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Updated 5/29/98

Volume 4 - Number 2 -- Winter 1995

[Rumors ] [Decipherings] [Editorial] [SystemView] [Optimum Sync] ["Invention Developers"] ["Technology Venture"]
[Part 2]

Part 1
SSS is proud to bring you our very first online issue!

RUMORS & RAMBLINGS

• Sonnet Software, Inc., Liverpool, NY recently announced the introduction of "Micro-Stripes" for Electromagnetic Analysis of Three-Dimensional Structures. "Micro-Stripes" uses HP-EEsof Touchstone format in a highly efficient 3D EM Simulator -- version 2.3 starts near $30K. For more information contact: Sonnet Software, Inc. at +1 315-453-3096.
  
  
• Well Bill Gates and Microsoft did it again! They just announced that they are buying out Vermeer Technologies, Inc., whose main software product is "FrontPage." FrontPage is a leading WWW HTML "text" editor with "Web Wizards" that simplify graphical tasks. FrontPage used to cost $495 and was available for Windows 3.1, Windows NT and Windows 95. So now we wait to see what they do with it . . .
  
  
• RadioLAN hits a dead short! Another near casualty in the race to be "first" with new Wireless technologies, RadioLAN could not make their "Narrowband FSK" FCC Part 15.249 PCMCIA 10 Mbps wireless LAN adaptor play through normal office interference at customer expected distances. The Silicon Valley company laid off most of their technical staff and is still re-grouping.
  
  
• Omnipoint, Colorado Springs, Colorado, signed a $300M pact with LM Ericsson for PCS 1900 handsets, meeting IS-661 (the TDMA/FDMA hybrid SS technology) which is based on Omnipoint's New York City GSM interfaced PCS service. Remember our good friend Bob Dixon -- he founded Omnipoint and is now their Chief Technical Officer. Good Luck guys!
  
  
• The Bay Area Multimedia Technology Alliance (aka BAMTA) opened their doors recently. BAMTA is a new industry-government coalition with 49 industrial partners and NASA Ames behind them. They promise "great things" -- I'll just wait and see . . .
  
  

Editorial

Well it finally happened -- we got out another issue! Bet you waited, with baited breath, quite a while! This issue is very different from our past issues -- not just because it's online, however. It is different because it had to be different, if SSS is to survive! We have eliminated the time, expense and troubles with a paper based publication now, so we can and hopefully will improve our content, frequency and breadth of coverage. It almost seems like fun to be virtually preparing this issue online! I hope you will find our new format, style and "look and feel" to be as good or better than our old printed format. Please let me know by email what you think, GOOD or BAD!

We missed our Summer 1995 printed issue -- sorry about that! But, we had already started the transition to this "paperless" medium. I'm sure we will make some people mad with this decision to eliminate "paper, printing and Post Office." If you are a paid up subscriber and want to vent your anger -- just email us and ask for a refund! We promise to be fair and kind -- we will make every attempt at soothing your ravished nerves!

Some background that caused us to go away from a "paper" publication: Starting early last summer new subscriptions and renewals started to drop off very rapidly. This was summer vacation time, right? Well, they never did come back! In the last three months we have had less than 10 new subs or renewals -- what happened? Well, of course, we had gotten very busy -- missed the Summer issue -- on top of that, several other magazines have been covering Wireless and SS, pretty well, too! So all in all, competition, your interest (or lack thereof) and our workload killed the "paper" version of SSS!

As a final result, I hope this new format catches on -- it is less work and expense for us and, hopefully more convenient for MOST of you -- enjoy and see you next time . . . same time, same channel, (same code)!

Elanix SystemView Product Review

A Screen Capture From an Actual Run of SystemView on a PC.

New SystemView RF/Analog Library Provides Advanced RF Component Models for Windows Users

ELANIX, Inc. recently introduced a powerful new optional library for RF/Analog applications. We at RF/SS have been using these add-ons for SystemView for about three months now and have found this version of the program and the complete libraries to be an excellant set of S/W Tools for the Wireless Designer.

The SystemView RF/Analog Library, the latest addition to the add-on SystemView Libraries, supports the important electronic components used in today's RF designs and completes the initial suite of SystemView Libraries.

