dropping a routine boilerplate phrase required to be recited in the application.

Dropping the page in a copying error and failing to put in the usual technical language required by the patent statute was bad news for Britannica. The result was that in 2009 the Compton’s Patent was ruled invalid for technical reasons having nothing to do with the substance, novelty or importance of the invention itself.

But for the law firm’s lapse, it appeared that the invention would have otherwise gone on to produce substantial royalties. By making public the details of the invention in its 1989 patent application it had been possible for other companies to quickly digest the nature of the invention and incorporate it into their own products. The application’s detailed drawings and the textual descriptions of the innards of the invention gave rise to the immediate and wide dissemination of exactly how to structure and write the complex software needed to permit simultaneous access to multiple and disparate databases of text, sound, images and videos.

The only good news in this case’s outcome for Britannica was that it had inadvertently cemented a perfectly good malpractice claim against the law firm that had negligently botched its job.

In the course of proving a case of legal malpractice involving a patent, the party alleging malpractice must show that a lawyer’s mistake actually damaged it. If you’re defending against such a claim of malpractice, you can get yourself off the hook if you can show that the patent in question was invalid and never should have been issued.

Therefore, when Britannica sued the law firm for legal malpractice, there was what’s known as “the case within the case.” This meant that the outcome of Britannica’s malpractice case would also finally bring a ruling on the underlying merits of its patent. If this turned out to be good news for EB, it would be bad news for the Washington law firm. If the damages it was ordered to pay exceeded its malpractice insurance, it might bankrupt the law firm and perhaps some of its partners.

However undesirable it was for Britannica to have to sue a Washington, D.C. law firm in a District of Columbia court, it was unavoidable. When the dust finally settled in 2015 on this final dispute involving the Compton’s Patent, the federal district court hearing the case ruled that the invention was not patentable. This meant that while legal malpractice may have occurred, Britannica couldn’t have been damaged.

In arriving at this conclusion, the court took a fresh look at the basic requirements for a patent to issue. It set aside the fact that in two separate instances the Patent Office had never found or ever seriously considered whether the software patent in question constituted what’s called “patentable subject matter.” Everyone before had always thought that it was, as the U.S. Supreme Court had long before ruled that software inventions could be patented.

Under the U.S. Patent Act, for a patent to be valid, it must have the attributes of utility, novelty, nonobviousness, enablement and it must cover patentable subject matter. There was no fresh evidence presented to the court in the malpractice case that the Compton’s patent didn’t meet the tests of being useful, novel, and nonobvious. It also had clearly enabled others ordinarily skilled in the art to replicate the invention. However, the court decided that Britannica’s patent failed the remaining requirement for a valid patent because the patent did not meet the court’s definition of “patentable subject matter.”

The court said that “abstract ideas” were not patentable under the longstanding rule that an idea itself is not patentable. It said that the Compton’s patent claims were drawn to the abstract idea of collecting, recognizing, and storing data to be easily found and retrieved, and that this was an abstract concept and therefore not patent-eligible. In its ruling, the court put it this way:

A “database” is nothing more than an organized collection of information. Humans have been collecting and organizing information and storing it in printed form for thousands of years. Indeed, encyclopedias—described as a type of “database” in the specification—have existed for thousands of years. For just as long, humans have organized information so that it could be searched for and retrieved by users: For example, encyclopedias typically are organized in alphabetical order and are searchable using indexes, and articles generally contain cross-references to other articles on similar topics. These activities long predate the advent of computers. Such fundamental human activities are “abstract ideas…”

Thus it was that a quarter century after the Compton’s patent application was filed in 1989, the last hope of Britannica profiting from its investment in the invention was extinguished.

Having hired the law firm that drafted the Compton’s Patent application in 1989, I was present at the creation as it were. I had subsequently spent 15 years directing and supervising the torturous regulatory and judicial quagmire that ensued. As it turned out, I missed the third act of the Compton’s Patent drama when Britannica’s malpractice claim finally died in 2015. My absence from the finale was a function of my 2014 retirement at the age 72 after 28 year as Encyclopaedia Britannica’s General Counsel.

