TLJ News: January 6-10, 2005.

1/10. The Supreme Court denied certiorari in Chiron v. Genentech, a case involving a patent pertaining to monoclonal antibodies. See, Order List [29 pages in PDF] at page 4. This lets stand the judgment of the U.S. Court of Appeals (FedCir).

The Federal Circuit held in its March 30, 2004 opinion that the claims of the patent at issue (U.S. Patent No. 6,054,561) are invalid for failure to adequately disclose or support the subject matter of a patent in certain applications.

After the U.S. Patent and Trademark Office (USPTO) issued the patent, Chiron filed a complaint in U.S. District Court (EDCal) against Genentech alleging patent infringement. The District Court entered judgment for Genentech, and the Court of Appeals affirmed.

The Appeals Court commented that "The written description requirement prevents applicants from using the amendment process to update their disclosures (claims or specifications) during their pendency before the patent office. Otherwise applicants could add new matter to their disclosures and date them back to their original filing date, thus defeating an accurate accounting of the priority of invention.

This case is Chiron Corporation v. Genentech, Inc., Sup. Ct. No. 04-477, a petition for writ of certiorari to the U.S. Court of Appeals (FedCir), App. Ct. Nos. 03-1158 and 03-1159. Judge Randall Rader wrote the opinion, in which Judge Archer joined; Judge Bryson wrote a concurring opinion. This was an appeal from the U.S. District Court for the Eastern District of California, D.C. No. S-00-1252 WBS GGH, Judge William Shubb presiding.

1/10. The U.S. Patent and Trademark Office (USPTO) released its annual list of the top 10 private sector patent recipients. For the year 2004, IBM was once again the top patent recipient.

Top 10 Patent Recipients in 2004
Rank	Number of Patents	Company
1	3,248	IBM Corporation
2	1,934	Matsushita
3	1,805	Canon Kabushiki Kaisha
4	1,775	Hewlett-Packard.
5	1,760	Micron Technology
6	1,604	Samsung Electronics
7	1,601	Intel Corporation
8	1,514	Hitachi, Ltd
9	1,310	Toshiba Corporation
10	1,305	Sony Corporation

Jon Dudas, the head of the USPTO, stated in a release that "Increasingly, patents have become an essential ingredient of our economic vitality, paving the way for investment in commerce and in research and development, and creating jobs for millions of Americans."

1/10. The Supreme Court denied certiorari in CALPER v. Ebbers, a securities fraud action brought by WorldCom Inc. bondholders. See, Order List [29 pages in PDF] at page 19. This case is California Public Employee's Retirement v. Bernard Ebbers, et al., No. 04-366.

1/10. The Federal Communications Commission (FCC) published a notice in the Federal Register that describes, recites, and sets the effect date (February 7, 2005 for most provisions) for its rules regarding broadband over powerline systems (BPL). See, Federal Register, January 7, 2005, Vol. 70, No. 5, at Pages 1360 - 1379. The FCC released the text [86 pages in PDF] of its Report and Order that amends Part 15 of the FCC's rules for BPL systems. The FCC adopted, but did not release, this item at its October 14, 2004 meeting. This item is FCC 04-245 in ET Docket No. 04-37 and ET Docket No. 03-104. See, story titled "FCC Adopts BPL Report and Order" in TLJ Daily E-Mail Alert No. 997, October 15, 2004. See also, story titled "FCC Adopts Broadband Over Powerline NPRM" in TLJ Daily E-Mail Alert No. 836, February 13, 2004. The FCC released the text [38 pages in PDF] of this NPRM on February 23, 2004.

1/10. The European Commission issued a release in which it stated that it "has launched a public consultation on how to make the benefits of Information and Communication Technologies available to the widest possible range of citizens, including to older people and people with disabilities. This consultation is a first step in the Commission’s endeavour to remove the technical challenges and difficulties that people with disabilities and others experience when trying to use electronic products or services such as computers, mobile phones or the Internet."

