What is a Patty Code?

Parity. The word is Parity. Hopefully it was just misheard.

Yes, it's "parity". The code adds a third bit to make the number of ones either even or odd:

00 -> 100 = 1 one = odd
01 -> 001 = 1 one = odd
10 -> 010 = 1 one = odd
11 -> 111 = 3 ones = odd

00 -> 000 = 0 ones = even
01 -> 101 = 2 ones = even
10 -> 110 = 2 ones = even
11 -> 011 = 2 ones = even