2/10. On February 11, the House Majority Leader withdrew from the House calendar consideration of HR 1561, the "United States Patent and Trademark Fee Modernization Act of 2003". This bill, as reported by the House Judiciary Committee, would raise patent and trademark fees, implement the fee related provisions of the U.S. Patent and Trademark Office's (USPTO) 21st Century Strategic Plan, and end the practice of diverting USPTO user fees to subsidize other government programs.

Rep. Lamar Smith (R-TX) and Rep. Howard Berman (D-CA), the Chairman and ranking Democrat on the House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property (CIIP), are sponsors of the bill.

The House had previously been scheduled to consider HR 1561, pursuant to a rule, on February 11.

On February 10, representatives of the Judiciary Committee, which has long opposed the diversion of USPTO fees, and representatives of the House Appropriation Committee, which has long passed appropriations bills that divert USPTO fees, reached an agreement regarding compromise language pertaining to the diversion of fees. However, there remain controversial issues regarding other provisions of the bill.

TLJ has not obtained the draft language implementing this compromise regarding fee diversion. However, Congressional staff have described it, on condition that their statements not be attributed to them. "This agreement would prevent the appropriators from diverting" USPTO user fees. However, it would "let them determine the PTO budget". Then, if the fees collected by the USPTO exceed the budget set by the appropriators, the difference "would be rebated to USPTO users", rather diverted to other government programs.

Currently, funding for the USPTO is set by bills reported by the House and Senate Appropriations Committees. The appropriation is less than the amount of fees collected, with the remainder being used to subsidize other government programs. Some intellectual property owners, groups that represent them, and technophiles in the Congress, oppose the process of fee diversion. Some have called it a tax on innovation.

HR 1561, as reported by the House Judiciary Committee, would amend 35 U.S.C. § 42 pertaining to "Patent and Trademark Office funding". It would amend this section to read as follows: "Fees authorized in this title or any other Act to be charged or established by the Director shall be collected by the Director and shall be available until expended to carry out the activities of the Patent and Trademark Office. All fees available to the Director under section 31 of the Trademark Act of 1946 shall be used only for the processing of trademark registrations and for other activities, services, and materials relating to trademarks and to cover a proportionate share of the administrative costs of the Patent and Trademark Office."

This language would essentially take the USPTO off budget. The compromise agreement, reached on February 10, would keep the USPTO on budget, but deprive the Appropriations Committees of the ability to essentially tax innovators to fund other programs.

The House is in recess next week. Congressional staff predict that HR 1561 will come up for consideration the week after next week. Moreover, it would likely be considered under a rule, rather than under suspension of the rules.

While the fee diversion issue has been addressed, there remain other sources of opposition to the bill as reported by the Judiciary Committee. For example, Rep. Don Manzullo (R-IL), the Chairman of the House Small Business Committee, is concerned about raising user fees for small businesses.

Also, Rep. Marcy Kaptur (D-OH) and Rep. Duncan Hunter (R-CA) have raised the issue of outsourcing of patent searches.

James Rogan, the previous head of the USPTO, testified before the CIIP on April 3, 2003 regarding the USPTO's 21st Century Strategic Plan. He wrote in his prepared testimony that "By outsourcing the search function, we can ensure that the patent examiners of tomorrow will be like the quality review examiners of yesterday in that they will begin with a more complete search and set of information as their starting point. To that end, we will be diligent in selecting and monitoring the contract or foreign searching authorities to ensure that patent searches provided by them are of the highest quality."

Rep. Kaptur and Rep. circulated a letter addressed "Dear colleague" that states that the provision of HR 1561 ending fee diversion "would remove the agency from Congressional oversight. Neither the House nor Senate Appropriations Committees would have oversight. The agency would be free to do whatever it wants."

The House and Senate Judiciary Committees would continue their oversight. But then, Rep. Kaptur sits on the Appropriations Committee, not the Judiciary Committee.

