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June 15, 2005, 9:00 AM ET, Alert No. 1,154.
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Senate Subcommittee Holds Hearing on Injunctions in Patent Litigation

6/14. The Senate Judiciary Committee's Subcommittee on Intellectual Property held another hearing on reform of the Patent Act. This hearing was scheduled to obtain testimony on various proposals to revise the language in the Patent Act that provides for injunctive relief as a remedy for infringement of patents. See, 35 U.S.C. 283. However, the witnesses also testified, and the Senators asked questions, on a wide range of other patent issues.

There is considerable consensus among patent reform advocates on some reform issues, such as that the U.S. Patent and Trademark Office (USPTO) needs to be adequately funded, and that there should be some sort of administrative post grant review process. However, the subject of injunctive relief is both fundamental to patent law, and hotly debated. The witness panel reflected this division.

Two witnesses (Carl Gulbrandsen, who spoke on behalf of universities, and Jeffrey Kushan, who spoke on behalf of the pharmaceutical and biotech sectors) argued forcefully for the ready availability of injunctive relief when infringement has been shown. In contrast, other witnesses (such as Jonathan Band, who spoke on behalf of the financial services sector) argued equally forcefully against the current regime.

Sen. Orrin Hatch (R-UT), the Chairman of the Subcommittee, presided throughout the hearing. Sen. Patrick Leahy (D-VT) was also present for the full hearing. Sen. Ted Kennedy (D-MA), who is rarely involved in technology related issues, was present at the beginning of the hearing, made a brief statement about the importance of patent law, and then left shortly thereafter. No other Senators participated in the hearing. However, about twenty-five Senate staff members sat through the hearing.

Sen. Orrin HatchSen. Hatch (at right) read a long opening statement. He also stated later that he expects there to be a Senate bill, that it is a high priority, that he will work with Sen. Leahy and their counterparts in the House on a bipartisan basis, and that he is not committed to any position. At the end of the hearing he asked the witnesses to "help us get it right". He concluded, "we're doing the work of the Lord".

Sen. Leahy also read an opening statement. He said that "there is a very good chance that Senator Hatch and I will produce legislation that can reach the President's desk."

The Subcommittee heard testimony from six witnesses. See, prepared testimony of Carl Gulbrandsen (Wisconsin Alumni Research Foundation), prepared testimony of Jonathan Band (on behalf of Visa and the Financial Services Roundtable), prepared testimony of Mark Lemley (Stanford Law School), prepared testimony of Jeffrey Kushan (Sidley Austin, on behalf of pharmaceutical and biotech companies), prepared testimony of Chuck Fish (Time Warner), and prepared testimony of Jeffrey Hawley (Intellectual Property Owners Association).

For example, on the injunction issue, Band argued that "The possibility of a broad injunction and treble damages means that a financial services institution must take even the most frivolous patent infringement claim seriously. The current rules regarding injunctions and damages place all the leverage in the hands of the patent owner, even if the patent is extremely weak. If Congress does not correct the remedies under the patent law, the surge in the number of patents relating to financial services will lead to financial services institutions paying out ever-larger license fees to holders of suspect patents, to the detriment of our customers."

In contrast, Kushan argued that "Reforms that raise questions as to whether a patent owner will be able to prevent the unauthorized use of a patented invention, particularly after the patent has been fully adjudicated and found valid and infringed, will cause significant harm to the biotechnology and pharmaceutical sectors. Such reforms should not be included in any legislation that is designed to reflect a consensus reform package that will benefit all industries that use the patent system."

Sen. Hatch focused on the injunction issue during the question and answer session. He had staff display four huge exhibits containing the language of four alternatives:

1. the current statute
2. the language contained in the April committee print of the House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property (CIIP)
3. the language that Sen. Hatch identified as the "high tech" proposal
4.the language of the just introduced HR 2795.

He asked each of the witnesses to identify their choices.

The current statute provides that "The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable."

The CIIP Committee Print [52 pages in PDF] provides that "A court shall not grant an injunction under this section unless it finds that the patentee is likely to suffer irreparable harm that cannot be remedied by the payment of money damages. In making such a finding, the court shall not presume the existence of irreparable harm, but shall consider and weigh evidence that establishes or negates any equitable factor relevant to a determination of the existence of irreparable harm, including the extent to which the patentee makes use of the invention."

