A Patent Dispute : Lawsuit Raises a Hot Issue in Exploding Technology
U.S. patent No. 4,714,989--issued to engineer Roger Billings in 1987 for his “Functionally Structured Distributed Data Processing System"--might not sound like the stuff of a high-stakes court drama. But Billings, 46, a colorful inventor from Independence, Mo., contends that the patent makes him the owner of a prized office computing technologythat should be making him rich but isn’t.
In an effort to remedy that, he has taken software powerhouse Novell Inc. to court, claiming that the Utah company owes him hundreds of millions of dollars for infringing on his patent.
The parties last met Jan. 31 in U.S. District Court in San Francisco, where a judge newly assigned to the case set a trial date of Sept. 19.
More than just a patent dispute mired in technical details, the case has been enlivened by disclosures about Billings’ personal life--his excommunication by the Mormon Church, his espousal of polygamy, his quirky background in the field of hydrogen fuel cells, his founding of an underground (and unaccredited) research institution that granted him his only advanced degrees, and the funding of his case by investors who hope to reap a share of any victory royalties.
“Credibility is an issue,” said Gary Hecker, a Los Angeles patent attorney defending Novell.
Yet Billings holds the patent, and that puts the burden of proof on Novell.
“Novell has made an enormous amount of money,” Billings said in an interview at a small office he keeps in Emeryville, east of San Francisco. “If you’ve made that money selling someone else’s invention, then the inventor deserves a royalty.”
Some observers liken the Billings patent to one recently granted to Compton’s NewMedia Inc., a San Diego County publisher of a popular interactive encyclopedia. Compton’s stunned the technology industry in November by announcing a sweeping multimedia patent that could subject dozens of companies to heavy royalties.
The patent drew protests from many of those firms, which flooded the U.S. Patent and Trademark Office with evidence that technology like Compton’s was in use before the company applied for its patent.
Confronted with this so-called prior art, the office--which critics contend is overburdened and ill-equipped to cope with today’s fast pace of technological innovation--took the unusual step of deciding to review the Compton’s patent. So far, it has not proposed a similar step in the Billings case.
The Billings and Compton’s patents have attained notoriety amid a contentious debate in the industry. At an unusual two-day hearing in January in San Jose, garage inventors, software experts and lawyers sounded off to patent officials. The question comes down to this: Can software be patented as a product for 17 years, or is it an intellectual process that can’t be pinned down in that way?
Adobe Systems Inc. and Oracle Corp. were among a small coterie of companies calling for an abolition of software patents in favor of copyrights, which they contend protect without being as cumbersome. Patent proponents include International Business Machines Corp. and Microsoft Corp.
Many software executives worry about the potential cost of individual patents that surface years after companies have embraced a given technology.
“We have these situations with individual inventors where by the time the patents issue, an industry has been built up,” said Robert Barr, a patent lawyer in San Francisco.
Indeed, Billings contends that potentially hundreds of companies owe him royalties.
For its part, Novell is “supportive of the concept that patents can be granted if the process is truly unique,” said David R. Bradford, senior vice president and general counsel of the Provo-based company.
In the Billings case, however, Novell maintains not only that its products do not infringe on Billings’ patent but also that the document is invalid and that he obtained it fraudulently by failing to inform the patent office about prior art. Novell says Xerox and Datapoint, among others, were using such technology before Billings filed his application.
Billings, one of six children from a fifth-generation Mormon family in Provo, took to science as a boy, thanks to a grandmother who bought him chemistry sets and telescopes. By the third grade, he knew he wanted to be a scientist.
As a teen-ager, he developed an interest in alternative fuels and won an international science fair by converting his dad’s Model A pickup truck to run--if roughly--on hydrogen. The prize was a scholarship to Brigham Young University, which he attended briefly before embarking on a two-year Mormon mission to Brazil.
Upon returning, he took a hodgepodge of courses that did not qualify him for a degree. Years later, he completed a chemical engineering degree through correspondence courses.
His research drew the interest of William Lear of Learjet, who briefly became a mentor. Although Billings has worked for years on developing hydrogen-powered vehicles, nothing has ever come to commercial production.