Next, Rep. Kaptur and Rep. Hunter argue in their letter that HR 1561 "proposes to separate the search and examination components of the patent application process to allow outsourcing of searches to private persons or groups -- even overseas." Rep. Kaptur is one of the leading protectionists in the House.

The letter of Rep. Kaptur and Rep. Hunter does not go into detail about the outsourcing of patent searches. However, Ronald Stern, President of the Patent Office Professionals Association (POPA), which opposes the outsourcing of patent searching, addressed this issue in his prepared testimony for the House Judiciary Committee's Subcommittee on CIIP Subcommittee on April 4, 2003.

This is not the first time that Rep. Kaptur and Rep. Hunter have been at the center of a debate over patent legislation. Rep. Kaptur was an opponent of provisions in patent reform legislation that would provide a first to invent, or prior use, defense to patent infringement. Technophiles, like former Silicon Valley Rep. Tom Campbell (R-CA) also opposed a first to invent defense, on the grounds that disclosure of inventions is one of the fundamental goals of the patent laws, but this exception gives inventors an incentive not to disclose.

However, Rep. Kaptur opposed the first to invent defense for protectionist reasons. It was an odd coalition of opposition. The key vote in the House was held on an amendment to HR 400 in the 105th Congress on April 23, 1997. It would have limited the prior use defense. See, Roll Call No. 86. Later, the 106th Congress passed the American Inventors' Protection Act (AIPA) with compromise language on this issue.

It may also be significant that back in 1997, when the House was considering HR 400, the predecessor to the AIPA, Rep. Hunter offered an amendment that would have required that all patent examination and search duties shall be performed within the US by US citizens who are employees of the US government. It failed by a vote of 133-280. See, Roll Call No. 89. On the other hand, some Representatives may view the issue of outsourcing today differently than they did in back in 1997.

Rep. Kaptur addressed outsourcing, but not in the context of the USPTO, in other recent statements. See, Congressional Record, February 10, 2004, at Page H416, and February 11, 2004, at Page H494.

See also, related stories: "House CIIP Subcommittee Holds Hearing on USPTO Fees" in TLJ Daily E-Mail Alert No. 637, April 4, 2003; "House Intellectual Property Caucus Advocates Ending USPTO Fee Diversion" in TLJ Daily E-Mail Alert No. 762, October 21, 2003; and "House to Vote on Bill to End USPTO Fee Diversion" in TLJ Daily E-Mail Alert No. 832, February 9, 2004.

2/11. Federal Reserve Board Chairman Alan Greenspan testified before the House Financial Services Committee regarding the Federal Reserve's Monetary Policy Report to the Congress.

Spending on Technology. Greenspan (at right) stated that "A strengthening in capital spending over 2003 contributed importantly to the acceleration of real output. In the first quarter of the year, business fixed investment extended the downtrend that began in early 2001. Capital spending, however, ramped up considerably over the final three quarters of 2003, reflecting a pickup in expenditures for equipment and software. Outlays for high-tech equipment showed particular vigor last year. Even spending on communications equipment, which had been quite soft in the previous two years, accelerated." See, prepared testimony.

The Monetary Policy Report (MPR) elaborates that "Outlays for high-technology items -- computers and peripherals, software, and communications equipment -- which had risen a moderate 4-1/2 percent in 2002, posted a significantly more robust increase of more than 20 percent in 2003. That gain contributed importantly to the pickup in overall business outlays for equipment and software and pushed the level of real high-tech outlays above the previous peak at the end of 2000. The increase in spending last year on computing equipment marked the sharpest gain since 1998, and investment in communications equipment, which had continued to contract in 2002 after having plummeted a year earlier, turned up markedly."

Technology Based Productivity Gains. Greenspan said that "The productivity performance of the past few years has been particularly striking in that these increases occurred in a period of relatively sluggish output growth. The vigorous advance in efficiency represents a notable extension of the pickup that started around the mid-1990s. Apparently, businesses are still reaping the benefits of the marked acceleration in technology."

The MPR adds that "Prospects for sustained high rates of increase in productivity are quite favorable. Businesses are likely to retain their focus on controlling costs and boosting efficiency by making organizational improvements and exploiting investments in new equipment."