The "high tech" proposal provides that "The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable. Unless the court has made a determination that the infringement is willful, in determining equity the court shall consider the fairness of the remedy in light of all the facts, the relevant interests of the parties and the public associated with the invention."

HR 2795 [63 pages in PDF] provides that "In determining equity, the court shall consider the fairness of the remedy in light of all the facts and the relevant interests of the parties associated with the invention. Unless the injunction is entered pursuant to a nonappealable judgment of infringement, a court shall stay the injunction pending an appeal upon an affirmative showing that the stay would not result in irreparable harm to the owner of the patent and that the balance of hardships from the stay does not favor the owner of the patent.".

Gulbrandsen (university representative) and Kushan (pharmaceutical and biotech representative) defended the current statute.

Bond (financial services representative) stated that the CIIP committee print language is the best, while the current statute is the worst alternative of the four.

Lemley (law professor from Stanford) advocated the "high tech" proposal.

Hawley (as head of the diverse IPO) did not take a definitive position, but said that HR 2795 is an improvement on the CIIP committee print.

Fish (Time Warner) argued that the current language, but not the Federal Circuit's interpretation, needs no changes. He suggested that the Congress enact identical language, but this time, underline the words "may" and "principles of equity". He also suggested that the Congress could highlight these words in yellow.

Sen. Leahy asked witnesses whether the Congress should require that demand letters sent by patent holders to alleged infringers be detailed enough to support a petition for declaratory relief. Lemley, Hawley, Fish, and Bond expressed support for the requirement. Gulbrandsen was the sole dissenter. He said that such a requirement would lead to more litigation.

Sen. Hatch also raised the subject of forum shopping. Lemley said that "there is obviously forum shopping going on" and that the biggest problem is suits being filed in the U.S. District Court for the Eastern District of Texas. Bond suggested that there should be a requirement that either the plaintiff or defendant be located in the district where the suit is brought. Gulbrandsen quipped that venue should lie in Madison, Wisconsin.

Sen. Hatch and witnesses also discussed interlocutory appeals (that is, appeals of preliminary rulings, before final judgment). Bond argued that interlocutory appeals should be allowed after Markman hearings.

There was also much testimony and discussion of USPTO funding, treble damage awards, and apportionment of damages.

See also, story titled "House CIIP Subcommittee Holds Hearing on Patent Bill" in TLJ Daily E-Mail Alert No. 1,151, June 10, 2005; and story titled "Summary of the Committee Print of the Patent Act of 2005" in TLJ Daily E-Mail Alert No. 1,122, April 25, 2005.

APEC Statement Addresses Technology Related Trade Issues

6/14. Asia Pacific Economic Cooperation (APEC), which hosted a meeting of trade ministers in Cheju, Korea, on June 2-3, 2005, released a post meeting statement. It addresses several technology related topics, including duties on electronic transmissions, protection of intellectual property, and promoting the adoption of digital technologies.

Duties on Electronic Transmissions. The APEC statement provides that "We instructed officials to continue discussions on the proposal for a permanent WTO moratorium on customs duties on electronic transmissions. We noted the value of a permanent moratorium in creating a predictable investment environment for business and fostering innovation, while noting that these discussions must take due consideration of the positions any APEC economy may take in the WTO."

IPR Protection. The APEC statement provides that "We reaffirmed the important contribution of effective intellectual property rights (IPR) protection and enforcement in promoting investment, spurring innovation and driving economic growth, and reiterated the need to build on APEC's work already underway in this area."

It further provides that "We urged economies to take concrete steps to reduce trade in counterfeit and pirated goods, curtail online piracy, as well as to increase cooperation and capacity building. We therefore endorsed the APEC Anti-Counterfeiting and Piracy Initiative and instructed officials to intensify their work in the coming months to develop the guidelines called for in the Initiative as concrete deliverables for the November AMM. We stressed the need to provide capacity building and encouraged exchange of experience to strengthen intellectual property protection and enforcement cooperation among member economies. In this regard, we welcomed the APEC high-level symposium on IPR to be held in Xiamen, China in September this year."