1/10. Scott Hammond, the acting Deputy Assistant Attorney General for Criminal Enforcement in the Department of Justice's Antitrust Division, gave a speech in Hawaii titled "An Overview Of Recent Developments In The
Antitrust Division's Criminal Enforcement Program". He discussed, among other topics, the DOJ's criminal action against Infineon Technologies, a manufacturer of dynamic random access memory (DRAM). See also, story titled "DOJ Charges Infineon With Felony Price Fixing; Infineon Pleads Guilty" in TLJ Daily E-Mail Alert No. 978, September 16, 2004.

1/9. Federal Reserve Board (FRB) Governor Donald Kohn gave a speech titled "Central Bank Communication" to the Annual Meeting of the American Economic Association in Philadelphia, Pennsylvania. Also, on January 6, 2005, he gave a speech titled "Crisis Management: The Known, the Unknown, and the Unknowable" at another conference in Philadephia.

Neither of these speeches was about technology law or policy. He only spoke about central banking and regulation of financial institutions and markets. He focused on information, sharing of information, and uncertainty. Among other topics, he analyzed the dissemination of information by the government to market participants where the government plays a role in that market. He also analyzed the benefits to policy making when governments can obtain information. That is, his talks included discussions of several aspects of government transparency.

Kohn has simply provided some economic analysis of information and central banking. However, some readers might find this useful when thinking about information and technology related regulation.

U.S. government officials frequently advocate greater government transparency. Although, it is usually in the context of belittling some other government's information related practices, not those of U.S. government entities. Also, these criticisms often involve regulation of the tech sector. For example, Commerce Secretary Don Evans last week lambasted the People's Republic of China in a speech in Beijing for its lack of transparency in its patent process. He cited the case of China's denying Pfizer's patent application for the drug Viagra. He said that in China "the process for obtaining patents is not transparent or predictable".

In addition, the Office of the U.S. Trade Representative's (USTR) recently complained about China's lack of transparency in its decision making processes. It found in its December 13, 2004 report [90 pages in PDF] titled "2003 Report To Congress On China's WTO Compliance" that China has "a poor record of providing an opportunity for public comment before new or modified laws and regulations are implemented."

This USTR report continued that "Typically, the ministry or agency drafting a new or revised law or regulation consulted with and submitted drafts to other ministries and agencies, Chinese experts and affected Chinese companies. At times, it also consulted with select foreign companies, although it would not necessarily share drafts with them. As a result, only a small proportion of new or revised laws and regulations were issued after a period for public comment, and even in those cases the amount of time provided for public comment was generally too short." See also, story titled "USTR Releases 3rd Annual Report on WTO Compliance by PR China" in TLJ Daily E-Mail Alert No. 1,038, December 15, 2004.

See also, the USTR's December 18, 2003 report titled "2003 Report To Congress On China's WTO Compliance", and stories titled "USTR Complains About Lack of Transparency in the PR China" and "Commentary: Process and Transparency" in TLJ Daily E-Mail Alert No. 804, December 22, 2003.

The USTR also raises transparency issues with many other countries. Transparency is now typically the subject of free trade agreement negotiations.

Some readers may find Kohn's speeches irrelevant to technology law and policy, because he did not address regulation of the tech sector. Others may find them significant, for several reasons. First, he directs his analysis at a U.S. governmental entity. Second, his analysis is in depth, includes economic analysis, and considers the costs and benefits to public welfare. In contrast, when the USTR and Commerce Department discuss the lack of transparency, they typically focus on the unfairness of discrimination against U.S. companies, rather than the efficiency of markets. Third, some aspects of Kohn's analysis may be transferable to other government entities, including those that impact the technology sector, both as to their collection of information, and their dissemination of information.

Kohn (at right) stated in his January 9 speech that "markets work better ... with more information". Markets allocate resources, and information is needed to efficiently allocate these resources. And, he notes, the FRB is involved in the financial markets. It possesses information that is of interest to market participants. Hence, by conducting itself in a more transparent manner in providing both policy and economic forecast information, investors will have more information, and make more informed investment decisions. And then, markets will work better.

He also pointed out that government transparency in making information available takes on new importance as more individuals becoming investors. He added that "Technological change -- including the ubiquitous Internet -- has made it easier to cater to and feed this interest by making more information available more quickly and cheaply."

Kohn also conceded that "economists do not fully understand how markets incorporate information".

One example that Kohn used was the FRB's promptly making available the minutes of its Federal Open Market Committee (FOMC) meetings.