For the first time, SystemView users will be able to incorporate actual analog circuits and components into their system simulations. For example, RF mixers and amplifiers actually create the spurious frequency components that engineers will encounter during final hardware development. Higlights of SystemView are:

SystemView by ELANIX Features

• True dynamic system simulator.
• Intuitive sampled data (z-domain) and continuous (Laplace domain) system specification.
• Multi-rate systems, multiple parallel systems.
• Mixed time-continuous and time-discrete systems.
• Graphical FIR filter design, including lowpass, bandpass, highpass, band-reject, Hilbert (90 degree phase shift), and differentiators.
• Extensive library of IIR filters including multi-pole Bessel, Butterworth, Chebyshev, and Linear Phase.
• FFT types: magnitude, squared magnitude, spectrum analyzer (mWatts in 50 ohms), spectrum analyzer (Watts in ohms), power spectral density (mW/Hz, 50 ohms), power spectral density (W/Hz, 1 ohm), phase (modulo +- 180 degrees), phase (unwrapped) in degrees, group delay in seconds, real, imaginary.
• Unlimited support for embedded, multi-level subsystems.
• Full complement of logic functions, switches, and non-linear devices.
• Complete libraries of Sources, Sinks, Functions, Operators, and MetaSystems.
• External and internal signal sources and sinks.
• Built-in system diagnostics and connection checks.

SystemView by ELANIX Applications

• Signal processing, communication, and control systems, including analog, digital, and mixed mode systems.
• Phase and frequency locked loops.
• Modulation, demodulation, and channel modeling.
• Complete DSP system design and test.
• Analog to digital conversion systems, quantization, and sampling systems, including delta-sigma data converters. In- phase and quadrature systems.
• Linear and non-linear system design and test.
• Solutions to linear and non-linear differential equations, including Chaos theory.
• Control system design and test.

Integrated System Flexibility

SystemView by ELANIX fully supports multi-rate systems, parallel simultaneous systems, and internal or external data sources and sinks. More complex systems may use SystemView by ELANIX's powerful new MetaSystem object, which provides unlimited creation, editing and interconnection of embedded subsystems.

Innovative Filter and Linear System Design

SystemView by ELANIX also provides a new approach to analog-digital filter design, discrete time linear system design, and continuous time Laplace linear system design. These systems are designed using SystemView by ELANIX's innovative and efficient graphical templates. Results of the initial design and any subsequent modifications are automatically computed by SystemView by ELANIX, incorporated into the simulation, and graphically displayed in the time, frequency, or phase domain.

Interactive Signal Analysis and Display

Beyond system design and simulation, SystemView by ELANIX also provides a truly interactive Analysis window for the detailed examination of system waveforms. Zoom, scroll, spectral analysis, scaling, filtering and much more, are only a mouse-click away

Intuitive and Powerful

SystemView by ELANIX is a completely intuitive personal simulation tool that presents a comfortable visual interface to the user. The power of SystemView by ELANIX lies not only in its simulation engine, but also in the remarkably quick way in which truly complex systems may be created and tested. SystemView by ELANIX is the preferred personal simulation tool for scientists, engineers, physicists, and mathematicians seeking significant increases in design productivity.

Optional Libraries

The SystemView by ELANIX environment includes a suite of optional libraries that enhance the function library with powerful additional functions for specific application areas. Current options include libraries of Communications, DSP, Logic and RF/Analog functions, as well as a user-definable extensible token library. These optional libraries allow users to affordably tailor their SystemView by ELANIX installation by choosing only those additional functions that they require.

This library includes such models as fixed and variable amplifiers, operational amplifier circuits (op-amps) double balanced mixers, several power splitter and power combiner types, couplers, diodes (including Zener diodes), resistor-capacitor differentiators, resistor-inductors, low-pass and high-pass RC and L-C filters, PLL filters, LC tank and quadrature circuits, coupled resonator pairs, and more.

"The SystemView RF/Analog library was developed by our engineers and scientists with the goal of providing accurate and useful models of the circuits and components commonly used in today's advanced RF and analog designs," said Geoff Chatfield, Director of Marketing. "With a single mouse click, designers can analyze the Bode (Gain and Phase) and Root Locus plots for their circuit designs. System designers now have access to sophisticated component models on the affordable, user friendly PC/Windows platform."

SystemView by ELANIX is the preferred Microsoft Windows-based alternative to high-priced workstation simulation tools. This dynamic system simulator running on i386 and higher IBM-compatible PCS with 4 MB RAM and 3 MB hard disk space features comprehensive tools for analog, digital, and mixed-mode design and analysis in a user-friendly visual design environment. Applications range from DSP, communications, signal processing, and control to general mathematical system modeling. SystemView Illy supports mixed mode (i.e. analog and digital) multi-rate systems, parallel simultaneous systems, and internal or external data sources and sinks. More complex systems may use SystemView's powerful MetaSystem object, which provides unlimited creation, editing, and interconnection of embedded subsystems, as well as continuous refinement of the system performance model.

SystemView also provides a new approach to analog-digital filter design, discrete time linear system design, and continuous-time Laplace linear system design. Users specify these systems using innovative and efficient graphical templates. Results of the initial design and any subsequent modifications are automatically computed by SystemView, incorporated into the simulation, and graphically displayed in the time, frequency, or phase domain.

SystemView version 1.8 is available now for $2450. Optional Communications, DSP, Logic, and RF libraries are available starting at $525.

