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15
Optoelectronics

EUGENE I. GORDON

For the purpose of this exposition, intellectual property rights (IPRs) in science and technology consist of two key components: inventions and proprietary information. The basic purpose of patent and patent license law, and the body of law and precedent surrounding protection of proprietary information, is to encourage investment in research and development, and in manufacturing and marketing activities that utilize IPRs. The basic intent is to encourage commercial enterprise. Viewed from the simplest perspective, intellectual property is a property and subject to the protection of the law. A key issue in new technologies such as software and biogenetics, is what constitutes property and for how long it should remain property. A second key issue is the variation in protection available in different countries. The extreme importance to the United States of a revitalized manufacturing capability makes reexamination of the legal and practical aspects of protecting IPRs desirable.

This chapter differs from most of the others in two important aspects: First, it presents the view of an engineering practitioner rather than a legal strategist. Second, it focuses on proprietary information as well as patents.

Optoelectronics has become pervasive in all aspects of high technology, including manufacturing technology. Products based on optoelectronics are prominent in such fields as information, communication and entertainment systems, medicine, R&D, education, and defense. It would be hard to imagine life without products utilizing optoelectronics. Slackening of investments in activities involving optoelectronics would stall progress in many



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Global Dimensions of Intellectual Property Rights in Science and Technology 15 Optoelectronics EUGENE I. GORDON For the purpose of this exposition, intellectual property rights (IPRs) in science and technology consist of two key components: inventions and proprietary information. The basic purpose of patent and patent license law, and the body of law and precedent surrounding protection of proprietary information, is to encourage investment in research and development, and in manufacturing and marketing activities that utilize IPRs. The basic intent is to encourage commercial enterprise. Viewed from the simplest perspective, intellectual property is a property and subject to the protection of the law. A key issue in new technologies such as software and biogenetics, is what constitutes property and for how long it should remain property. A second key issue is the variation in protection available in different countries. The extreme importance to the United States of a revitalized manufacturing capability makes reexamination of the legal and practical aspects of protecting IPRs desirable. This chapter differs from most of the others in two important aspects: First, it presents the view of an engineering practitioner rather than a legal strategist. Second, it focuses on proprietary information as well as patents. Optoelectronics has become pervasive in all aspects of high technology, including manufacturing technology. Products based on optoelectronics are prominent in such fields as information, communication and entertainment systems, medicine, R&D, education, and defense. It would be hard to imagine life without products utilizing optoelectronics. Slackening of investments in activities involving optoelectronics would stall progress in many

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Global Dimensions of Intellectual Property Rights in Science and Technology aspects of commerce, improvements in the quality of life, and our ability to defend ourselves. Optoelectronics is interdependent with electronics, communication and information technology, and computer technology, and shares strategic importance with them. Optoelectronics is not a new field. Around 1880, Alexander Graham Bell patented the Photophone, a system for voice communication utilizing amplitude-modulated sunlight as the electronic signal carrier. During the 1920s, the initial experiments on television were carried out at the AT&T Bell Labs, and extended and carried into commercial reality by the RCA David Sarnoff Labs and others during the 1930s. The advanced cathode-ray tubes (CRTs) developed during that period at Bell Labs were crucial to the early development of radar, so important for success in World War II. Advanced CRTs were used as the memory elements in the first electronic telephone switching service introduced by AT&T late in the 1950s. The laser was invented at Bell Labs in the mid-1950s, and in 1960 the first working laser was demonstrated at Hughes Aircraft Company. In 1970, the first low-loss fiber-optic transmission medium was demonstrated by Corning Glass, and the first room-temperature, continuously operating semiconductor laser was demonstrated at Bell Labs and in the Soviet Union. These form the heart of the current long-haul terrestrial and oceanic transmission systems for voice and data. For example, the first transoceanic underwater communication cable was installed in the mid-1950s. It utilized low-frequency, electron tube repeater and wire cable technology, and had only a few tens of channels. The first optoelectronic cable, TAT-8, based on semiconductor laser repeaters and fiber-optic transmission paths, was installed in the Atlantic Ocean between the United States and England and France, and operated first in December 1988. It has 40,000 voice channels in a cable the diameter of a finger, about the same size as the original electron tube cable. TAT-9, to be installed in 1992, will have more capacity than all previous cables combined. The semiconductor laser is also used in compact disc recording. In 1969, the first charge coupled device (CCD), and in 1970 the first miniature color video cameras based on CCDs, were invented and developed at Bell Labs. The CCD has become the sensing element basis for most fax machines, the Camcorder, and many important military applications used in the recent Gulf War. It is often used in commercial television and in surveillance applications. The film-based still camera will eventually be supplanted by a CCD-based camera, and computer-based editing and transmission will change the nature of photography for advanced amateurs and news reporting. As the name implies, optoelectronics is a part of the broader technological field known as "electronics." In optoelectronics, light rather than electrons plays a role in moving energy or information from one point to another. Actually, all energy and information in electronics is conveyed in