Adoption of Digital Technologies. The APEC statement provides that "In today's global economy increasingly interconnected by technology, we recognise the importance of expanding and improving the digital capabilities and skills of all APEC Member economies. In this context, we acknowledged the progress made by the APEC Digital Opportunity Centre (ADOC) in bridging the digital divide and look forward to reviewing ADOC's accomplishments following its upcoming ADOC Trainers Program, ICT Elite Camp, and ADOC Week 2005. We are confident that such events will greatly enhance the ability of economies to participate in and contribute to the global economy, thus facilitating trade and investment."

It further provides that "We affirmed the expansion of trade in information and electronic products that has contributed to economic development in the Asia-Pacific region. We look forward to the APEC Seminar on IT/Electronics Industry to be held in September."

On June 14, the Office of the U.S. Trade Representative issued a release about the APEC meeting. It states that APEC statement includes "a comprehensive anti-counterfeiting and piracy initiative sponsored by the United States, Korea and Japan. The initiative calls for development of strong, regionwide measures by the end of the year to combat growing regional challenges of trade in counterfeit and pirated goods and on-line piracy".

The USTR release adds that "These measures will complement APEC economies' efforts to ensure effective enforcement of intellectual property rights and measurable results in reducing counterfeiting and piracy in their home markets."

See also, APEC release of June 3 on the anti-counterfeiting initiative.

People and Appointments

6/14. The Senate approved the nomination of Thomas Griffith to be Judge of the U.S. Court of Appeals for the DC Circuit by a vote of 73-24. See, Roll Call No. 136. President Bush commended the Senate in a release. He added that " I look forward to the Senate's prompt consideration and up-or-down votes for my other judicial nominees." President Bush also gave a speech on June 14, 2005 in which he referenced judicial appointments. He said that "the American people made it clear they want judges who faithfully interpret the law, not legislate from the bench. I applaud Senator Frist and Senator Specter and Senator Hatch and other members of the United States Senate in confirming some outstanding nominees who have waited a long time for a vote: Priscilla Owen and Janice Rogers Brown and Bill Pryor. I'll continue to urge the Senate to fulfill its constitutional responsibility by giving every judicial nominee an up or down vote on the Senate floor."

6/14. President Bush nominated Margaret Mary Sweeney to be a Judge of the U.S. Court of Federal Claims for a term of fifteen years. See, White House release.

6/14. President Bush nominated Thomas Craig Wheeler to be a Judge of the U.S. Court of Federal Claims for a term of fifteen years. See, White House release.

More News

6/14. The Senate Homeland Security and Governmental Affairs Committee held a hearing on the Bush administration's program titled "Strategy Targeting Organized Piracy" or "STOP". See, prepared testimony [PDF] of  Jon Dudas (Director of the U.S. Patent & Trademark Office), prepared testimony [PDF] of Victoria Espinel (acting Assistant U.S. Trade Representative for Intellectual Property), prepared testimony [PDF] of Daniel Baldwin (acting Assistant Commissioner of the Office of Strategic Trade, U.S. Department of Homeland Security), prepared testimony [PDF] of Laura Parsky (Deputy Assistant Attorney General in the Criminal Division of the Department of Justice), prepared testimony [PDF] of Loren Yager (General Accounting Office), prepared testimony [PDF] of Brad Huther (U.S. Chamber of Commerce), prepared testimony [PDF] of Franklin Vargo (National Association of Manufacturers), and prepared testimony [PDF] of Jeffrey Evans (P/CEO of The Will-Burt Company).

6/14. The Federal Communications Commission released the text [44 pages in PDF] of its Declaratory Ruling (DR) and Notice of Proposed Rulemaking (NPRM) regarding implementation of the Commercial Spectrum Enhancement Act (CSEA). It adopted this item at its meeting of June 9, 2005. See also, story titled "FCC Adopts DR and NPRM Regarding CSEA Implementation" in TLJ Daily E-Mail Alert No. 1,152, June 13, 2005. This item is FCC 05-123 in WT Docket No. 05-211. Comments on the NPRM will be due 30 days after publication of a notice in the Federal Register. Reply comments will be due within 45 days. This publication has not yet taken place.