Tech Stocks. Greenspan also referenced the performance of tech stocks. "Broad measures of equity prices rose 25 percent in 2003, and technology stocks increased twice as quickly. The rally has extended into this year."

The MPR states that "For the year as a whole, the Russell 2000 index of small-cap stocks and the technology-laden Nasdaq composite index, which rose 45 percent and 50 percent, respectively, noticeably outpaced broader indexes. To date in 2004, equity markets have continued to rally."

Trade. The MPR states that "Exports of goods rose about 6-3/4 percent over the course of the year -- considerably faster than in 2002. Exports increased in all major end-use categories of trade, with particularly strong gains in capital goods and consumer goods. Reflecting the global recovery in the high-tech sector, exports of computers and semiconductors picked up markedly in 2003, particularly in the second half."

2/11. The Senate Commerce Committee held a hearing titled "Protecting Children from Violent and Indecent Programming".

Sen. John McCain (R-AZ), the Chairman of the Committee, wrote in his opening statement that "This discussion should remind us that broadcasters have been given spectrum -- for free. As Americans who own that spectrum, we have every right to expect something in return. We call it the public interest. We expect broadcasters to make the best use of that spectrum by providing news and information about our society and political campaigns, children’s programming, and even, entertainment."

Sen. McCain also raised the subject of indecent content on cable and direct broadcast satellite television. He noted that if Congress were to require cable and DBS operators to offer a la carte programming, parents would be better able to protect their children from programming that they find offensive.

See also, prepared testimony [PDF] of Federal Communications Commission (FCC) Chairman Michael Powell, prepared testimony of FCC Commissioner Kathleen Abernathy, prepared testimony of FCC Commissioner Jonathan Adelstein, and prepared testimony of FCC Commissioner Kevin Martin.

2/6. The California Court of Appeal (6th) issued its opinion [MS Word] in Abramson v. Juniper Networks, a case regarding the enforceability of an arbitration clause in an employment contract between Juniper Networks and an employee, when that employee subsequently filed a complaint in state court alleging wrongful termination, breach of contract, and other claims. The Court of Appeal held the arbitration clause unenforceable. This case is David Abramson v. Juniper Networks, Inc., California Court of Appeal, Sixth Appellate District, No. H025840, an appeal from the Santa Clara County Superior Court, No. CV788020.

2/10. Microsoft and Disney announced "a multiyear agreement to cooperate on" digital rights management (DRM) technology utilizing Microsoft Windows operating system and Microsoft Windows Media. Microsoft stated in a release that "Disney and Microsoft have identified three areas of joint focus that utilize effective rights management:
 • The creation and secure delivery of compelling high-resolution digital content
 • The overall acceleration of digital content flow to consumers -- over networks, on optical media and on devices
 • Ensuring the seamless flow of secure content between devices, whether in the home or on portable devices".

2/3. Federal Communications Commission (FCC) Chairman Michael Powell gave a speech [7 pages in PDF] regarding telecommunications in Indian country, and the Memorandum of Understanding [5 pages in PDF] between the FCC and the United South and Eastern Tribes, Inc. regarding tower citing.

2/10. Sen. Charles Grassley (R-IA) and others introduced S 2062, a bill to amend the procedures that apply to consideration of interstate class action lawsuits.

TIME CHANGE. 11:00 AM. The Federal Communications Commission (FCC) will hold a meeting. The event will be webcast. See, revised agenda with notice of time change [PDF]. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

The House will meet at 10:00 AM. See, Republican Whip notice.

Lincoln's Birthday.

7:45 - 9:00 AM. National Emergency Management Association's (NEMA) conference titled "Assessing & Protecting the Nation's Critical Infrastructure" will include at series of speeches titled "Session on Emergency Management And Homeland Security Issues". Rep. Chris Cox (R-CA), the Chairman of the House Homeland Security Committee (HHSC), will speak at 7:45 AM. Rep. Jim Turner (D-TX), the ranking Democrat on the HHSC, will speak at 8:05 AM. Jim Morhard, Majority Staff Director of the Senate Appropriations Committee, will speak at 8:30 AM. Location: Capitol Hilton Hotel, Presidential Ballroom, 16th & K Streets NW.