In the case of the technology sector, some government agencies hold no public meetings at which agency actions are substantively debated, adopt regulations but only release short press releases, or adopt regulations knowing that they bear a high probability of being overturned on judicial review. If one were to apply Kohn's analysis, these sorts of practices decrease transparency in the sense that they leave investors uncertain as to the regulatory environment in which technology companies operate. Hence, it might be argued that such practices impair the efficiency of investment in the tech sector, and the efficiency of resource allocations by tech companies.

In his long January 6 speech, Kohn covered many topics related to information and uncertainty at the FRB. He pointed out that, among other things, central banks work better, particularly in crises, the more information that they have. And, he said, central bankers are dependent upon a number of sources for their information, including sources in the private sector.

It might be argued that agencies that regulate various activities of the tech sector make decisions that allocate resources, limit the use of resources, and limit transactions. Yet, these agencies lack the collective information of the marketplace. To make efficient decisions, these agencies need to obtain information from tech companies, innovators, users, investors, and others. And, transparent decision and rule making processes tend to increase the information that is made available to such agencies. Without such transparency, agencies make less efficient decisions.

But, Kohn did not apply his analysis to anyone other than central bankers. And, it is beyond the scope of this article to review the many aspects of the decision making processes at tech related agencies in the U.S. and elsewhere that lack transparency.

Supreme Court Takes Case Involving Research Exemption to Patent Infringement

1/7. The Supreme Court granted certiorari in Merck KGaA v. Integra LifeSciences I. See, Order List [2 pages in PDF], at page 1. This is a drug patent case involving a research exemption to patent infringement. However, it is possible that the Supreme Court will issue an opinion that impacts research in other fields and technologies.

The U.S. Court of Appeals (FedCir) issued a divided opinion on June 6, 2003. Judge Randall Rader wrote the opinion of the Court, strictly construing Section 271(e)(1) of the Patent Act. Judge Pauline Newman dissented in part, emphasizing the underlying purposes of patent law; she would construe the statute more broadly, and recognize a meaningful common law research exemption. See also, the Court of Appeals' December 3, 2003 errata.

1/7. President Bush announced his intent to nominate Robert Zoellick (at right) to be Deputy Secretary of State. He is currently the U.S. Trade Representative (USTR). See, White House release. Bush stated at a White House event that "Condi Rice and Bob Zoellick will form one of the really strong, capable foreign policy teams our country has ever had. I've known Zoellick for a long time. He's a -- he is a fine public servant. I asked him to serve as our trade minister, and he did a fantastic job. And as he departs to the State Department, upon Senate confirmation, I want to assure the American people this administration is committed to free trade. I look forward to finding a replacement for Bob Zoellick that will be able to carry on our desire to spread free trade around the world." See, transcript.

1/7. Joseph Rolla, Peggy Focarino and John Doll were named Deputy Commissioners for Patents at the U.S. Patent and Trademark Office (USPTO), effective January 21, 2005. See, USPTO release. Rolla is currently a director in Technology Center 2600 (telecommunications). He will be Deputy Commissioner for Patent Examination Policy, and will be responsible for legal policy issues related to examining patent applications. Focarino is currently a director in Technology Center 2100 (computer architecture and software). She will be Deputy Commissioner for Patent Operations, and will oversee day to day management of the patent business. Doll is a special assistant to Under Secretary Jon Dudas. He will be Deputy Commissioner for Patent Resources and Planning, and will direct information processing and technology for the patent operation.

1/7. The Supreme Court granted certiorari in Grable & Sons Metal Products. v. Darue Engineering & Manufacturing. See, Order List [2 pages in PDF], at page 2. The issue in this case is what constitutes "arising under" the federal laws for the purposes of creating subject matter jurisdiction in the federal courts. The Supreme Court wrote that "The petition for a writ of certiorari is granted limited to Question 1 presented by the petition." Otherwise, this is a federal tax and quiet title action. See, March 9, 2004 opinion of the Court of Appeals. This case is Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, Sup. Ct. No. 04-603, on petition for writ of certiorari to the U.S. Court of Appeals for the 6th Circuit, App. Ct. No. 02-1678. The Court of Appeals heard an appeal from the U.S. District Court for the Western District of Michigan, at Grand Rapids, D.C. No. 01-00037, Judge David McKeague presiding.

