|House Subcommittee Holds
Hearing on FTC
|11/7. The House
Commerce Committee's Subcommittee on Commerce, Trade and
Consumer Protection held a hearing titled "Challenges
Facing the Federal Trade Commission". Timothy Muris,
the recently appointed FTC Chairman, was the only witness. He
used the occasion to outline his plans for the FTC.
Subcommittee members stated their views on various FTC related
Rep. Ed Markey
(D-MA) stated that "we must pass online privacy
legislation." He elaborated that "The FTC recently
announced that it was no longer going to recommend that
Congress pass a law to protect the privacy and freedom of
Americans on the Internet. Instead, the agency announced that
it would attempt, yet again, to get more of the online
industry to take voluntary actions to protect personal privacy
comprehensively. The Commission also indicated that it would
step up its enforcement action."
Rep. Markey continued: "I salute the laudable efforts of
certain sectors of the industry in trying to develop so called
self regulatory solutions to some of the privacy concerns that
many have expressed. These undertakings are critical to
increasing consumer confidence and trust in the medium, and
will be an important component in any comprehensive set of
privacy protections for consumers. Relying solely upon
voluntary industry efforts, however, will not suffice"
He concluded that "I do not accept the notion that the
Internet is too complex, and technology changing too rapidly
to develop enforceable privacy protections for consumers. As
technologies change, and business plans for online commerce
adjust, consumers' privacy protections remain a constant.
Again, consumers can negotiate in the market place for better
privacy protection if they can get it, but no consumer should
be without basic privacy protection, or without recourse to
redress grievances for harms caused by privacy
Dingell (D-MI), the ranking Democrat on the full
Committee, also used the hearing to advocate legislation to
protect privacy. He argued that it is necessary to protect
against identity theft. He stated that "Existing laws and
government resources simply cannot restrict broad access to
the personal information of consumers. ... Alone, neither
industry self regulation nor government can fully protect the
public against identity theft. The most effective weapon
against identity theft is to empower consumers with control
over their personal information, and how that information is
collected and disseminated. Armed with effective, enforceable
legal rights, the individual consumer would be able to manage
access to his or her personally identifiable information more
responsibly than government or industry."
Rep. Billy Tauzin
(R-LA) submitted a prepared
statement in which he addressed privacy. He commended
Muris for his "thoughtful examination of this complex
issue, as demonstrated by his recent speech
in Cleveland, which focused on rededicating the FTC's
attention and resources to enforcement issues, specifically
actions related to consumer privacy. Chairman Muris' focus on
enforcement is right on target." However, Rep. Tauzin
continued that "I do see a need to explore additional
legislative efforts that will help address an apparent failure
in the marketplace to protect consumers' privacy. Perhaps
there are some additional tools we can provide that will bring
confidence to consumers and the industry without unnecessarily
interfering with good business practices."
Rep. John Shimkus
(R-IL) used the occasion to discuss European Union's decisions
"to deny mergers that, in essence, we have approved here,
and, in essence, a competitive disadvantage placed upon the
United States and a lot of our fine companies because of the
EU application process, and the barriers that they are able to
drop without, in essence, a negotiation. We are then at a
Rep. Steve Buyer
(R-IN) tied together the antitrust law and cable TV rates. He
blamed the professional sports antitrust exemption for high
cable rates. "What is occurring today is, with baseball
as an example, Congress gives baseball an antitrust exemption.
The baseball owners then pay these outrageous salaries to
athletes, pay $250 Million to a short stop. And people go,
'how can an owner do that?' An owner can do that because he
takes those costs and passes them off to the programmers. And
then people don't know why their cable rates are going up.
They think cable rates are going up, Mr. Chairman, because of
infrastructure upgrades. Cable rates are going up because
sports programmers are taking advantage of consumers all
across the country. And, that Act is something that really
|FTC Chairman Muris
Testifies Before House Committee
|11/7. Muris submitted detailed prepared
testimony to the House
Commerce Committee's Subcommittee on Commerce, Trade and
Consumer Protection which outlined FTC goals in various
technology related areas, including competition policy, the
relation between antitrust and intellectual property law,
online privacy, and online fraud.
