3/3. The House amended and approved HR 1561, the "United States Patent and Trademark Fee Modernization Act of 2003", by a vote of 379-28. See, Roll Call No. 38.

The bill contains increases in user fees that implement the U.S. Patent and Trademark Office's (USPTO) 21st Century Strategic Plan. It also provides for U.S. outsourcing of patent searches, and an end to the diversion of user fees to subsidize other government programs.

The Senate has yet to pass this, or a similar, bill.

Manager's Amendment. While the House Rules Committee had adopted a rule on March 2 that made three amendments in order, the House passed none of these. However, it did pass a manager's amendment [5 pages in PDF] drafted just prior to the floor debate. Rep. James Sensenbrenner (R-WI), the Chairman of the House Judiciary Committee, was the floor manager for the Republicans. This amendment addresses fee diversion, outsourcing of patent searches, and fees for small businesses.

First, this amendment contains language that would end the diversion of user fees. It provides that "There is established in the Treasury a Patent and Trademark Fee Reserve Fund. If fee collections by the Patent and Trademark Office for a fiscal year exceed the amount appropriated to the Office for that fiscal year, fees collected in excess of the appropriated amount shall be deposited in the Patent and Trademark Fee Reserve Fund. After the end of each fiscal year, the Director shall make a finding as to whether the fees collected for that fiscal year exceed the amount appropriated to the Patent and Trademark Office for that fiscal year. If the amount collected exceeds the amount appropriated, the Director shall, if the Director determines that there are sufficient funds in the Reserve Fund, make payments from the Reserve Fund to persons who paid patent or trademark fees during that fiscal year. The Director shall by regulation determine which persons receive such payments and the amount of such payments, except that such payments in the aggregate shall equal the amount of funds deposited in the Reserve Fund during that fiscal year, less the cost of administering the provisions of this paragraph."

For many Congresses members of the House Judiciary Committee, as well as many intellectual property owners, and the groups that represent them, have sought to end to the process of diverting user fees collected by the USPTO to fund other government programs. The members of the House Appropriations Committee (HAC) have been at the center of the opposition to ending the diversion of fees.

However, in early February, Rep. Sensenbrenner negotiated a compromise approach with members of the HAC, that is reflected in this manager's amendment. It provides that the HAC will still set the budget for the USPTO, but that if the total of user fees collected exceed the budget, the excess will be refunded, rather than diverted to other government programs.

Rep. Frank Wolf (R-VA), the Chairman of the HAC's subcommittee with jurisdiction over the USPTO, spoke in support of the compromise language, and the bill, during the floor debate. And consequently, in the final vote, only three of the 65 members of the HAC voted against the bill.

Second, this manager's amendment limits outsourcing of patent searches. In addition to the provisions limiting the USPTO's discretion to outsource patent searches that were already contained in the bill as reported by the House Judiciary Committee, this manager's amendment adds restrictions to assure that any outsourced searching is conducted by U.S. companies and U.S. citizens.

This amendment provides that the Director of the USPTO "shall require that any search by a qualified search authority that is a commercial entity is conducted in the United States by persons that -- (i) if individuals, are United States citizens; and (ii) if business concerns, are organized under the laws of the United States or any State and employ United States citizens to perform the searches."

It also provides that "A search of an application that is the subject of a secrecy order under section 181 or otherwise involves classified information may only be conducted by Office personnel."

It also provides that "A qualified search authority that is a commercial entity may not conduct a search of a patent application if the entity has any direct or indirect financial interest in any [patent, or any] pending or imminent application for patent filed or to be filed in the Patent and Trademark Office."

[Editor's note: TLJ obtained two copies of the manager's amendment on March 2 from staff -- a PDF copy that does not contain the words in brackets, "patent or any", and a paper copy that includes these words inserted by hand.]

The inclusion of these provisions substantially eliminated opposition to the bill based upon outsourcing concerns. However, one member, Rep. Marcy Kaptur (D-OH) still argued against the bill, in part, because of her concerns about outsourcing.

Third, the manager's amendment provides for fee reductions for small businesses. The Rules Committee had made in order a stand alone amendment to be offered by Rep. Don Manzullo (R-IL), the Chairman of the House Small Business Committee, that would have reduced fees for small businesses.