1/7. The Supreme Court granted certiorari in Merck KGaA v. Integra LifeSciences I. See, Order List [2 pages in PDF], at page 1. This is a drug patent case involving a research exemption to patent infringement. There will be a story in the Tuesday edition of the TLJ Daily E-Mail Alert.

1/7. The City of Alexandria, Virginia, will begin a new shuttle bus service between the campus of the U.S. Patent and Trademark Office (USPTO) and Old Town Alexandria at 11:00 AM on Monday, January 10, 2005. Alexandria Mayor William Euille, Alexandria Transit Company General Manager Sandy Modell, and Deputy Under Secretary Steve of Commerce for Intellectual Property Steve Pinkos will ride on the shuttle's inaugural run. The bus will run every ten minutes between the USPTO campus and Old Town from 11:30 AM to 2:00 PM, Monday through Friday.

1/6. The Federal Communications Commission (FCC) announced the agenda [PDF] for its meeting of January 13, 2005. This will be the annual meeting on the state of the FCC. The FCC's agenda does not include any votes on initiating proceedings, or adopting rules. Rather, there will be four panel presentations by FCC staff.

Second, there will be a panel presentation by the Chief of the Wireless Telecommunications Bureau, the Chief of the Office of Engineering and Technology (OET), Ed Thomas, and the Chief of the International Bureau (IB), Donald Abelson.

Finally, there will be a panel presentation by the Chief of the Media Bureau, Ken Ferree, the General Counsel of the FCC, John Rogovin, and the Chief of the Wireline Competition Bureau (WCB), Jeffrey Carlisle.

This event will be held at 9:30 AM on Thursday, January 13, 2005 in the Commission Meeting Room, Room TW-C305, 445 12th Street, SW. The event will be webcast by the FCC. The FCC does not always take up all of the items on its agenda. The FCC does not always start its monthly meetings at the scheduled time. The FCC rarely releases the items that it adopts, until long after its meetings.

The listed Republican members are Joe Barton (R-TX), who is also the Chairman, Ralph Hall (R-TX), Michael Bilirakis (R-FL), Fred Upton (R-MI), Cliff Stearns (R-FL), Paul Gillmor (R-OH), Nathan Deal (R-GA), Edward Whitfield (R-KY), Barbara Cubin (R-WY), John Shimkus (R-IL), Heather Wilson (R-NM), Chip Pickering (R-MS), Vito Fossella (R-NY), Roy Blunt (R-MO), Steve Buyer (R-IN), George Radanovich (R-CA), Charles Bass (R-NH), Joseph Pitts (R-PA), Mary Bono (R-CA), Greg Walden (R-OR), Lee Terry (R-NE), Michael Ferguson (R-NJ), Mike Rogers (R-MI), Butch Otter (R-ID), Sue Myrick (R-NC), John Sullivan (R-OK), Tim Murphy (R-PA), Michael Burgess (R-TX), and Marsha Blackburn (R-TN).

The new Republican members are Myrick, Sullivan, Murphy, Burgess, and Blackburn.

The Republican members who served on the Committee during the 108th Congress who are not listed as members of the Committee for the 109th Congress are Billy Tauzin (R-LA), James Greenwood (R-PA), Richard Burr (R-NC), Charles Norwood (R-GA), Chris Cox (R-CA), John Shadegg (R-AZ), and Ernie Fletcher (R-KY).

Rep. Tauzin and Rep. Greenwood both retired. Burr won election to the Senate. Fletcher was elected to the office of Governor of Kentucky.

Rep. Cox was re-elected to the House. He is also the Chairman of the House Homeland Security Committee, which was just upgraded from being a select committee to a permanent committee. See, release. He cannot serve as both a committee chairman and as member of an A committee. However, at the end of his Chairmanship he can return to the House Commerce Committee. Also, he continues to accrue seniority on the Committee.

Rep. Shadegg won re-election in November. He is running for a position in the House Republican leadership -- Chairman of the House Republican Policy Committee. House members took the oath of office on Tuesday, January 4. He was not sworn in until Thursday, January 6. He expects to be renamed to the Commerce Committee.