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Global Dimensions of Intellectual Property Rights in Science and Technology the form of electromagnetic waves. The real distinction is the frequency of the waves or the energy of the photons involved. Electronics implies photon energies associated with microwaves, radio frequency, low frequency, and ultimately direct current with vanishingly small photon energy. Optoelectronics implies that the photons involved in the interaction have energy associated with infrared, visible, or ultraviolet radiation. Optoelectronics has become the preferred means for broadband, long-distance signal transmission for shore-to-shore or transoceanic communication. As an electronic path it is the preferred means to distances as short as meters. In the next decade this may be reduced to centimeters and ultimately millimeters. This will have a substantial impact on the speed and compactness of electronic systems. Ultimately optoelectronics will provide transoceanic communications without repeaters that will be of much lower cost than terrestrial long-haul equivalents and easier to implement because the right of way is so unconstrained. This will have a profound effect on the nature of international business and politics. In many systems, optoelectronics is key to the information display essential for humans involved in the system. Sensing is often based on light, and optoelectronics consequently plays a key role in sensing components in many manufacturing systems and is the basis for most computer-integrated manufacturing. In my opinion, the reason for special attention to optoelectronics in this forum lies in the advanced nature and rapid pace of the technology; its high vitality despite its long history; and its pervasive, ubiquitous influence. I have not perceived anything special about optoelectronics other than its vitality and pervasiveness in virtually any modern system. The ubiquitous and growing presence of optoelectronics in business offices, stores and markets, manufacturing facilities, financial institutions, and military arsenals, and its basic role as the articulation that binds this country and the world, are relatively new. In most cases, optoelectronic technology is a component technology. Optoelectronic components are included in larger electronic systems. Conventional electronics is complex, but the basic elements are relatively stable. Both electronics and optoelectronics are practiced as a business in which components are made by specialists and assembled into systems or equipment by others. There are exceptions, but even very large companies such as AT&T and IBM purchase many of the components they use. The distinction I make is that manufacture of many optoelectronic components is typically not at the scale of electronic components, and there are many more small suppliers. The manufacture of advanced integrated circuits is becoming international in nature because of the enormous investments in facilities required. Optoelectronics is not yet at that point and is not likely to get there except in highly specialized situations.

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Global Dimensions of Intellectual Property Rights in Science and Technology The elements of vitality and relative smallness pose special problems associated with stimulating entrepreneurial activity and investment. I would like to focus on two of these: protection of proprietary information and patent law. PROTECTION OF PROPRIETARY INFORMATION The vitality and pervasiveness of optoelectronics provide enhanced opportunities for entrepreneurial and small-business activities. Frequently, new businesses are started by individuals who have left the employment of a large, well-established company. Alternately, the individuals leave the employment of the large company and join a smaller company engaged in aspects of the same business. Both situations occur frequently in rapidly growing areas of commerce, and optoelectronics is especially distinguished in this respect. Thus, there are special problems in optoelectronics not found in well-established, stable technology areas. The loss of individuals to another company generally causes some concern to a large company, which may have a significant market (or potentially significant market) in a given area and may have invested substantially in R&D and manufacturing facilities in that area. The company has invested significantly in the hiring and training of individuals in the technology area. The individuals leave gaps that must be filled by relatively untrained and unskilled new employees and possibly by new managers. These individuals working for a smaller company may attract more of the large company's employees to the other company. They carry with them proprietary information that potentially can be used to the advantage of the smaller company. Although the large company possesses economy of scale, the smaller company can usually move with greater alacrity, boldness, economy, and freedom than the large company. It can capture niche markets, utilize the knowledge of the market gained from new individuals, and capitalize on the proprietary information and the associated technology without having incurred the R&D cost. The smaller company can cause considerable damage to the actual and potential market of the large company. The law provides substantial protection for companies holding proprietary information. Companies can approach other companies that they believe may be using their proprietary information unlawfully, and request discussions and development of means to give them reassurance that their information is protected. Indeed, in the absence of a demonstrably aggressive approach to protection, they will lose the legal protection of their proprietary information. Not only must they scrupulously guard it internally to maintain its status as proprietary information, but they must be tough and aggressive with others who they suspect may be violating it. Companies that refuse to cooperate are subject to injunctions and litiga-