The compromise language in the manager's amendment satisfied Rep. Manzullo. He spoke in support of the manager's amendment, and the bill, during floor debate. And consequently, only one member of the Small Business Committee voted against the bill.

Finally, the Rules Committee had made in order an amendment, to be offered by Rep. Sheila Lee (D-TX), requiring some outsourcing to minority and woman owned businesses. It provided that "the Director shall ensure that a substantial number of searches by qualified search authorities that are commercial entities are conducted by persons that -- (i) if individuals, are United States citizens; and (ii) if business concerns, are organized under the laws of the United States or any State, or are small business concerns, minority-owned business concerns, or business concerns that are owned by women."

At the time for its introduction, Rep. Lee was not present in the House to offer it. The House waited, to give her an opportunity to come to the floor. She did not. No one else offered her amendment.

Floor Debate. The House engaged in a floor debate in which Republicans and Democrats praised the bill. Rep. Sensenbrenner was the Republican floor manager. Rep. Howard Berman (D-CA), the ranking Democrat on the House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property (CIIP), was the Democratic floor manager.

Rep. Sensenbrenner stated that the new fee structure contained in HR 1561 will reduce patent pendency, improve patent quality, and provide for full electronic processing of patent and trademark applications.

He stated that there is a patent backlog of 475,000 now, and that this could grow to over one million if HR 1561 does not become law.

He also stated that "time is money in the intellectual property world". He elaborated that without the bill, pendency could grow to six or eight years.

Rep. Kaptur (at left) was the sole opponent of the bill during the floor debate. (However, Rep. Alcee Hastings (D-FL), spoke in opposition to the bill when the House considered the rule adopted by the Rules Committee.)

Kaptur spoke apocalyptically, and with zeal. She said that "HR 1561 dismantles the Patent and Trademark Office as we have known it." Moreover, the bill "verges on insanity".

She focused on outsourcing. She said that "this is another episode, really, in the outsourcing of American jobs", and that "now the federal government is getting into the act." She raised the specter of foreign outsourcing.

Rep. Berman responded the manager's amendment limits outsourcing to U.S. entities. Rep. Kaptur then stated that U.S. companies could mean Honda and Daimler. Rep. Berman responded that the manager's amendment limits the outsourced work to U.S. citizens. Then, Rep. Kaptur raised "Soviet Union" submarines.

She also held up a copy of the Constitution, read the patent and trademark clause, and argued that the outsourcing provisions of the bill are unconstitutional. She cited no precedent.

She also asked, "How in heaven's name does this make America any more secure?"

Rep. Sensenbrenner repeatedly yielded more time to her.

Rep. Zoe Lofgren (D-CA), who represents a Silicon Valley district, spoke in support of the bill. She said that the innovators in her district do not oppose the fee increases. Rather, they oppose the fee diversions. She called this a "tax on innovation."

Rep. Howard Coble (R-NC), a former CIIP Subcommittee Chairman who has labored for years to end the diversion of USPTO, also spoke in support of the bill. He also argued that the USPTO's Strategic Plan, and this bill, will make the USPTO more "consumer friendly".

Rep. Lamar Smith (R-TX), the current CIIP Subcommittee Chairman, also spoke in support of the bill. He said that "without a strong PTO our economy would be diminished" and "jobs would be lost".

Rep. Robert Wexler (D-FL) also discussed the economic impact. He said that unless this bill is passed, an overburdened USPTO "will deter the innovators of America". He continued that "one of the ways in which to assist American workers .. is to allow the Patent and Trademark Office these reforms."

Final Vote. In the end, there were only 28 no votes. These votes can be characterized. 11 no votes came from members of the Black Caucus, perhaps as a consequence of the Lee amendment not being offered and passed. 10 no votes came white Democrats from rust belt states, such as Rep. Kaptur. 4 no votes came from representatives of the Maryland suburbs of Washington and Baltimore that are the residence of many government workers.

However, while 4 of the 8 members of the Maryland delegation voted no, the Virginia delegation voted 11-0 in favor. The USPTO is located in northern Virginia, and most of its workers live there.