Competition Policy. Muris stated that "Our
competition mission will continue to reflect the following
widely shared consensus: (1) the purpose of antitrust is
to protect consumers; (2) the mainstays of antitrust
enforcement are horizontal cases - cases involving the
business relations and activities of competitors; (3) in light
of recent judicial decisions and economic learning,
appropriate monopolization and vertical cases are an important
part of the antitrust agenda; and (4) case selection should be
determined by the impact on consumers, guided by sound
economic and legal analysis, and made with careful attention
to the facts." He added that "Although there has
been much speculation about how the new Commission will regard
merger cases, this area is yet another in which continuity,
not change, will be the norm."
Intellectual Property. He stated that "In past
decades, our economy has become more knowledge based; for some
companies, patent portfolios represent far more valuable
assets than manufacturing or other physical facilities. Thus,
an increasing number of the FTC's competition matters require
the application of antitrust law to conduct relating to
intellectual property. Both antitrust and intellectual
property law share the common purposes of promoting innovation
and enhancing consumer welfare. On occasion, however, there
have been tensions in how to manage the intersection between
the doctrines, as well as questions about how best to spur
innovation through competition and intellectual property law
and policy. These issues may well merit broader and more
in-depth study. In addition, we continue to pursue
investigations involving intellectual property."
He also discussed the FTC's recent action against Dell. He
stated that "An example of our objectives in this area is
to ensure that patent holders do not improperly withhold
critical information from industry standard setting groups to
delay the creation of a standard or raise the price of
admission to its use."
Online Fraud. Muris stated that "The FTC will
continue to monitor rapidly evolving technologies used by scam
artists. The FTC has brought a number of cases involving scams
that depend on the special nature of technology."
Online Privacy. Muris reiterated that "A majority
of the Commission does not support online privacy legislation
at this time." However, his prepared testimony reviewed
existing laws regarding privacy that are being enforced by the
FTC, such as the Children's Online Privacy Protection Act.
|Trade Promotion Authority
|11/6. Rep. David
Bonior (D-MI) spoke in the House against granting the
President trade promotion authority, which is also know as
fast track. He stated that "fast track is the wrong issue
at the wrong time for the American people, and I hope my
colleagues will see to it, it never reaches this floor."
See, Congressional Record, November 6, 2001, at pages H7782-3.
11/6. Rep. Don
Manzullo (R-IL) stated in the House that "renewing
Trade Promotion Authority for the President is vitally
important for small business exporters." He is Chairman
of the House Small
Business Committee. See, Congressional Record, November 6,
2001, at page H7728.
Sherrod Brown (D-OH) also spoke in the House on trade
promotion authority. He stated that "The fact is, Western
business investors want to go to China, they want to go to
Indonesia; they want to go to countries which are
dictatorships, which have docile work forces, authoritarian
governments and they are very predictable for Western
investors. They do not go to India, they do not go to Taiwan,
not to South Korea; they do not want to stay in this country
many times because we have strong environmental laws, because
labor unions can organize and bargain collectively, because
good wages are paid, and because we have free elections. ...
Fast track should be defeated again in Congress this year.
Congressional Record, November 6, 2001, at page H7783-4.
|Senate Judiciary Committee
Holds Hearing on Rogan Nomination
|11/7. The Senate
Judiciary Committee held a hearing on the nomination of James
Rogan to be Director of the U.S. Patent and Trademark Office
Sen. Orrin Hatch
(R-UT), the ranking Republican on the Committee, praised Rogan,
and said he would work for his confirmation. Sen Hatch also
criticized the current practice of diverting USPTO user fees.
He stated that "The resources that support the Patent and
Trademark Office come entirely from user fees. But a large
portion of those user fees have been siphoned off to serve
other governmental purposes. This is a practice that I have
worked against together with Chairman Leahy over the
Rogan responded that "I can't tell you how the
administration is going to come down on this subject. What I
can tell you is that administration is committed to ensuring,
one way or another, that the USPTO has the appropriate funds
to do the job. So that, as you so rightly say, that the
examining members will be able to do their job, and help move
us into the 21st Century."
Sen. Dianne Feinstein
(D-CA) stated that the number of patent and trademark
applications and issues is increasing. She added that it is
now taking about 14 months to process a patent applications,
and 6 months to process a trademark registration request. She
asked, "How do you intend to address that situation,
which some have characterized as an impending crisis?"