6/14. President Bush gave a speech on June 14, 2005 in which he stated that "I call upon the United States Congress to renew all the provisions of the Patriot Act. The Patriot Act is an important piece of legislation. It gives those folks who are on the front line of fighting terror the same tools -- many of the same tools that are used to track down drug kingpins or tax cheats. If those tools are good enough to track down drug kingpins, they ought to be good enough in this war on terror to give to our law enforcement so we can better defend this country."

Washington Tech Calendar
New items are highlighted in red.
Wednesday, June 15

The House will meet at 10:00 AM for legislative business. It will continue its consideration of HR 2862, the "Science, the Departments of State, Justice, and Commerce, and Related Agencies Appropriations Act for Fiscal Year 2006". It may also begin consideration of HR 2863, the "Department of Defense Appropriations Act for Fiscal Year 2006". See, Republican Whip Notice.

The Senate will meet at 9:30 AM. It will resume consideration of HR 6, the energy bill.

The Supreme Court will next meet on Monday, June 20.

10:30 AM. The House Ways and Means Committee will hold an "Informal Markup of Implementing Proposal of H.R. ____, the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act". Location: Room 1100, Longworth Building.

12:00 NOON - 2:00 PM. The DC Bar Association will host a program titled "An Introduction to Copyright Law". The price to attend ranges from $25-$35. For more information, contact 202-626-3463. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

2:00 PM. The House Commerce Committee's (HCC) Subcommittee on Subcommittee on Commerce, Trade, and Consumer Protection will hold a hearing titled "Product Counterfeiting: How Fakes Are Undermining U.S. Jobs, Innovation, and Consumer Safety". See, notice. The hearing will be webcast by the HCC. Location: Room 2123, Rayburn Building.

Thursday, June 16

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

8:30 AM - 5:30 PM. The National Science Foundation's (NSF) Advisory Committee for International Science and Engineering will meet. See, notice in the Federal Register, June 1, 2005, Vol. 70, No. 104, at Pages 31545 - 31546. Location: NSF, 4201 Wilson Boulevard, Room 730, Arlington, VA.

9:00 AM - 4:30 PM. Day one of a two day conference hosted by the University of Maryland University College (UMUC) titled "Pirates, Thieves and Innocents: Perceptions of Copyright Infringement in the Digital Age". Registration has closed. The event will be webcast. See, webcast registration page. Location: UMUC, 3501 University Blvd. East, Adelphi, MD.

9:30 AM - 12:00 NOON. The Federal Communications Commission's (FCC) WRC-07 Advisory Committee's Informal Working Group 4 (Broadcasting and Amateur Issues) will meet. See, notice [PDF]. Location: Shaw Pittman & Pillsbury, 2300 N Street, NW, Conference Room 1E/F.

9:30 AM. There will be a news conference titled "US-Brazil Trade Relations". For more information, call John Proctor at Direct Communications Group at 202 272-2179. Location: Zenger Room, National Press Club, 529 14th St. NW, 13th Floor.

10:00 AM. The Senate Commerce Committee will hold a hearing on federal legislative solutions to data breach and identity theft. Sen. Gordon Smith (R-OR) will preside. The witnesses will be the five Commissioners of the Federal Trade Commission (FTC), Deborah Majoras, Orson Swindle, Thomas Leary, Pamela Harbour, and Jonathan Leibowitz, and William Sorrell (Vermont Attorney General, and President of the National Association of Attorneys General). Press contact: Melanie Alvord (Stevens) at 202 224-8456 or Melanie_Alvord at commerce dot senate dot gov, or Andy Davis (Inouye) at 202 224-4546 or Andy_Davis at commerce dot senate dot gov. See, notice. Location: Room 253, Russell Building.

2:00 AM. The Senate Appropriations Committee will meet to mark up HR 2360, the Department of Homeland Security appropriations bill. Location: Room 106, Dirksen Building.