The members of the Black Caucus who vote no were Julia Carson (D-IN), William Clay (D-MO), Elijah Cummings (D-MD), Alcee Hastings (D-FL), Jesse Jackson (D-IL), Sheila Lee (D-TX), John Lewis (D-GA), Kendrick Meek (D-FL), Maxine Waters (D-CA), Diane Watson (D-CA), and Al Wynn (D-MD).

The other Democrats who voted no were Sherrod Brown (D-OH), Jerry Costello (D-IL), Lane Evans (D-IL), Rush Holt (D-NJ), Paul Kanjorski (D-PA), Marcy Kaptur (D-OH), James Oberstar (D-MN), David Obey (D-WI), Dutch Ruppersberger (D-MD), Janice Schakowsky (D-IL), and Strickland Visclosky (D-IL).

The Republicans who voted no were Roscoe Bartlett (R-MD), Duncan Hunter (R-CA), Walter Jones (R-NC), and Ron Paul (R-TX). Rep. Paul, an ardent libertarian, frequently votes no. The other three are all members of the House Armed Services Committee.

And, Bernie Sanders (I-VT) voted no.

Only 3 members from the west coast voted no (Waters, Watson, Hunter). No members from the mountain or prairie states voted no. One member from New England or New York (Sanders) voted no.

3/3. Northwest Airlines (NWA) submitted a document [41 pages in PDF] titled "Answer of Northwest Airlines, Inc." to the Department of Transportation (DOT) in response to the complaint submitted by the Electronic Privacy Information Center (EPIC).

On January 20, 2004, the EPIC submitted a complaint [11 pages PDF] to the DOT that asserts that NWA's transfer of passenger data to the National Aeronautics and Space Administration (NASA) violated NWA's privacy policy, and that this, in turn, constitutes an unfair and deceptive trade practice in violation of 49 U.S.C. § 41712. See, story titled "EPIC Complains to DOT About Transfer of Airline Passenger Data to NASA" in TLJ Daily E-Mail Alert No. 820, January 21, 2004.

NWA has stated that it did transfer the data to NASA. It issued a statement on January 18, 2003: "In the aftermath of the September 11, 2001 tragedy, NASA had discussions with Northwest Airlines’ Security Department regarding a NASA research study to improve aviation security. In December 2001, NASA requested that Northwest's Security Department provide it with passenger name record data from the period July, August, and September 2001 for NASA’s exclusive use in its research study. Northwest Airlines agreed to provide that data."

The EPIC previously obtained records from the NASA in response to z request made under the Freedom of Information Act (FOIA). Also, the EPIC has published copies of documents in its web site. See, story titled  "Northwest Airlines Provided Passenger Data to NASA for Data Mining Study" in TLJ Daily E-Mail Alert No. 819, January 20, 2004.

And, the EPIC continues to seek further records from the NASA. See, story titled "EPIC Files Complaint Against NASA Seeking Records Regarding Transfer of Passenger Data" in TLJ Daily E-Mail Alert No. 825, January 28, 2004.

The EPIC alleges in its complaint that NWA violated its privacy policy. The EPIC alleges that "NWA assures passengers that they will be in ``complete control of ... the use of information [they] provide to Northwest Airlines.´´ The airline further assures customers that it has ``put in place safeguards to ... prevent unauthorized access or disclosure´´ of the information it collects."

The relevant statute (49 U.S.C. § 41712) provides that "On the initiative of the Secretary of Transportation or the complaint of an air carrier, foreign air carrier, or ticket agent, and if the Secretary considers it is in the public interest, the Secretary may investigate and decide whether an air carrier, foreign air carrier, or ticket agent has been or is engaged in an unfair or deceptive practice or an unfair method of competition in air transportation or the sale of air transportation. If the Secretary, after notice and an opportunity for a hearing, finds that an air carrier, foreign air carrier, or ticket agent is engaged in an unfair or deceptive practice or unfair method of competition, the Secretary shall order the air carrier, foreign air carrier, or ticket agent to stop the practice or method."