In 1976, as Billings tells it, he had a computing brainstorm. It was an idea that would allow a group of desktop computers to retrieve information from one or more “data centers” capable of storing massive amounts of information. The system would eliminate the need for large, expensive mainframes. Indeed, a similar technology--known today as “client-server computing"--is sweeping through corporate America.
“I became very excited sitting there all by myself,” he recalled. He said he and his patent attorney used to joke that “this is the patent that’s going to generate more royalties than Alexander Graham Bell’s phone patent.”
Years of development later, in early 1982, Billings applied for a patent. The application was rejected and revised a few times, but in 1987 a patent was awarded.
Although he does not use the terminology in his patent, Billings said the document in effect makes him the “father of client-server computing.” That technology is fast replacing the system of huge mainframe computers and “dumb” desktop terminals that have made up office systems for years. As such, Billings argues, it mimics his technology.
One of the companies benefiting from this shift is Novell, the king of networking software that enables desktop PCs to communicate with each other and share data and computer equipment. In December, 1991, Billings sued Novell, seeking tripled royalties of $672 million. Since then, Billings said, sales of the Novell product have pushed that figure to perhaps $900 million.
(Calling the case a nuisance suit, another defendant, BankAmerica Corp. of San Francisco, settled with Billings in November for $125,000. The banking company said it wanted to avoid a costly court battle.)
Billings maintains that, at a computer show in the early 1980s, he explained his technology to some scientists who were later hired by Novell. Soon after, he said, Novell introduced NetWare, a networking software product that now holds an estimated 70% of its market.
Throughout the case, Novell has raised questions about a nonprofit graduate school called the International Academy of Science, which Billings founded in Independence. The unaccredited school, housed in an underground facility, granted Billings his only advanced degrees. He refers to himself as Dr. Billings.
Billings, an earnest man with gray-blond hair and a closely cropped beard, has said that he wrote a pamphlet titled “The True Dream of Zion,” written to explain to friends his 1985 break from the church and his move to Independence, an action he says was guided by God to get him to the city where, some Mormons believe, Christ will one day return.
In the pamphlet, he endorses polygamy and criticizes the Mormon Church for abandoning the practice.
Hecker, Novell’s attorney, said Billings’ religious convictions are not an issue in the case. But as for the school: “It is the position of Novell that what he purports to be a school of higher education is not,” Hecker said. The company has also criticized Billings’ use of funds from investors hoping for a share in any royalties. Billings acknowledged that such investors exist, but he declined to discuss the matter further.
Billings defends the school, where students conduct research and pursue independent projects. And why is it underground, a feature that Novell likes to ridicule? Billings notes that the area has numerous such underground facilities--many of them in former mines--that are routinely used for manufacturing, storage and office space.
As a scientist, Billings gets mixed reviews. Advocates and critics alike agree that he is unconventional; he does not have his inventions reviewed by peers or publish articles in established journals.
But the board of his academy includes some respected scientists. One of them is David S. Scott, director of the Institute for Integrated Energy Systems at the University of Victoria in British Columbia. He acknowledges that Billings is “hard to pin down.”
“Roger is malignable not because he’s evil or wrong; it’s just because he’s different,” Scott said. “He doesn’t follow a template. He’s kind of his own man.”
Novell Inc. at a Glance
Founded in 1983, Novell is the leader in so-called networking software, which enables groups of desktop computers to work with one another and with mid-size and mainframe computer systems. The fourth-largest software company in the world, it also develops information system software, network services and products to help software programmers. Its chief products are NetWare, UnixWare and AppWare.
* Headquarters: Provo, Utah
* Management: Ray Noorda, longtime chairman and chief executive, shares an office of the president with Mary M. Burnside, chief operating officer, and James R. Tolonen, chief administrative officer.
* Employees: 4,429 worldwide as of November, 1993
* Operations: Major software development sites in Utah, California, New Jersey, Texas and the United Kingdom; 33 regional offices in the United States; 17 subsidiaries outside the United States.
* Net sales: $1.1 billion in fiscal 1993.
* Net income: $282 million in 1993.
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