8:30 AM - 5:45 PM. Day one of a two day conference hosted by the National Telecommunications and Information Administration (NTIA) titled "Forum on Spectrum Management Policy Reform". See, agenda [PDF]. To register, contact Margaret Huynh at mhuynh@nas.edu. Location: Lecture Room, National Academy of Sciences Building, 2100 C Street, NW.

9:00 AM. The House Ways and Means Committee's Subcommittee on Oversight will hold a hearing on "IRS Efforts to Modernize its Computer Systems". See, notice. Location: Room 1100, Longworth Building.

9:30 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will meet to mark up HR 3717, the "Broadcast Decency Enforcement Act of 2004". The event will be webcast. See, notice. Press contact: Ken Johnson or Jon Tripp at 202 225-5735. Location: Room 2123, Rayburn Building.

TIME CHANGE. 9:30 AM. The House Homeland Security Committee will hold a hearing on the President's budget proposals for FY 2005. Secretary of Homeland Security Tom Ridge will testify. Location: Room 2200, Rayburn Building.

TO BE DECIDED WITHOUT ORAL ARGUMENT. 9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in NCTA v. FCC, No. 03-1140. Judges Edwards, Roberts and Silberman. Location: Location: 333 Constitution Ave. NW.

10:00 AM. The Senate Budget Committee will hold a hearing to examine President Bush's FY 2005 budget proposals. Location: Room 608, Dirksen Building.

10:00 AM. The Senate Judiciary Committee may hold a hearing an executive business meeting. The agenda includes consideration of several judicial nominees, including Business meeting to consider the nominations of William James Haynes (to be a Judge of the U.S. Court of Appeals for the 4th Circuit), Raymond Gruender (8th Circuit), Henry Saad (6th Circuit), Judith Herrera (District of New Mexico), Dennis Saylor (District of Massachusetts), Sandra Townes (Eastern District of New York), Louis Guirola (Southern District of Mississippi), Virginia Hopkins (Northern District of Alabama), and Kenneth Karas (Southern District of New York). See, notice. Location: Room 226, Dirksen Building.

10:00 AM. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property will hold a hearing on HR 3632, the "Anticounterfeiting Amendments of 2003." The hearing will be webcast. Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

11:00 AM - 12:00 NOON. The Heritage Foundation will host a panel discussion titled "Federalism and the Internet Tax: A Conflict of Two Conservative Principles?" The speakers will be Sen. George Allen (R-VA), Sen. Lamar Alexander (R-TN), Edward Fuelner (Heritage), and James Gattuso (Heritage). See, notice. Location: Heritage, 214 Massachusetts Ave NE.

2:00 PM. The Senate Finance Committee will hold a hearing on the revenue provisions of the President's proposed budget for FY 2005. Secretary of the Treasury John Snow will testify. Location: Room 215, Dirksen Building.

Extended deadline to submit comments to the Department of Commerce's (DOC) Bureau of Industry and Security (BIS), which is also known as the Bureau of Export Administration (BXA), regarding its notice of proposed rulemaking (NPRM) regarding amending the Export Administration Regulations (EAR) to implement a revised version of the BIS's Simplified Network Application Processing (SNAP+) system. This proposed rule also would mandate use of SNAP+ for all filings of Export License applications (except Special Comprehensive Licenses), Reexport Authorization requests, Classification requests, Encryption Review requests, and License Exception AGR notifications, unless the BIS authorizes paper filing for a particular user or transaction. See, notice in the Federal Register, November 12, 2003, Vol. 68, No. 218, at Pages 64009-64023 (setting January 12, 2003 deadline), and notice in the Federal Register January 12, 2004, Vol. 69, No. 7, at Page 1685 (extending deadline to February 12) .