Rogan responded, "I think that the first thing that the
next Director should do is deal with this exactly as you have
just said -- an impending crisis. In fact from the information
that I have seen from the Commerce Department, and from the
Patent and Trademark Office, paints even a more bleaker
picture than what you have just described. I think the average
pendency right now is about two and a half years, and by 2006
they expect that pendency rate to go to three and one half
years. That makes it very very difficult for entrepreneurs,
for investors, and for particularly, those that are investing
resources in high tech patents, to basically sit and wait and
and see if their investment is going to pay off. In a large
way we are a victim of our technological successes. Because,
as we move to more high tech patents, the examination process
becomes far more complex."
Rogan elaborated: "I read that one patent that was sent
over to the USPTO with background materials that filled up
twelve disks. It would be the equivalent of six million pages
of supporting material. These are very very technical issues,
and on top of that, we went into the problem of losing a very
highly trained examination corps to the private sector.
Whoever has the privilege of being confirmed by this body, and
to that position, is going to have to work hard first to see
that we have the resources to hire to retain qualified
examiners, and to find ways that we can give them more
flexibility in reviewing the materials that they have to go
to, so that we can turn out a quality product."
Tech Law Journal also spoke with Rogan after the hearing about
the Administration's position on USPTO funding. He stated that
"my understanding is that they are still studying the
issue, and the way in which they come down on it is still a
matter for discussion. I know that the President and the
Secretary of Commerce have committed to making sure that the
PTO is appropriately funded, so that the examiners can do
their job. My record in Congress was one that felt the way to
do that was from ending the diversion, and leaving it as
intended -- a fee based institution. I will be having a number
of discussions with the administration officials on that if I
Sen. Feinstein suggested that Rogan's experience in the House
"would put you in a rather unique position to do the
necessary lobbying for the funds you might require."
Rogan responded, "Yes and no. Madame Chairwoman, I think,
had I never served in the House, I would have perhaps
approached the job with the illusion that it would be easy to
talk to appropriators, to give up their power."
The hearing on Rogan's nomination was combined with a hearing
on several nominees to be U.S. District Court Judges. Sen.
Feinstein presided. Sen Hatch was the only other member to
participate in the part of the hearing dedicated to the Rogan
nomination. Sen. Patrick
Leahy (D-VT), the Chairman of the Committee, left before
the Committee took up the Rogan nomination. However, he did
say in his opening statement for the hearing that "I had
a productive meeting with Mr. Rogan a few weeks ago and have
spoken with Secretary Evans about this nomination. Senator
Feinstein and I both know the importance of intellectual
property to our economy and look forward to working with the
new Under Secretary in the days and months ahead."
Sen. Feinstein recited the many offices that Rogan has held,
including California prosecutor, judge, and Assemblyman, and
Majority Leader of the Assembly, as well as Member of the U.S.
House of Representatives, and its Judiciary Committee, and
Courts and Intellectual Property Subcommittee. Rogan
responded, "Of all those qualities that you have
articulated, the one that you left out is that I never showed
incredibly poor judgment of running for the U.S. Senate
against you. As you ponder my nomination, I hope you will keep
that in the back of your mind." She "warmly
welcome[d]" him to the hearing.
|House Passes USPTO
|11/6. The House passed HR 2047,
the Patent and Trademark Office Authorization Act of 2002.
This bill authorizes, but does not appropriate, funding for
the USPTO. Specifically,
it provides that "There are authorized to be appropriated
to the United States Patent and Trademark Office for salaries
and necessary expenses for fiscal year 2002 an amount equal to
the fees collected in fiscal year 2002". Hence, it
authorizes the ending of the diversion of USPTO user fees to
other government programs.
Ever year members of the House and Senate Judiciary
Committees, and other pro technology legislators, seek to end
the process of diverting USPTO fees. And every year they are
opposed by members of the House and Senate Appropriations
Committees. The Clinton administration also supported the
diversion. The Bush Administration has not yet taken a
position on this issue.
Several members of the House Judiciary
Committee, and others, used the time for debating HR 2047
to argue against the diversion of USPTO fees. Rep. Lamar Smith
(R-TX) said that "This extra funding will speed up the
processing of patent applications that now takes an average of
nearly 27 months. If these fees continue to be diverted,
pendency -- the time from filing to granting of a patent --
may increase to 38 months by 2006. In recent years, the number
of technology and biotechnology patents has increased. Now
more than ever, it's important to ensure that the PTO has
adequate funding through its own fee mechanisms. The PTO must
produce high quality patents on a timely basis. It is
struggling to keep up with the workload and lacks new
technology that is desperately needed to do its job."
