Multiple Y2K fixes could touch off legal maelstrom

Bruce Dickens' decision to contact major companies about fees and royalties for infringement of Y2K corrective method may entice some 30 other patent holders to go out looking for money and prompt a slew of legal battles.

5 min read
As controversy grows over a new patent for a commonly used programming technique to prepare computers for the Year 2000, disputes over this claim and more than 30 similar patents threaten to set off a wave of Y2K litigation, analysts warn.

The U.S. Patent and Trademark Office (PTO) has issued at least 30 patents, seven just this year, for methods, processes and solutions that address fixes for the Year 2000 bug, according to research conducted by Giga Information Group.

Observers worry that a recent decision by one such patent holder to contact major companies about the payment of fees and royalties for infringement of his patent on a Y2K corrective method may entice other patent holders to go out looking for money and, if challenged, prompt a slew of legal battles.

As previously reported, aircraft manufacturer McDonnell Douglas was issued the patent for a software technique called "windowing" used to correct year 2000 glitches in computer software. The company then handed the patent over to the technique's inventor, Bruce Dickens.

Dickens recently announced that he Y2K: The cost of fear will license the patent for an up-front fee and royalty payments. After the date change, licensing fees will increase substantially for firms unwilling to agree to his initial offer.

"We're concerned that if Dickens' patent is enforced, then some of the other patent holders will think they also can get in on the money," said Kazim Isfahani, an analyst with Giga.

Although many of the earlier patent holders made Y2K tools or started consulting companies based on their patented fix, Isfahani is worried some may be biding their time and could launch a last-minute--and unwelcome--surprise on companies and software makers.

Many of the other existing patents don't encompass a method as popular as the "windowing" technique patented by Dickens, but they do involve ways to renovate code that could be in use by consultants, companies and individuals today.

One patent issued this year and highlighted by Isfahani's report provides a new date code with a two-digit year code that is compatible with standard date codes. It's capable of representing dates well beyond the year 1999. The invention defines a set of extended symbols that may be used as first or second digits in a two-digit year format, according to Patent Office documents.

Another patent Back to Year 2000 Index Page was issued this year for a method for modifying and operating a computer system to perform date operations on date fields spanning centuries.

Though other patents have been issued, none of the patent holders have gone as far to get reimbursements for patent infringements as Dickens, according to analysts.

Isfahani thinks some companies will pay off the fees to fend off Dickens, while other companies will not pay the fee because they can't and challenge the patent in court. Others forecast a similar scenario and expect that legal battles may follow.

"I have little doubt that there will be legal battles coming out of this," said Dale Vecchio, an analyst with Gartner Group.

Dickens' windowing patent is one of the most popular of several techniques used to enable software to recognize four-digit year fields. A typical windowing fix would reconfigure software so that years entered as 00-29 are assumed to represent 2000 through 2029, and years entered as 30-99 represent 1930 through 1999.

Windowing is considered a faster way of fixing corrupted code than more traditional methods--such as the expansion method, for example, which allows software to recognize four-digit dates, like the year 2000.

'The attempt to collect fees and royalties from companies that had previously used the now-patented technology could deal a financial blow to thousands of companies, and analysts say that roughly 90 percent of Fortune 500 firms have used some form of windowing to fix their computer systems," the report says.

Vecchio said the fees coupled with court costs could go into the billions. "During my research I found that SAP, PeopleSoft and Microsoft all have used some form of the windowing solution."

Don Jones, Microsoft's Year 2000 product manager, said the software giant's legal and trademark teams are currently looking over Dicken's patent. "Microsoft has been using windowing in some of its products as early the 80s." He would not comment whether the company has received a letter from Dickens.

"Some of our products use it," said John Giordano, CEO of Massachusetts-based Peritus Software Services. "The question is: Who is he going to go after? Right now [Dickens] seems to be interested in big end users."

Giordano said if the patent stands up to initial scrutiny in court, his company will talk to its lawyers and see what step to take next. "Right now everyone is in a wait-and-see mode to see what happens" with Dickens' first attempts at seeking licensing agreements.

Keeping with company policy to not discuss anything related to potential litigation, a spokesperson for IBM would not comment on whether the company received a letter from Dickens, but did say the company uses the "windowing" method in some of its technology.

Legal experts said that the challenge for firms that want to fight Dickens's patent will be proving that the patent should be revoked. Experts point out that any patent is presumed valid once it's issued. The defendant would also have to show that the patent is either invalid or that they didn't infringe upon the patent.

Jeffery Neuberger, a patent attorney with the New York-based firm Brown Raysman, Millstein, Felder and Steiner, said companies will have to prove that windowing is not "novel" or "non-obvious."

Once challenged, the patent will most likely fall to pieces, Tom Oleson, an analyst at International Data Corporation, believes.

"I don't think it will go anywhere," said Oleson. "It's just a person trying to make a killing. Companies will ignore it and he'll be forced to take them to court, where I think it will get thrown out."

Still, the threat of patent enforcement could stir legal action. "If vendors alone used the windowing solution, and I know end users and corporate IT departments did as well, we are talking about fees that will go into the millions and billions of dollars," Vecchio warned.