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Global Dimensions of Intellectual Property Rights in Science and Technology tion. When damages can be demonstrated, the awards are often trebled. Thus the legal consequences of the unlawful use of proprietary information can be painful for the company found guilty. Proving guilt is another matter. Litigation is expensive, distracting, and time-consuming, and the results are not predictable. Large companies are not anxious to use legal protection, but it poses no major downside risk unless the company engages in demonstrably illegal behavior in the name of protecting its proprietary information. However, for the small company, litigation as the respondent can be disastrous. The upside is minimal, and the downside is the potential for loss or major damage to the company and major legal expenses. Large companies sometimes use the threat of litigation or actual litigation effectively as a major weapon in their attempt to protect their proprietary information. Unfortunately, they may also use it for other purposes that are not legal. The law provides protection from wholesale raiding of the employees of one company by another. That is a separate issue and is not covered here. The loss of employees may be viewed as significant to the company even when the numbers are sufficiently low that no clear case for raiding can be made. Hence, companies sometimes use protection of proprietary information as a screen for what in reality are attempts to limit loss of key employees (when the number lost is lower than that protected against by conventional legal practice). Ostensible protection of proprietary information can be used to hinder the start-up or small company so that it cannot compete effectively in several ways: by tying its management up, by diverting its funds to legal expenses, by inhibiting its ability to raise additional capital, by casting doubt on its ability to deliver a product unencumbered by legal difficulties, and by limiting its ability to hire new people who may be concerned about the future of the company. Indeed, litigation or the threat of litigation casts a deep shadow on new or small companies, and effectively hobbles them. It further protects the large company, whose own employees are intimidated by what they see and are loathe to leave to join the target company or other potential target companies. It also subtly intimidates employees of the large company from planning other start-ups. The point is that although companies have a right and an obligation to protect their proprietary information, they may also use protection of proprietary information in violation of antitrust law. One may argue that individuals in small companies or aspiring to new businesses have a right to earn a livelihood using their intellect, experience, training, and acquired knowledge from previous employment. It may be further argued that a first company, trying to prevent individuals from joining a second company or practicing their profession in the area of their expertise on behalf of that company, because of the alleged use or inevitable use of the proprietary information of the first company, is acting in restraint of the rights of the

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Global Dimensions of Intellectual Property Rights in Science and Technology individuals involved to earn a livelihood. The boundary between experience and acquired knowledge on the one hand and proprietary information is not well defined, however, and is probably not amenable to good definition. The courts have a difficult time with these issues, but they manage. In some cases, however, the first company merely charges ''inevitable use of their proprietary information" by virtue of the close association of the individuals involved with that proprietary information and the associated technology. The threat of an injunction or lawsuit is sometimes enough to allow the first company to gain unfair advantage. The implication is that you are "guilty because of the potential for committing a crime." Later, I describe such a circumstance, and also try to draw some conclusions and make some recommendations. PROTECTION OF PATENTS With recent changes in the patent law, the process of obtaining a patent for an invention has been vastly improved. Getting a patent is time-consuming and expensive (on the order of $10,000-$20,000), but the process is straightforward. Most patents are defensive in nature; that is, the purpose is to preserve the right of the assignee to practice an invention without interference from others, or to prevent others from using the technology and harming the business of the assignee. Some patents are offensive in nature; their purpose is to make money by selling or licensing the patent. Either way, the granting of a patent is not a guarantee of a valid patent. Although many patents are strong, many other patents are issued that are not valid. Sometimes they are not distinguishable from existing patents or disclosures in the public domain. It is not clear what the source of the problem is. Possibly the examiners are overloaded and do not search or distinguish carefully. In some cases, because of overload, examiners are pressed into working in areas in which they have limited experience. Possibly the Patent Office has chosen to let the courts make the tough decisions. It is sometimes said that no patent is valid until it is tested in court. The cost of defending a patent under challenge, however, can be extremely high, for both the challenger and the defender. When the court is placed in the position of determining the validity of a patent relating to sophisticated technology like that usually involved in optoelectronics, neither the judge nor the jury may be sufficiently knowledgeable or experienced to make a reasoned judgment. Thus, the litigant with larger financial resources may have the advantage. The alternative is a much tougher and more thorough scrutiny of patent applications by the examiners. This would make patents more difficult to acquire and probably would act to inhibit submission of applications, putting the burden on the inventors and their companies to be more discrimi-