Norwood, who received lung transplant in October, was re-elected. Norwood was not sworn in until Thursday evening, January 6.

The list includes Bill Thomas (R-CA), who is also the Chairman, Clay Shaw (R-FL), Nancy Johnson (R-CT), Wally Herger (R-CA), Jim McCrery (R-LA), Dave Camp (R-MI), Jim Ramstad (R-MN), Jim Nussle (R-IA), Sam Johnson (R-TX), Rob Portman (R-OH), Phil English (R-PA), JD Hayworth (R-AZ), Jerry Weller (R-IL), Kenny Hulshof (R-MO), Ron Lewis (R-KY), Mark Foley (R-FL), Kevin Brady (R-TX), Thomas Reynolds (R-NY), Paul Ryan (R-WI), Eric Cantor (R-VA), John Linder (R-GA), Melissa Hart (R-PA), Bob Beauprez (R-CO), and Chris Chocola (R-IN).

The members from the 108th Congress who are not on this list are Amory Houghton (R-NY), Jennifer Dunn (R-WA), Michael Collins (R-GA), and Scott McGinnis (R-CO).

Houghton, Dunn and McGinnis did not run for re-election. Collins ran unsuccessfully for the Republican nomination for the Senate race in Georgia in 2004.

1/6. The House approved HRes 32 and HRes 33, which name the Chairmen and ranking Democrats of House committees. Rep. Joe Barton (R-TX) and Rep. John Dingell (D-MI) return as Chairman and ranking Democrat on the House Commerce Committee. Rep. James Sensenbrenner (R-WI) and Rep. John Conyers (D-MI) return as the Chairman and ranking Democrat on the House Judiciary Committee. Rep. Chris Cox (R-CA) returns as Chairman of the House Homeland Security Committee. The new ranking Democrat of the Committee is Rep. Bennie Thompson (D-MS). He replaces Jim Turner (D-TX). Rep. Mike Oxley (R-OH) and Rep. Barney Frank (D-MA) return as the Chairman and ranking Democrat on the House Financial Service Committee. Rep. Bill Thomas (R-CA) and Rep. Charles Rangel (D-NY) return as the Chairman and ranking Democrat on the House Ways and Means Committee. Sherwood Boehlert (R-NY) and Rep. Bart Gordon (D-TN) return as the Chairman and ranking Democrat on the House Science Committee. Rep. Tom Davis (R-VA) and Rep. Henry Waxman (D-CA) return as the Chairman and ranking Democrat of the House Government Reform Committee.

1/6. The Senate approved SRes 5, and SRes 6, which make Republican and Democratic appointments to committees. The Senate Judiciary Committee's Republican members are Arlen Specter (R-PA), who is also the Chairman, Orrin Hatch (R-UT), Charles Grassley (R-IA), Jon Kyl (R-AZ), Mike DeWine (R-OH), Jeff Sessions (R-AL), Lindsey Graham (R-SC), John Cornyn (R-TX), Sam Brownback (R-KS), and Tom Coburn (R-OK). The Democratic members are Patrick Leahy (D-VT), who is also the ranking member, Ted Kennedy (D-MA), Joe Biden (D-DE), Herb Kohl (D-WI), Dianne Feinstein (D-CA), Russ Feingold (D-WI), Charles Schumer (D-NY), and Richard Durbin (D-IL). The new members are Brownback (although he was a member prior to the 108th Congress) and Coburn. The departing members are Saxby Chambliss (R-GA) and John Edwards (D-SC).

1/6. The Senate approved SRes 5, and SRes 6, which make Republican and Democratic appointments to committees. The Senate Finance Committee's Republican members are Charles Grassley (R-IA), who is also the Chairman, Orrin Hatch (R-UT), Trent Lott (R-MS), Olympia Snowe (R-ME), Jon Kyl (R-AZ), Craig Thomas (R-WY), Rick Santorum (R-PA), Bill Frist (R-TN), Gordon Smith (R-OR), Jim Bunning (R-KY), and Mike Crapo (R-ID). Its Democratic members are Max Baucus (D-MT), who is also the ranking member, Jay Rockefeller (D-WV), Kent Conrad (D-ND), James Jeffords (I-VT), Jeff Bingamon (D-NM), John Kerry (D-MA), Blanche Lincoln (D-AR), Ron Wyden (D-OR), and Charles Schumer (D-NY). Senators Crapo, Wyden and Schumer are new members for the 109th Congress. The departing members are Don Nickles (R-OK), Tom Daschle (D-SD), John Breaux (D-LA), and Bob Graham (D-FL).