NWA wrote in its answer that "The research opportunity presented to Northwest Airlines by NASA's Ames Research Center in the wake of the worst terrorist attacks in national history (attacks which are not even referenced in EPIC's complaint) was an appropriate instance of industry and government cooperation that was necessary and widespread in response to the terrorism of September 11. The complaints are disturbingly lacking in context, and the legal claims are meritless. Northwest Airlines categorically denies that its actions were ``unfair,´´ ``deceptive,´´ or in any manner violated 49 U.S.C. § 41712". (Parentheses in original.)

"Passengers have no inherent right or expectation of total privacy in the information provided when traveling on commercial airlines-particularly after September 11. The only relevant basis for privacy protection is Northwest Airlines' privacy policy". But, NWA asserts, "The plain meaning of the policy is an assurance that customer information will not be commercially exploited and that it is secure from hackers. Northwest Airlines fulfilled those promises, but it did not promise that it would not share information with the government."

NWA also argues that the EPIC "should not have standing to wage public policy battles through the formal complaint process by alleging only hypothetical injuries. The Secretary should not automatically delegate his discretion to initiate formal proceedings to any group that wishes to complain about the practices of the airline industry. Only persons alleging actual, concrete injury should be permitted to file formal complaints and compel a docketed proceeding."

Northwest is represented by Jay Lefkowitz of the Washington DC office of the law firm of Kirkland & Ellis.

3/3. The House passed HR 1417, the "Copyright Royalty and Distribution Reform Act of 2003" by a vote of 406-0. See, Roll Call No. 37. This bill would replace copyright arbitration royalty panels (CARPs) with a Copyright Royalty Judge.

The bill was introduced on March 25, 2003 by Rep. Lamar Smith (R-TX), Rep. Howard Berman (D-CA), and Rep. John Conyers (D-MI). The House Judiciary Committee approved the bill on September 24, 2003. See, Report No. 108-408.

The Committee found that CARP decisions are unpredictable and inconsistent, CARP arbitrators lack appropriate expertise to render decisions and frequently reflect either a content or user bias, and the CARP process is unnecessarily expensive.

The Senate has yet to pass this, or a similar, bill.

The House will meet at at 10:00 AM for legislative business. See, Republican Whip Notice.

The Senate will meet at 9:30 AM and resume consideration of S 1637, the "Jumpstart Our Business Strength (JOBS) Act". This bill would replace the Foreign Sales Corporation (FSC) and Extraterritorial Income (ETI) tax regimes that the World Trade Organization (WTO) has ruled to be illegal export subsidies.

9:30 - 10:30 AM. Federal Communications Commission (FCC) Commissioner Kevin Martin will host a "press breakfast". For more information, please contact Jason Williams at 202-418-2105. Location: FCC, 445 12th St. SW, Room 8-A204 (8th Floor).

9:30 AM. The Senate Judiciary Committee will hold an executive business meeting. The agenda includes consideration of Henry Saad (to be a Judge of the U.S. Court of Appeals for the 6th Circuit), William James Haynes (4th Circuit), Raymond Gruender (8th Circuit), Franklin Van Antwerpen (3rd Circuit), Diane Sykes (7th Circuit), Louis Guirola (Southern District of Mississippi), Judith Herrera (District of New Mexico), Virginia Hopkins (Northern District of Alabama), Kenneth Karas (Southern District of New York), Dennis Saylor (District of Massachusetts), Sandra Townes (Eastern District of New York), Ricardo Martinez (Western District of Washington), Gene Pratter (Eastern District of Pennsylvania), Neil Vincent Wake (District of Arizona), William Duffey (Northern District of Georgia), James Robart (Western District of Washington), Juan Sanchez (Eastern District of Pennsylvania), and Lawrence Stengel (Eastern District of Pennsylvania). The Senate Judiciary frequently departs from its scheduled agenda. See, notice. Location: Room 226, Dirksen Building.

10:30 AM. Rep. Joe Barton (R-TX), the new Chairman of the House Commerce Committee, and Subcommittee Chairmen, will announce a new Committee structure. For more information, contact Samantha Jordan at (202) 225-2002. Location: Room 2123, Rayburn Building.