Rep. Barney Frank
(D-MA) stated that "It should be noted that we raised
patent fees a few years ago. When we raised them, the
assumption, the implicit promise, was these fees would go to
improving the patent process. To take fees from people seeking
patents and diverting them to other purposes is a grave error.
We ought to be maximizing our ability to service the
innovators in this economy, and we do that by allowing these
fees to stay here."
Rep. John Conyers
(D-MI), the ranking Democrat on the Judiciary Committee,
stated that "The PTO cannot hire or retain qualified
patent examiners with advanced scientific degrees; they prefer
the more lucrative salaries in the private sector. The PTO
also cannot update its computer systems to thoroughly search
databases of information and determine whether patent
applications really disclose new and nonobvious inventions;
this makes it that more likely for the PTO to issue a bad
Rep. Howard Coble
(R-NC), the Chairman of the House Courts, Internet and
Intellectual Property Subcommittee, Rep. James
Sensenbrenner (R-WI), the Chairman of the full Committee,
and Rep. James Moran
(D-VA), also spoke in favor of the bill.
Sherrod Brown (D-OH) introduced HR 3235, a bill to provide
for compulsory licensing of certain patented inventions
relating to health care emergencies. It was referred to the House Judiciary
11/6. Sen. Max Baucus
(D-MT) introduced S 1636, Taiwan Free Trade Agreement Act
of 2001, a bill to authorize the negotiation of a Free Trade
Agreement with Taiwan, and to provide for fast track
congressional consideration of such an agreement. The bill was
referred to the Senate
Finance Committee, or which he is the Chairman.
|Thursday, Nov 8
|9:30 AM. The Federal
Communications Commission (FCC) will hold a meeting to
consider five items: (1) a Report and Order concerning
reexamination the Commercial Mobile Radio Services (CMRS)
spectrum aggregation limits and the cellular cross interest
rule (WT Docket No. 01-14); (2) a Notice of Proposed Rule
Making (NPRM) concerning whether to undertake a comprehensive
examination of its rules and policies of local radio ownership
(MM Docket No. 00-244); (3) a Memorandum Opinion and Order on
Reconsideration concerning its periodic review of the progress
of the conversion to digital television (MM Docket No. 00-39);
(4) a NPRM concerning the establishment of national
performance measurements and standards for unbundled network
elements and interconnection (CC Docket Nos. 98-56, 98-147,
98-147, 96-98, and 98-141); and a Report and Order concerning
its policies, rules and requirements for Cable Landing
Licenses (IB Docket No. 00-106). See, FCC
notice. Location: Commission Meeting Room, FCC, 445 12th
Street, SW, Room TWC305, Washington DC.
10:00 AM. The House Financial
Services Committee's Oversight and Investigations
Subcommittee and the House
Ways and Means Committee's Social Security Subcommittee
will hold a joint hearing titled Preventing Identity Theft
by Terrorists and Criminals. Location: Room 2128, Rayburn
10:00 AM. The Senate
Judiciary Committee will hold an executive business
meeting. The items on the agenda include consideration of S
986, a bill to allow media coverage of court
proceedings, and the nomination of Terry Wooten to be a
U.S. District Court judge for South Carolina. Location: Room
226, Dirksen Building.
12:15 PM. The FCBA's
Global Telecom Development Committee will host a brown bag
luncheon titled Telco Privatization: the Role of
International Financial Institutions. The speakers will be
David Satola (World Bank Group) and Janet Hernandez (Coudert
Bros.). RSVP to Kent
Bressie. Location: Wilkinson
Barker & Knauer, 2300 N Street, Suite 700, Washington
2:00 PM. The House
Judiciary Committee's Subcommittee on Courts, the
Internet, and Intellectual Property will hold an oversight
hearing titled Intellectual Property Litigation.
Location: Room 2141, Rayburn Building.
|Friday, Nov 9
|8:30 AM - 1:30 PM. The American
Enterprise Institute (AEI) and the Brookings Institute will
jointly host a conference titled "Practical Steps to
Spectrum Markets". See, online registration
page. See, agenda at right. Location: Wohlstetter
Conference Center, Twelfth Floor, 1150 17th Street, NW,
• 8:30 AM. Breakfast address by Sen. Ron Wyden (D-OR).