Engaged in the chasing of the Compton’s Patent holy grail for all those years, I have a few simple afterthoughts as to how it all went down.

I think the patent would never have gotten in trouble in the first place had not Dr. Stanley Frank overreached in pursuing his dreams of a quick payoff. In the 2005 book Intellectual Property Rights in Frontier Industries – Software and Biotechnology edited by Robert W. Hahn, authors Stuart J. H. Graham and David C. Mowery write that shortly after the Patent’s issuance by the Patent Office in 1993:

Compton’s president, Stanley Frank, suggested that the firm did not want to slow growth in the multimedia industry, but he did “want the public to recognize Compton’s NewMedia as the pioneer in this industry, promote a standard that can be used by every developer, and be compensated for the investments we have made.” Armed with this patent, Compton’s traveled to Comdex, the computer industry trade show, to detail its licensing terms to competitors, which involved payment of a 1 percent royalty for a nonexclusive license. Compton’s appearance at Comdex launched a political controversy that culminated in an unusual event—the U.S. Patent and Trademark Office reconsidered and invalidated the Compton’s patent. On December 17, 1993, the USPTO ordered an internal reexamination of Compton’s patent because, in the words of Commissioner Lehman, “this patent caused a great deal of angst in the industry.” On March 28, 1994, the USPTO released a preliminary statement declaring that “[a]ll claims in Compton’s multimedia patent issued in August 1993 have been rejected on the grounds that they lack ‘novelty’ or are obvious in view of prior art.”

In the July 1994 issue of Wired magazine, the article Patently Absurd threw further light on how the Compton’s Patent issuance created an almost instant political bonfire:

The Compton’s patent contained 41 claims that broadly covered any multimedia database allowing users to simultaneously search for text, graphics, and sounds – basic features found in virtually every multimedia product on the market. The Patent Office granted the patent on August 31, 1993, but it went unnoticed until mid- November, when Compton’s made the unusual move of announcing its patent at the computer industry’s largest trade show, Comdex, along with a veiled threat to sue any multimedia publisher that wouldn’t either sell its products through Compton’s or pay Compton’s royalties for a license to the patent. Compton’s president, Stanley Frank, stated it smugly for the press: “We invented multimedia.”

The denizens of the multimedia industry thought otherwise. In dozens of newspapers around the country, experts asserted that Compton’s patent was clearly invalid, because the techniques that it described were widely used before the patent’s October 26, 1989, filing date. Rob Lippincott, the president of the Multimedia Industry Association, called the patent “a 41-count snow job.” Even Commissioner Lehman thought that something was wrong.

“They went to a trade show and told everybody about it. They said they were going to sue everyone,” says Lehman, who first learned of the Compton’s patent from reading an article in the San Jose Mercury News. “I try not to be a bureaucrat,” he adds. “The traditional bureaucratic response would be to stick your head in the mud and not pay attention to what anybody thinks.” Instead, Lehman called up Gerald Goldberg, director of Group 2300 [in the Patent Office], to find out what had happened.

Like Lehman, Goldberg had learned about the Compton’s patent from reading the article in the Mercury News. “We pulled the patent file and I took a look at it,” recalls Goldberg. “I spoke with the examiner. We felt the examiner had done an adequate job.” In this particular patent application, says Goldberg, the Compton’s lawyer had included an extensive collection of prior art citations – none of which described exactly what the Compton’s patent claimed to have invented. Without a piece of paper that proved that the invention on the Compton’s application was not new, the examiner had no choice but to award Compton’s the patent.

To cap things off Compton’s New Media officers had also been quoted as saying offhandedly that the patent covered “anything on a chip.” This clearly added even more fuel to the fire.