12:00 NOON - 2:00 PM. The Progress and Freedom Foundation (PFF) will host a luncheon. The speakers will be Charlie Ergen (Ch/CEO of EchoStar Communications), Blair Levin (Legg Mason Equity Research), Rudy Baca (Precursor Group), and Paul Gallant (Schwab's Washington Research Group). RSVP to Brooke Emmerick at 202 289-8928 or bemmerick@pff.org. The PFF notice also states that "Members of the media should contact David Fish at 202-289-8928 or dfish@pff.org." Location: Rotunda Room, Ronald Reagan Building and International Trade Center, 1300 Pennsylvania Ave., NW.

10:00 AM. The House Appropriations Committee's Subcommittee on Homeland Security will hold a hearing on the proposed budget for the Department of Homeland Security (DHS). Secretary Tom Ridge is scheduled to testify. Location: Room 2359, Rayburn Building.

1:00 PM. The House Appropriations Committee's Subcommittee on Commerce, Justice, and State, the Judiciary, and Related Agencies will hold a hearing on the proposed budget for the Department of Justice (DOJ). Location: Room H-309, Capitol Building.

12:15 PM. The Federal Communications Bar Association's (FCBA) Wireless Practice Committee will host a luncheon. The topic will be "Meet CTIA's New Federal Regulatory and Congressional Affairs Senior Team". The price to attend is $15. RSVP by 5:00 PM on March 3 to Wendy Parish at wendy@fcba.org. For more information contact Laura Phillips at 202 842-8891. Location: Sidley Austin, 1501 K Street, NW, 6th Floor.

Day one of a four day meeting of the National Association of Regulatory Utility Commissioners (NARUC). For more information, contact Michelle Malloy at 202 898-2214 or Wendy Harris at 202 898-2209. See, notice. Location: Renaissance Washington Hotel.

The Supreme Court will begin a recess. (It will return on March 22, 2004.)

9:00 AM - 4:00 PM. The National Institute of Standards and Technology's (NIST) Computer Security Division will host a conference titled "Recommended Security Controls for Federal Information Systems". The price to attend is $75. See, notice. Location: NIST, Gaithersburg, MD.

12:15 PM. The Federal Communications Bar Association's (FCBA) Mass Media and Legislation Committees will host a brown bag lunch. The topic will be "What's Going on for Broadcasters on the Hill?" For more information, contact John Logan at 202 776-2640 or jlogan@dowlohnes.com, or Michale Nilsson at 202 730-1334 or mnilsson@harriswiltshire.com. Location: Wiley Rein & Fielding, 1750 K Street, NW, 10th Floor.

Day two of a four day meeting of the National Association of Regulatory Utility Commissioners (NARUC). For more information, contact Michelle Malloy at 202 898-2214 or Wendy Harris at 202 898-2209. See, notice. Location: Renaissance Washington Hotel.

Deadline to submit reply comments to the Federal Communications Commission (FCC) regarding its proposed rules regarding use of satellite earth stations on board vessels in the 5925-6425 MHz, 3700-4200 MHz, 14.0-14.5 GHz and 11.7-12.2 GHz bands. The NPRM is FCC 03-286 in IB Docket No. 02-10. See, notice in the Federal Register, January 22, 2004, Vol. 69, No. 14, at Pages 3056 - 3064.

Deadline to submit reply comments to the Federal Communications Commission (FCC) its request that parties refresh the record regarding reconsideration of rules adopted in the 1999 access reform docket. This is CC Docket Nos. 96-262, 94-1, 98-157, and CCB/CPD File No. 98-63, adopted August 5, 1999, and released August 27, 1999. See, notice in the Federal Register, January 21, 2004, Vol. 69, No. 13, at Pages 2862 - 2863.

Deadline to submit comments to the National Institute of Standards and Technology (NIST) and National Telecommunications and Information Administration (NTIA) regarding Internet Protocol version 6 (IPv6). See, notice in the Federal Register, January 21, 2004, Vol. 69, No. 13, at Pages 2890 - 2899. See also, story titled "NTIA and NIST Request Comments on IPv6", TLJ Daily E-Mail Alert No. 819, January 20, 2004.

10:00 AM. The Senate Finance Committee will hold a hearing titled "The Administration's International Trade Agenda". U.S. Trade Representative (USTR) Robert Zoellick will testify. Location: Room 215, Dirksen Building.