ELANIX, Inc. develops advanced hardware and software signal processing and communications systems for defense and commercial markets. ELANIX introduced SystemView, its Microsoft Windows based design and development engineering software in 1993. ELANIX also designed and developed the Xmath Signal Analysis Module, a major signal processing software CAE system running under UNIX and other operating systems.

SSS and RF/SS think that SystemView is one of the finest system modelling and block diagram simulation tools available today. Be sure to visit their WWW home page (try our hot link by pressing the "Favorite Cross Links" button), register and then download their evaluation S/W package. Try it -- I'm sure you will like it!

Reprint Synopsis: "Optimum Code Patterns For PCM Synchronization"

Telemetry systems utilizing Pulse Code modulation for transmission require sync information intermixed with the data for reconstruction of the channel structure during data collection The proper recognition and utilization of the sync information become a complex problem, where errors appear in the received information as a result of noise in the r-f transmission link.

The usual procedure for inserting sync information is to place a repetitive pattern of preselected polarity bits, which form a sync word, at fixed intervals in the transmitted signal. Nearly all present PCM systems utilize small patterns placed between each sample or word as the primary form of digital sync. Utilization of word sync, however, requires that additional secondary sync information be placed once per frame to define the beginning of the cycle of samples.

A recent study by the author [1] indicated that if the primary digital sync patterns are lengthened and spaced farther apart, increased speed of sync detection can be realized with a smaller percentage of the total transmitted bits devoted to sync, and with no degrading of the reliability of maintaining sync in the presence of noise.

One of the assumptions made in arriving at these conclusions is that the probability of the preselected pattern of sync bits occurring in any group of consecutive bits, other than the group made up of the complete set of true sync bits, is (0.5)^n, where n is the number of bits in the pattern. This assumes that the occurrence of "1" and "0" bits in the data can be considered random, and equally likely. However, the assumption was extended to also include groups of consecutive bits which contain part of the group of true sync bits, and part data bits adjacent to the true sync pattern.

With the assumption that all groups of data bits are random, the length of the sync pattern is the only factor affecting the probability-of-occurrence of the pattern in a group of all data bits. With the assumption that errors produced by noise in detection of each individual bit received are random, the length of the sync pattern and the number of errors allowed in detection of the pattern are the only factors affecting the probability of finding the correct pattern in its true location.

The first objective of this study is to point out the problems associated with the detection of apparent sync patterns made up partly of random bits and partly of bits in the true sync pattern. The second objective is to define characteristics of patterns which minimize this problem. Finally, the choice of secondary sync patterns is discussed.

Contributions: Curt Harrington's Latest Insights to the Legal World of High Technology Intellectual Property

Further complicating attempts at regulation, these shady companies advertise and attract inventors nationwide, and do all of their business with the inventor through the mail. In many cases inventors submit information and pay a fee of several thousand dollars, only to have the development company make a few copies of the disclosure and it out to the companies by mail.

Most reputable companies hire a non-technical person to screen such submissions, and promptly mail them back to the source along with a form for re-submission which waives the rights of the inventor. As a result, the "developer" receives money for doing a useless thing, if the developer even goes to the trouble of mailing out the information to begin with. Even when the developer often knows that no patent has been applied for no steps are taken to insure that the companies receiving the information will not take it for their own use.

All of this could change with the passage of a new federal law to protect unwary inventors. The bill has been introduced in the senate as S.909 and in the house as H.R. 2419 and is entitled "The Inventor Protection Act of 1995."

It relies not only upon mandatory disclosure requirements but also adds an enrollment scheme for developers, a 5 day waiting period within which inventors can void a development contracts, and a new civil liability section which makes it relatively easy for inventors, termed by the new law as "customers," who have been taken advantage of to collect both damages and attorney fees.

The enrollment scheme provides for registration of invention developers with the Commissioner of Patents & Trademarks. Any contract with an unenrolled invention developer is voidable by the customer. A developer would be suspended from enrollment if found to be incompetent, disreputable, liable for gross misconduct, or for non-compliance with the disclosure portions of the statute.

The disclosure provisions require the developer to state, in large type, several facts including their batting average for the past 5 years in terms of the numbers of positive and negative evaluations of submitted invention ideas. Even more damaging, the developer must also state the total number of customers who have contracted with the developer in the past five years, and the number of such customers who have received an amount of money in excess of the monies paid to the developer. If requested, the developer must provide the names and addresses of such "winning" customers to any person.

A 5 business day waiting period begins when the customer receives a copy of the contract for invention development services signed by both the invention developer and the customer. Before expiration of the 5 day period, the customer has the option to refuse to enter into the contract, and no payment which has been previously given by the customer shall be treated as required, accepted, or received. Where payment is made by check, it will be considered received on the date when it is given irrespective of its date, so post dating checks will not help the developer.