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Global Dimensions of Intellectual Property Rights in Science and Technology nating. Although this would reduce the number of patents issuing, I suspect that the quality would be vastly increased, and the number of tests in court would be reduced, making the issuing of a patent more meaningful. A short case history is presented later, in which the author served as an expert witness in a patent interference trial between two well known laser companies, which illustrates some of the above points. PROTECTION OF PROPRIETARY INFORMATION: AT&T VERSUS LYTEL During 1982-1983, AT&T prepared for divestiture. In early 1983 the eventual founder of a semiconductor laser company announced his intention to take early retirement from AT&T Bell Labs after 26 years of service, in turn, as a member of technical staff, supervisor, department head, and finally laboratory director. During his last four years he had led a laboratory developing and introducing into manufacture devices for use in fiber-optic communication systems. After his retirement in July 1983, this individual started an active consulting career and worked regularly for AMP, Inc. of Harrisburg, Pennsylvania. AMP was a well-known connector company interested in moving into fiber-optic interconnection technology. While consulting, the individual in question prepared a business plan for starting a company to manufacture semiconductor lasers and other products that would be of interest to AMP. In November, he completed the plan and incorporated LYTEL, a Delaware corporation, to be the start-up company. He also presented the plan to AMP management, who indicated strong interest in being an investor. He informed AT&T of his plans to start a laser company. Its main concern, as expressed to him, was that he not use AT&T proprietary information and not raid its employees or hire too many of them. The number six was suggested as a maximum tolerable loss. AMP's main concern was that LYTEL not use any proprietary information belonging to AT&T or do anything that would upset them; AT&T was an important customer for AMP's products. Those concerns were major ones for the founder as well, because he valued his association with AT&T and felt that using its proprietary information would be unethical. At this point the initial management team for LYTEL came together to plan the company and refine the business plan. One of the main activities was establishing process instructions for the products to be manufactured that would use only processes defined in the published literature. The team also tried to establish what information AT&T would be able to legitimately claim as proprietary information. They concluded that there was virtually nothing, for two reasons: (1) AT&T had a policy of open and timely publication of research results. This was dictated by the public utility commissions that

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Global Dimensions of Intellectual Property Rights in Science and Technology authorized the license contract fee (LCF) as a legitimate operating company expense. The LCF was the source of the research funds used by Bell Labs. (2) Although AT&T played a key role in the early research on semiconductor laser diodes (SLDs), it had made some decisions during the decade of the 1970s that put it well behind in the long-wavelength SLD technology that LYTEL planned to manufacture. For example, the long-wavelength SLDs for TAT-8 and the continental fiber-optic systems implemented during the decade of the 1980s were made for AT&T by Hitachi. AT&T was manufacturing only short-wavelength SLDs. Thus LYTEL was confident that it would not compromise AT&T. The term sheet for the purchase by AMP of LYTEL shares was signed in February 1984. The final stock purchase was scheduled for May, and the initial group of managers assembled to begin work as of April 1, 1984. It consisted of two newly resigned employees of AT&T Bell Labs and three former employees, none recently employed by AT&T, one of whom had never worked on SLDs. LYTEL was confident that it had done nothing that could antagonize AT&T. The company was surprised when several days later it received a formal letter from AT&T asking LYTEL to voluntarily accept an injunction not to go into the laser business or anything associated with it. The basis for the request was the claim that "LYTEL would inevitably compromise AT&T's proprietary information." It was implied that if LYTEL did not accept the injunction, AT&T would sue. It appeared, in retrospect, that AT&T's response the previous November had simply given it time to put together a plan of action. LYTEL's reaction at the time was one of surprise, whereas AMP's reaction was one of dismay. As a result, there was a long delay in completing the stock purchase while LYTEL tried to negotiate an arbitration agreement that would assure AT&T that its proprietary information was not being compromised. During that time the founder's complete energy was dedicated to dealing with the AT&T action. LYTEL ran out of money advanced by AMP and salaries were at risk. Finally, in August, LYTEL reached an agreement on arbitration with AT&T. The AMP stock purchase was completed shortly thereafter. The arbitration agreement was onerous, from LYTEL's point of view. LYTEL had to disclose its business plan and all the details of its processes. AT&T produced a list of items that it claimed were proprietary information. LYTEL was not allowed to see the list, ostensibly to protect AT&T proprietary information—AT&T claimed LYTEL might be reminded of something it had forgotten. LYTEL was not allowed to talk to AT&T lawyers about the claimed proprietary information. LYTEL had to work through its own lawyers, who could not tell it what AT&T was claiming. Its lawyers could deal with the list only by asking LYTEL engineers leading questions. The arbitrator looked for overlap in the list. After the overlap was established, discussions could