8:30 AM - 5:45 PM. Day two of a two day conference hosted by the National Telecommunications and Information Administration (NTIA) titled "Forum on Spectrum Management Policy Reform". See, agenda [PDF]. To register, contact Margaret Huynh at mhuynh@nas.edu. Location: Lecture Room, National Academy of Sciences Building, 2100 C Street, NW.

11:00 AM. Frank Libutti (Under Secretary of the Department of Homeland Security) will speak to the National Emergency Management Association's (NEMA) conference titled "Assessing & Protecting the Nation's Critical Infrastructure". Location: Capitol Hilton Hotel, Presidential Ballroom, 16th & K Streets NW.

12:00 NOON. Deadline to submit comments to the Office of the U.S. Trade Representative (USTR) regarding foreign countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market access to U.S. persons who rely on intellectual property protection. The USTR is required under Section 182 of the Trade Act of 1974, codified at 19 U.S.C. § 2242, to identify which countries should be identified as Priority Foreign Countries. This section is also know as "Special 301".  See, notice in the Federal Register, January 6, 2004, Vol. 69, No. 3, at Pages 718 - 719.

Extended deadline to submit comments to the Federal Communications Commission (FCC) in response to its Report and Order Further Notice of Proposed Rulemaking [72 pages in PDF] in its proceeding titled "In the Matter of Digital Broadcast Content Protection". This item is FCC 03-273 in MB Docket 02-230. This FNPRM seeks comment regarding a permanent approval mechanism for content protection and recording technologies to be used in conjunction with device outputs. For more information, contact Rick Chessen rchessen@fcc.gov or Susan Mort at smort@fcc.gov or 202-418-7200. See, notice [PDF] extending deadlines.

Extended deadline to submit comments to the Federal Communications Commission (FCC) in response to its Second Further Notice of Proposed Rulemaking regarding digital plug and play compatibility. The FCC announced its Second Report and Order and Second Further Notice of Proposed Rulemaking at its September 10, 2003 meeting. See, story titled "FCC Adopts Digital Plug and Play Cable Compatibility Rules" in TLJ Daily E-Mail Alert No. 737, September 11, 2003. The notice in the Federal Register states that the NPRM seeks public comments "on the mechanisms and standards by which new connectors and associated content protection technologies can be approved for use with unidirectional digital cable products". It further seeks comments on "the potential extension of digital cable system transmission requirements to digital cable systems with an activated channel capacity of 550 MHz or higher; whether it is necessary to require consumer electronics manufacturers to provide pre-sale information to consumers regarding the functionalities of unidirectional digital cable televisions; and whether the Commission should ban or permit the down-resolution of non-broadcast MVPD programming." This item is FCC 03-225 in CS Docket 97-80 and PP Docket 00-67. See, notice in the Federal Register, November 28, 2003, Vol. 68, No. 229, at Pages 66776 - 66781. See also, notice [PDF] extending deadlines.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking (FNPRM) regarding revisions to the FCC's high cost universal service support mechanism. This is FCC 03-249 in CC Docket No. 96-45. This is also known as the "10th Circuit Remand". See, notice in the Federal Register, December 15, 2003, Vol. 68, No. 240, at Pages 69641 - 69647. See also, stories titled "FCC Announces Order on Remand Regarding High Cost Universal Service Support Mechanism" in TLJ Daily E-Mail Alert No. 761, October 20, 2003, and "FCC Publishes Notices Regarding 10th Circuit Universal Service Remand" in TLJ Daily E-Mail Alert No. 800, December 16, 2003.

Deadline to submit comments to the National Archives and Records Administration (NARA) regarding it proposal to dispose of 27,866 magnetic tape cartridges containing copies of e-mail records of the Clinton administration created from July 15, 1994 through December 1999. See, notice in the Federal Register, December 30, 2003, Vol. 68, No. 249, at Pages 75286 - 75287.