So, to me the biggest fly in the ointment was Frank’s hubris. Frank’s announced desire to be paid a 1% royalty on multimedia sales in the middle of the industry’s biggest conference on the newly emerging technology was not just a political misstep, or overreaching, it was nuts.

Unfortunately, the consequent delay in enforcing the Compton’s Patent brought about by Frank’s misjudgment is what really killed the patent. The political blowup following Frank’s Comdex declaration caused the Patent Office to promptly pull the patent. This caused a nine-year delay in Britannica being able to enforce what the Patent Office would again find to be a perfectly valid patent. At least one academic study has gone into the details of the Patent Office’s questionable decision to reexamine the patent. Patent Reexamination and the PTO: Compton’s Patent Invalidated at the Commissioner’s Request, 14 J. Marshall J. Computer & Info. L. 379 (1996), by Terri Suzette Hughes. Further, the law firm’s technical error that might have been caught and cured early on, ultimately led to invalidation of the patent in 2009. This gave way to a further six- year delay pending Britannica’s malpractice case claims against its law firm being finally assessed and turned down by a court in 2015.

The delay was deadly because by 2015 software technology had dramatically advanced in the quarter century since the Compton’s Patent application was originally filed. By 2015, everything that was astoundingly novel back in 1989 had not only become commonplace, but it was so old hat that it was not hard for the federal court involved to conclude that the invention was no big deal and merely “an abstract idea.” Also, it was easy for people to surmise that a company founded in 1768 like Encyclopaedia Britannica, a stodgy reference publisher of multi- volume printed encyclopedias, was just not in the right company with the emerging technology giants of Silicon Valley. It was hardly a regular player in the high-tech patent field.

I think there was a good chance Compton’s Patent could have had a normal commercial life had not the political uproar at its birth delayed its day in court to a point in time when a usually correctible technical error could no longer be fixed and the substantive patent law had evolved in the meantime to make software patents generally harder to come by.

To my eye, the malpractice court’s conclusion may have saved a local law firm from having to pay for an egregious error, but the way it arrived at this conclusion gave short shrift to the unique contribution Encyclopaedia Britannica had made to the advancement to the human/computer interface.

If Stanley Frank is the fall guy for the story of a fundamental patent that lived and died several times over a quarter century, could there possibly be a hero anywhere in this found and lost tale?

Absolutely! Let Harold Kester be given his due. Harold more than any other single person was the true inventor of the breakthrough invention embodied in the Compton’s Multimedia Encyclopedia. In the long history of the Compton’s Patent litigation, neither the Patent Office nor anyone else successfully brought forward prior art that challenged the fact that the invention Harold Kester was central to creating was the very first of its kind. His Del Mar group had been hired by Britannica to provide a search engine for the unusual and novel CD-ROM Britannica was determined to develop and under Harold Kester’s exceptional leadership they with ESC and Britannica’s editors accomplished what they were asked to do.

When I first learned of the scope of the computer software undertaking being launched I travelled many times from Chicago to Solano Beach and La Jolla, California where Harold Kester’s led the small team that worked on the search engine at the heart of the project. Having watched Harold at white boards leading his team through the analysis of the software’s internal organization, I can personally say Harold the key genius that could put all the pieces together.

Harold was the mathematical genius who was able to couple the nascent science of computer search technology with the recent computer hardware advances. Though others were involved on the teams that put his ideas to work, Harold Kester was really the one who can be primarily thanked for the Compton’s innovation.

In recalling this part of the development of the human/computer interface early in the Information Age, I was left wondering what the reaction would have been if Ted Nelson had been able to bring his Xanadu Project to fruition in the form of a similarly novel, functional, and valuable end product. Would people really have thought that the novelty and ingenuity of his hyperlinked product was nothing more than a display of a “fundamental human activity.” Would it have been dismissed as a mere “abstract idea” that had already been floating around for thousands of years. Personally, I think not.

What do you think?