12:15 PM. The Federal Communications Bar Association's (FCBA) Cable Practice Committee will host a brown bag lunch. The topic will be the Federal Communications Commission's (FCC) plug & play and broadcast flag rules. The speakers will be Susan Mort (FCC), John Wong (Division Chief of the FCC's Media Bureau's Engineering Division) and Michael Lance (Deputy Division Chief of the ED). For more info contact Frank Buono at fbuono@willkie.com. RSVP to Wendy Parish at wendy@fcba.org. Location: Willkie Farr & Gallagher, 1875 K St., NW, 2nd Floor.

1:30 - 3:00 PM. The WRC-07 Advisory Committee's Informal Working Group 1: Terrestrial and Space Science Services will meet. See, notice [PDF]. Location: Federal Communications Commission (FCC), 445 12th Street, SW, Conference Room #5 (8th Floor, Room 8-B411).

Day one of a three day conference hosted by the National Institute of Standards and Technology (NIST) and the Federal Information Systems Security Educators' Association (FISSEA) titled "Awareness, Training and Education: The Driving Force Behind Information Security". The price to attend is $365. See, notice. Location: Inn and Conference Center, University of Maryland University College (UMUC), 3501 University Boulevard East, Adelphi, MD.

Day three of a four day meeting of the National Association of Regulatory Utility Commissioners (NARUC). For more information, contact Michelle Malloy at 202 898-2214 or Wendy Harris at 202 898-2209. See, notice. Location: Renaissance Washington Hotel.

9:30 - 11:00 AM. The AEI-Brookings Joint Center will host a panel discussion titled "The Internet Telephony Revolution: Reality or Hype?". The speakers will be Robert Crandall, Harold Furchtgott-Roth, Reed Hundt and Robert Litan. RSVP to Shannon Leahy at sleahy@brookings.edu or 202 797-6274. Location: National Press Club, 529 14th St. NW, 13th Floor.

2:00 - 4:30 PM. The American Enterprise Institute (AEI) will host a pair of panel discussions titled "Three Cheers for Globalization". See, notice. Location: 12th floor, 1150 17th St., NW.

Day two of a three day conference hosted by the National Institute of Standards and Technology (NIST) and the Federal Information Systems Security Educators' Association (FISSEA) titled "Awareness, Training and Education: The Driving Force Behind Information Security". The price to attend is $365. See, notice. Location: Inn and Conference Center, University of Maryland University College (UMUC), 3501 University Boulevard East, Adelphi, MD.

Day four of a four day meeting of the National Association of Regulatory Utility Commissioners (NARUC). For more information, contact Michelle Malloy at 202 898-2214 or Wendy Harris at 202 898-2209. See, notice. Location: Renaissance Washington Hotel.

Deadline to submit requests to the U.S. Trade Representative's (USTR) Trade Policy Staff Committee (TPSC) to testify orally at the TPSC hearing on March 17, 2004 regarding negotiating objectives for the proposed free trade agreement (FTA) between the U.S. and four Andean countries (Colombia, Peru, Ecuador, and Bolivia). See, notice in the Federal Register, February 17, 2004, Vol. 69, No. 31, at Pages 7532 - 7534.

3/3. Steve Koenig was named senior manager of industry analysis at the Consumer Electronics Association (CEA). He previously was an analytic consultant for comScore Media Metrix. He was also a senior editor at CMP Media's former Computer Retail Week. See, CEA release.

3/1. Sen. Tim Johnson (D-SD) introduced S 2151, the "Remote Sensing Applications Act of 2004". This bill provides that the Director of the United States Geological Survey "shall establish a program of grants for competitively awarded pilot projects to explore the integrated use of sources of remote sensing and other geospatial information to address State, local, regional, and tribal agency needs." He stated that "Remote sensing technology is utilized to map and monitor the surface of the globe. The data we recover through remote sensing equipment contributes to our ability to evaluate and measure a wide scope of variables. The Federal Government incorporates remote sensing data to accomplish many critical tasks from monitoring global food supply and environmental developments to enhancing our national security initiatives." See, Congressional Record, March 1, 2004, at page S1935. The bill was referred to the Senate Commerce Committee.