Deadline for the General Accounting Office (GAO) to submit its report to Congress, pursuant to Section 519 of HR 2555, the "Department of Homeland Security Appropriations Act, 2004". President Bush signed this bill on October 1, 2003. This report pertains to the Transportation Security Administration's (TSA) Computer Assisted Passenger Prescreening System (CAPPS II). See, story titled "Homeland Security Appropriations Bill Purports to Restrict Use of Funds for CAPPS II" in TLJ Daily E-Mail Alert No. 751, October 2, 2003.

Deadline for the Central Intelligence Agency (CIA) and Department of Defense (DOC) to submit a report to the Congress regarding the vulnerability of intelligence related computer systems. This report is required by Section 351 of HR 2417, the "Intelligence Authorization Act for Fiscal Year 2004". See, story titled "Bush Signs Intelligence Authorization Bill" in TLJ Daily E-Mail Alert No. 799, December 15, 2003.

Deadline for the Central Intelligence Agency (CIA) to submit a report to the Congress regarding the dependence on foreign made computers and software. This report is required by Section 356 of HR 2417, the "Intelligence Authorization Act for Fiscal Year 2004". See, story titled "Bush Signs Intelligence Authorization Bill" in TLJ Daily E-Mail Alert No. 799, December 15, 2003.

Presidents Day. The Federal Communications Commission (FCC) and other federal agencies will be closed.

The House and Senate will be in recess from February 16 through February 20 for the Presidents Day recess.

9:00 AM - 4:00 PM. The National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) and Advanced Network Technologies Division (ANTD) will host a one day conference titled "Spam Technology Workshop". See, notice and conference website. The price to attend is $70. The deadline to register is February 3. Location: Building 101, Green Auditorium, NIST, Gaithersburg, MD.

Day one of a three day workshop hosted by the National Institute of Standards and Technology's (NIST) Computer Security Division titled "Advanced Information Technology (IT) Security Auditing". See, notice. Location: NIST, Gaithersburg, MD.

TIME? Day one of a three day workshop to be hosted by the Department of Justice's (DOJ) Antitrust Division and the Federal Trade Commission (FTC) on application of the Horizontal Merger Guidelines. See, notice. Location: FTC, 601 New Jersey Ave., NW, Conference Center.

? TIME?. Tentative date for a public roundtable meeting hosted by the U.S. Patent and Trademark Office (USPTO) regarding the effectiveness of inter partes reexamination proceedings. See, notice in the Federal Register, December 30, 2003, Vol. 68, No. 249, at Pages 75217 - 75218. Location: USPTO, Arlington, VA.

Deadline to submit comments to the Federal Communications Commission (FCC) to update the record concerning petitions for reconsideration of rules that the FCC adopted in the 1997 access charge reform docket. See, notice in the Federal Register, January 16, 2004, Vol. 69, No. 11, at Pages 2560 - 2561.

12:00 NOON - 2:00 PM. The DC Bar Association will host a luncheon program titled "Bursting the Bubble on Internet Pop-Up Ads?". The speakers will be Terrance Ross (Gibson Dunn & Crutcher, attorneys for the Washington Post in Washington Post v. Gator), Arnold Lutzker (attorney for defendants in U-Haul v. WhenU.com), and Walter Effross (American University). Prices vary. For more information, call 202 626-3463. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

12:15 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host a brown bag lunch. The topic will be "DTV Reality -- It's Here". The speakers will include Rick Chessen, the Associate Bureau Chief of the Federal Communications Commission's (FCC) Media Bureau, and head of the FCC's DTV Task Force. For more information, contact Peter Corea at 202 418-7931 or pcorea@fcc.gov or Ryan Wallach at 202 303-1159 or rwallach@willkie.com. Location: Willkie Farr & Gallagher, 1875 K St., NW.

Day two of a three day workshop hosted by the National Institute of Standards and Technology's (NIST) Computer Security Division titled "Advanced Information Technology (IT) Security Auditing". See, notice. Location: NIST, Gaithersburg, MD.

TIME? Day two of a three day workshop to be hosted by the Department of Justice's (DOJ) Antitrust Division and the Federal Trade Commission (FTC) on application of the Horizontal Merger Guidelines. See, notice. Location: FTC, 601 New Jersey Ave., NW, Conference Center.