1/6. The Senate approved SRes 5, and SRes 6, which make Republican and Democratic appointments to committees. The Senate Commerce Committee Republican members are Ted Stevens (R-AK), who is also the Chairman, John McCain (R-AZ), Conrad Burns (R-MT), Trent Lott (R-MS), Kay Hutchison (R-TX), Olympia Snowe (R-ME), Gordon Smith (R-OR), John Ensign (R-NV), George Allen (R-VA), John Sununu (R-NH), Jim DeMint (R-SC) and David Vitter (R-LA). The Democratic members are Daniel Inouye (D-HI), who is also the ranking member, Jay Rockefeller (D-WV), Byron Dorgan (D-ND), Barbara Boxer (D-CA), Bill Nelson (D-FL), Maria Cantwell (D-WA), Frank Lautenberg (D-NJ), Ben Nelson (D-NE), and Mark Pryor (D-AR). Senators DeMint, Vitter, Ben Nelson and Pryor are new members. The members from the 108th Congress who have left the committee are Senators Wyden, Breaux, Hollings, Brownback, and Fitzgerald.

1/6. The House and Senate met to count electoral votes. George Bush obtained a majority of the votes for President. Dick Cheney obtained a majority of votes for Vice President.

1/6. The Senate Commerce Committee unanimously approved (ordered favorably reported) the nomination of Carlos Gutierrez to be Secretary of Commerce. The full Senate may vote on the nomination as early as January 20, 2005.

1/6. The Health, Education, Labor, and Pensions Committee approved (ordered favorably reported) the nomination of Margaret Spellings to be Secretary of Education.

1/6. The Senate Agriculture Committee approved (ordered favorably reported) the nomination of Mike Johanns to be Secretary of Agriculture.

1/6. The U.S. Court of Appeals (FedCir) issued its opinion [21 pages in PDF] in NCR v. Palm, a patent infringement case involving handheld computer technology. NCR filed a complaint in U.S. District Court (DDel) against Palm and Handspring alleging infringement of two of its patents, U.S. Patent No. 4,634,845 titled "Portable personal terminal for use in a system for handling transactions", and U.S. Patent No. 4,689,478 titled "System for handling transactions including a portable personal terminal". The District Court granted summary judgment of noninfringement. The Court of Appeals affirmed. This case is NCR Corporation v. Palm Inc. and Handspring, Inc., U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 04-1093 , an appeal from the U.S. District Court for the District of Delaware. The Court also wrote that "this disposition is not citable as precedent".

1/6. The U.S. Court of Appeals (FedCir) issued its opinion [18 pages in PDF] in Business Object v. Microstrategy, a patent infringement case involving relational databases. Business Objects filed a complaint in U.S. District Court (NDCal) against Microstrategy alleging infringement of its U.S. Patent No. 5,555,403, titled "Relational database access system using semantically dynamic objects". The District Court entered summary judgment that MicroStrategy's products do not infringe claims 1, 2 and 4 of the patent, either literally or under the doctrine of equivalents. The Appeals Court affirmed in part and vacated in part. It wrote that "Because the district court did not err in construing the asserted claims, this court affirms the district court’s ruling of no literal infringement of claims 1, 2 and 4. Because the district court also did not err in holding that prosecution history bars Business Objects from asserting equivalents for claims 1 and 2, this court affirms that portion of the order as well. Because the district court erred in holding that an amendment to claim 4 during prosecution narrowed the scope of the claim, this court reverses the district court’s ruling that Business Objects is precluded from claiming equivalents of claim 4." This case is Business Objects, S.A. v. Microstrategy, Inc., U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 04-1009, an appeal from the U.S. Court of Appeals for the Northern District of California, Judge Charles Breyer presiding.