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Global Dimensions of Intellectual Property Rights in Science and Technology ensue over specific items. Once the arbitrator made a decision on overlap, and LYTEL agreed to remove it from its process, AT&T would be allowed access to the facility to monitor compliance and look for violations. In addition, LYTEL had to agree not to solicit any AT&T employees during the period of arbitration and could hire only if it were directly approached. Two years of intense effort, and a half million dollars of LYTEL's initial capital expended in legal fees, resulted in a finding of no overlap. LYTEL suffered an extreme setback from which it has not yet completely recovered, although the company is now making good progress. It is now a wholly owned division of AMP. All but one of the original group are gone. Retrospectively, it is fairly clear that LYTEL's entry into the market was delayed. That delay was destructive because a crucial market window was lost. LYTEL's ability to hire key employees was severely compromised. As I see it, the freedom of choice of AT&T's own employees was compromised by fear of the consequences of joining LYTEL. This fear was exacerbated by internal documents distributed to AT&T employees describing the situation with LYTEL. As I see it, AT&T's strategy was consistent with allowable legal practice and accomplished its purpose. In my view, however, although its position was defensible, it was not on the high ground. Given the current state of legal practice in this area, LYTEL made a major error in informing AT&T of its plans, thus allowing AT&T to act before LYTEL's funding was completed. With funding in place, LYTEL would have had a stronger negotiating position and might not have been forced to accede to an onerous agreement. It seems unlikely that AT&T would have been willing to test the idea of inevitable use of its proprietary information in court, and in my view, if it had come to litigation, AT&T probably would have lost. The ability to force a small company into an agreement that adversely affects its fortunes by virtue of its inability to sustain litigation is a severe deterrent to the ability of individuals to leave their employment and engage in entrepreneurial activities. It is also a deterrent to joining another company to work in the same area. Legislation to restore some balance by increasing the risk and burden of proof for larger companies in such cases would greatly enhance the willingness of individuals to engage in entrepreneurial activity. It would promote diffusion of knowledge by freeing potential job switchers from the fear of unfounded legal action. Most certainly, this would lead to increased jobs and wealth generation for the country, and an enhanced technology base, as it has in the past. RECOMMENDATION ON PROPRIETARY INFORMATION I believe that a simple expedient, if it were legally available, would have avoided the entire problem. It would not have been unfair to AT&T, or