• 9:00 AM. Panel I: "Enabling Bandwidth
Markets". The speakers will be Thomas Hazlett (AEI),
Gregory Rosston (Stanford), Michelle Farquhar (Hogan &
Hartson), Evan Kwerel (FCC), and John Williams (FCC).
• 10:45 AM. Panel II: "Unblocking Spectrum
Allocation". The speakers will be Mike Chartier (Intel),
Joe Mitola (Mitre), DeWayne Hendricks (Dandin Group), and
Giancarlo Ibarguen (Francisco Marroquin Univ.).
• 12:15 PM. Luncheon address by Nancy Victory (NTIA).
10:00 AM. The House Government Reform Committee's Government
Efficiency, Financial Management, and Intergovernmental
Relations Subcommittee will hold a hearing titled Have
Federal Agencies Failed to Protect Their Computer Systems?
Room 2154, Rayburn Building.
|Saturday, Nov 10
|8:00 AM. There will be a press conference titled
Deliberation, Democracy & the Internet. For more
information, contact Lorie Slass, Annenberg Public Policy
Center of the University of Pennsylvania, 202 879-6701.
Location: Murrow Room, National Press Club, Washington DC.
|Monday, Nov 12
Day one of a three day meeting of the ICANN titled "Security
and Stability of the Internet Naming and Address Allocation
Systems". Location: Marina Beach Marriott,
Marina del Rey, California.
|People and Appointments
|11/6. The Senate confirmed Christina Armijo to be a
U.S. District Court Judge for New Mexico by a vote of 100 to
0. See, Roll
Call No. 325.
11/6. The Senate confirmed Karon Bowdre to be a U.S.
District Court Judge for Alabama by a vote of 98 to 0. See, Roll
Call No. 326.
11/6. The Senate confirmed Stephen Friot to be a U.S.
District Court Judge for Oklahoma by a vote of 98 to 0.
Call No. 327.
11/6. Nina Shafran was named Deputy Chief of the FCC's Mass Media Bureau's Audio
Services Division. She previously worked for the law firm of Dow Lohnes & Albertson.
Prior to that, she worked in the Washington DC office of the
law firm of O'Melveny &
Myers, and in the Washington DC office of the law firm of
Weil Gotschal & Manges. See, FCC
|House Adopts Anti Dumping
& Countervailing Duties Resolution
|11/7. The House passed HConRes 262 by a vote of 410 to 4.
Call No. 262. This is a concurrent resolution expressing
the sense of the Congress "that the President, at the WTO
round of negotiations to be held at Doha, Qatar, from November
9-13, 2001, and at any subsequent round of negotiations of the
WTO, should (1) preserve the ability of the
United States to enforce rigorously its trade laws, including
the antidumping and countervailing duty laws, and avoid
agreements which lessen the effectiveness of domestic and
international disciplines on unfair trade, especially dumping
and subsidies, in order to ensure that United States workers,
agricultural producers, and firms can compete fully on fair
terms and enjoy the benefits of reciprocal trade concessions;
and (2) ensure that United States exports are not subject to
the abusive use of trade laws, including antidumping and
countervailing duty laws, by other countries." The
resolution was introduced on November 6 by Rep. Phil English
(R-PA) and others.
|11/7. Sprint announced in a release
that it "plans to convert its existing digital circuit
switched network to a packet switched network beginning in
January 2003." Rep.
Bob Goodlatte (R-VA), a Co-Chair of the Internet Caucus,
praised the announcement. He stated that "Sprint LTD
currently serves nearly 8.3 million customers, many in my
Congressional district. This conversion from the existing
switched network to a packet switched network will improve
competition and lower prices by giving consumers in rural
areas a greater choice of high speed Internet, phone service,
and other telecommunications products and services. Sprint's
announcement will hasten the delivery of quality high speed
telecommunications services to the Shenandoah and Roanoke
11/7. The U.S. International
Trade Commission (USITC) began its Section 337 evidentiary
hearing regarding the importation of certain integrated
circuits. The complainants are United Microelectronics Corp.,
UMC Group (USA), and United Foundry Service, Inc. The
respondents are Silicon Integrated Systems Corp. and Silicon
Integrated Systems Corp. This investigation pertains to U.S.
Patents No. 5,559,352 and 6,117,345. See, Investigation
No. 337-TA-450. Administrative Law Judge Sidney Harris is
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