The new civil liability portion of the statute places severe and easily obtainable penalties against developers. Any customer injured by the developer, or injured by any false or fraudulent statement, representation or omission of material fact by the developer's employees, agents, directors, officers, partners or independent contractors, can bring suit for damages, attorney fees, and costs. Damages will be the greater of $5000 or the actual amount of damages suffered. With a minimum of $5000 damages presumed upon a finding of liability, it will be easier to encourage an attorney to take the case. This harsh statute is sorely needed to correct the abuses inflicted by inventor "help" companies who do little or nothing for the relatively large amounts of money they receive from inventors.

Favorable tax treatment for the creation and development of technology can be allocated to more than one business entity so long as each business entity has a reasonable expectation of entering into an ongoing business relating to exploitation of the technology.

The favorable tax treatment for the creation and development of technology is .174 of the Internal Revenue Code. .174 permits a taxpayer to deduct expenses which are paid or incurred during the taxable year in connection with a trade or business. .174's term "in connection with" is a deliberately less stringent connection to the requirement of an ongoing business concern, the standard required before the introduction of .174.

The right to deduct research and development expenditures is even more critical to new technology ventures since the deductions do not have to be recaptured if the technology is later sold. For example, if a developer of technology expends $500,000 in research activities, this whole amount can be deducted as ordinary income in the year in which the funds were expended. If the technology is later sold for $1,000,000 dollars by a holder of the technology, and assuming that the basis in the technology is zero, capital gains treatment will be given to the sales price. The current capital gains rate is 28%. To illustrate the recapture case for contrast, the first $500,000 would have been taxed at the ordinary income rate, and only the remaining $500,000 would be taxed at the lower capital gains rate.

In order to be able to expense the research and development expenditures among business entities, each business entity must have a "realistic prospect" of subsequently entering its own business in connection with the fruits of the research, if the research is successful. The recent case of Scoggins v. Commissioner 95-1 ustc 50,061; 46 F3D 950 (9th Cir) illustrates a typical, successful structuring. However, as this case also illustrates, it is not unusual for the IRS to challenge, and the Tax Court to uphold a denial of the deductibility of research and development expenditures, even where properly structured.

Before describing the structuring of Scoggins, be aware that the deductibility of research and development expenditures was denied in the case of Green v. Commissioner, 83 T.C. 667 (1984) which held that "where a limited partnership functioned only as a vehicle for injecting risk capital into the development and commercialization of inventions." Thus, the entity which seeks to claim a deduction should be one which is set up to have a chance to enter the regular business which relates to the technology development, rather than a business entity whose only function is to inject investment and collect profits.

In Scoggins, the inventors formed a partnership to hold rights in the technology, and to pay for the research. The inventors also formed a corporation, in which they held a 75% interest, which was paid by the partnership to perform the research. At issue in Scoggins is whether the partnership could take a deduction for the research expenditures which it paid to the corporation.

Further, the relationship between the partnership and the corporation included the grant of a non-exclusive license from the partnership to the corporation to market the technology for a 15 month period, and the grant to the corporation of an option to acquire the technology outright for $5 million. Although the Scoggins case considers only deductions of the partnership, it is clear that under the above circumstances that both the corporation and the partnership each have a realistic prospect of exploiting the technology in a business of its own.

Further, by utilizing a partnership to hold the technology, the individual partners have insured that they may qualify as "holders" of the technology and therefore eligible for capital gains treatment under .1235 of the Internal Revenue Code, if a sale of the technology is made. A "holder" is an individual who either created the intellectual property or acquired an interest before the invention physically constructed or carried out such that there is reasonable certainty that the invention will perform its intended function.

In conclusion, and in order to make use of the tax advantages afforded research and development, each entity should manifest both the objective intent to enter, as well as the capability to enter a business related to the research and development .

CURTIS L. HARRINGTON, is of Counsel to the Newport Beach law firm of Hawes & Fischer (714)374-9549 and practices in the areas of Patent, Trademark, Copyright and Trade Secret law, and is an Adjunct Professor at the University of Phoenix in Southern California. He is admitted to practice before the state bars of California, Texas, and Arizona, and admitted to practice before the U.S. District Court, the U.S. Court of Appeals, Fifth and Ninth Circuits, the U.S. Supreme Court and registered to practice before the U.S. Patent and Trademark Office. His education includes a B.S. Chemistry (Auburn University, 1974); M.S. Chemical Engineering (Georgia Institute of Technology, 1977); M.S. Electrical Engineering (California State University - Long Beach, 1990); a Master of Business Administration (University of Oklahoma, 1985); and Juris Doctorate (University of Houston, 1983). He is a member of the Long Beach Bar Association Board of Governors, the Orange County Bar Association and the Japan America Society of Southern California.

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