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Global Dimensions of Intellectual Property Rights in Science and Technology compromised its proprietary information, if LYTEL could have obtained simply and quickly an injunction requiring AT&T to wait until LYTEL produced its first product before taking any action. Certainly, violation of AT&T's proprietary information was of little consequence while LYTEL was simply preparing to manufacture and sell. At the point of actual production an arbitration agreement could have been negotiated without duress and means could have been established to protect AT&T. In my view, it would have been a much fairer, more balanced, and less expensive agreement. I believe that if that legal recourse were commonly available, it would eliminate or greatly mitigate the heavy-handed practices of companies who take advantage of their size and the limitations of the legal system to act in restraint of trade or to limit the freedom of choice of individuals earning a livelihood. In any case, it would be desirable to make unlawful any claim of inevitable crime. PROTECTION OF PATENTS: SPECTRA PHYSICS VERSUS COHERENT RADIATION In 1984 I was asked by attorneys of Lyon and Lyon of Los Angeles to serve as an expert witness in a patent interference trial between Spectra Physics and Coherent Radiation, both manufacturers of various kinds of gas lasers. Lyon and Lyon represented Spectra Physics. The interference involved a patent held by Coherent Radiation, who charged that Spectra Physics was using the Coherent Radiation patent in manufacturing a high-power argon ion laser for use at ultraviolet wavelengths. The technology involved the use of a series of metal disks to define the linear gas discharge path in an argon ion laser. The metal disks were more resistant than previous technology to the deleterious effects of a high current discharge, especially sputtering, and effectively carried heat away from the discharge region. The prior technology for visible wavelengths involved the use of quartz and ceramic tubes to define the discharge path, which had limited current capability. The ultraviolet lasers, which represented an important market, required extremely high current to operate, so the metal disk technology was a good solution. Among the other expert witnesses supporting the Spectra Physics effort were former colleagues from Bell Labs and Hughes Aircraft Company, all of whom had worked on the argon ion laser following its discovery in early 1964. The argon ion lasers in question were first demonstrated and described by Ed Labuda and myself of Bell Labs in collaboration with Bill Bridges of Hughes Aircraft Company. Improvements were described later by Ed Labuda and myself. A particular improvement patented by Bell Labs and described in the open literature was the use of metal disks to define the discharge path. After studying the Coherent Radiation patent and the issues of the case I became convinced that the Coherent Radiation patent was invalid. I agreed to serve as an expert witness.

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Global Dimensions of Intellectual Property Rights in Science and Technology The events as I understood them were that Spectra Physics had embarked on the metal disk program following the teachings of the Gordon-Labuda paper. It made some improvements on the original idea but concluded that a new patent was not possible. The development work stalled for reasons not relevant here. One of the individuals involved in the development left Spectra Physics and joined Coherent Radiation, which started a similar program shortly thereafter. Spectra Physics reinstated its program and eventually marketed a new laser family based on the metal disk technology. In the meantime, Coherent Radiation developed an almost identical technology and applied for a patent that later issued. It did not reference the earlier Gordon-Labuda paper or the Bell Labs patent. It also introduced a competing metal disk laser product line. Coherent Radiation then proceeded to claim that Spectra Physics had infringed its patent and sought relief, after failure to reach agreement on a settlement, by bringing suit against Spectra Physics. Eventually, the case was heard in San Jose, California. The jury ruled that the patent claims were invalid, and Spectra Physics was able to move ahead on its commercial offering. In my view, justice was served. However, many millions of dollars were spent as a result of the initial dispute and the litigation that followed. It drained energy and emotion unnecessarily over a period of several years. Both companies have had financial difficulties for other reasons. The trial added an unnecessary burden. In my opinion, all of this would have been avoided if the patent examiner had done a thorough job of researching the patent and technical literature, or if Coherent Radiation had properly referenced the earlier work in its application. RECOMMENDATION ON PATENTS The response of the Patent Office to applications is quite rapid. The office works efficiently, and in my opinion, patent law serves its intended purpose well. In my view, however, patent examination must be raised to a higher standard. The examiners must do a more thorough job of researching past patents and the literature to discover prior art. If mistakes are made, they should be on the side of caution. More thorough examination will certainly limit the number of patents that the office can process, but it will also limit the number of applications. Truly useful patents, rather than patents that can harass and impede, will result. The benefit to commerce is hard to estimate, but it would be significant. SUMMARY Optoelectronics, although not new, is a frontier technology area. It has been a source of commercial vitality worldwide and a significant element in the quality of life. It may be viewed as a strategically important technol-

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Global Dimensions of Intellectual Property Rights in Science and Technology ogy. The United States has made virtually all the key inventions and technology developments. Almost all of the key products and devices, however—including displays, imaging devices, copiers, printers, facsimile terminals, lasers for communications, audio compact discs, optical memories, product scanners for point of sales terminals, and devices for many military applications—are made mainly overseas. It will not be easy to turn this situation around unless investment in R&D and manufacturing in electronics, particularly optoelectronics, is increased. Obviously, there are many options for increasing domestic investment and all must be explored, but one factor we can control is to improve the ability of issued patents to hold up under litigative scrutiny, thus making investment in new products more attractive. Given that protection of proprietary information is important if investments in R&D are to be made and that entrepreneurial activity must also be encouraged, it is important to find the correct balance of IPR law that encourages investment in both large and small companies.