2:30 PM. The Senate Commerce Committee will hold a hearing on the nominations of William Jeffrey (to be Director of the National Institute of Standards and Technology), Ashok Kaveeshwar (Administrator of the Research and Innovative Technology Administration), Edmund Hawley (Assistant Secretary of Homeland Security for the Transportation Security Administration), and Israel Hernandez (Assistant Secretary of Commerce and Director General of the U.S. Foreign and Commercial Service). Press contact: Melanie Alvord (Stevens) at 202 224-8456 or Melanie_Alvord at commerce dot senate dot gov, or Andy Davis (Inouye) at 202 224-4546 or Andy_Davis at commerce dot senate dot gov. Location: Room 253, Russell Building.

TIME? The Department of State's International Telecommunication Advisory Committee's (ITAC) ITU-T Study Group 3 (Tariff and accounting principles including related telecommunication economic and policy issues) will meet. See, notice in the Federal Register, June 7, 2005, Vol. 70, No. 108, at Page 33253. Location: AT&T, 1133 21st Street, Suite 210.

6:00 - 8:30 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host an event titled "Happy Hour". For more information, contact Debrea Terwilliger at 202 383-3349 or debrea dot terwilliger at wbklaw law com or 202-393-3000. Location: Topaz Hotel, Zen Den, 1733 N St., NW.

Deadline to submit comments, and notices of intent to participate, to the Copyright Office in response to its proposed rules containing a proposed settlement of royalty rates for the retransmission of digital over the air television broadcast signals by satellite carriers under the statutory license. See, notice in the Federal Register, May 17, 2005, Vol. 70, No. 94, at Pages 28231 - 28233.

Friday, June 17

8:30 AM - 12:00 NOON. Day two of a two day meeting of the National Science Foundation's (NSF) Advisory Committee for International Science and Engineering. See, notice in the Federal Register, June 1, 2005, Vol. 70, No. 104, at Pages 31545 - 31546. Location: NSF, 4201 Wilson Boulevard, Room 730, Arlington, VA.

9:00 AM - 3:00 PM. Day two of a two day conference hosted by the University of Maryland University College (UMUC) titled "Pirates, Thieves and Innocents: Perceptions of Copyright Infringement in the Digital Age". Registration has closed. The event will be webcast. See, webcast registration page. Location: UMUC, 3501 University Blvd. East, Adelphi, MD.

Deadline to submit comments to the Antitrust Modernization Commission (AMC) in response to the AMC's request for public comments regarding (1) treble damages, (2) prejudgment interest, (3) attorneys' fees, (4) joint and several liability, contribution, and claim reduction, (5) remedies available to the federal government, (6) private injunctive relief, and (7) indirect purchaser litigation. See, notice in the Federal Register: May 19, 2005, Vol. 70, No. 96, at Pages 28902-28907.

Monday, June 20

The Supreme Court will return from recess. See, Order List [11 pages in PDF], at page 11.

The annual U.S.-EU Summit will take place. See, White House release. Location: Washington DC.

10:00 AM. Kevin Ring (author of Scalia Dissents : Writings of the Supreme Court's Wittiest, Most Outspoken Justice), Herman Schwartz (American University Law School) and Mark Tushnet (Georgetown University Law School) will participate in a panel discussion regarding Supreme Court developments. Location: Zenger Room, National Press Club, 529 14th St. NW, 13th Floor.

12:30 PM. Rep. Mel Watt (D-NC), a member of the House Judiciary Committee, will give a luncheon address. Location: Ballroom, National Press Club, 529 14th St. NW, 13th Floor.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) [15 pages in PDF] regarding implementation of the satellite broadcast carriage requirements in the noncontiguous states, as required by Section 210 of the Satellite Home Viewer Extension and Reauthorization Act of 2004 (SHVERA). The FCC adopted this NPRM at its April 29, 2005 meeting. This NPRM is FCC 05-92 in MB Docket No. 05-181. See, notice in the Federal Register, May 20, 2005, Vol. 70, No. 97, at Pages 29252-29253.

Tuesday, June 21

12:15 PM. The Federal Communications Commission (FCC) will hold a meeting titled "Current Status of FCC Proceedings Involving VOIP and other IP Enabled Services". The speaker will be Thomas Navin, Chief of the FCC's Wireline Competition Bureau. The FCC's proceedings are titled "In the Matter of IP-Enabled Services" (WC Docket No. 04-36), and "E911 Requirements for IP-Enabled Service Providers" (WC Docket No. 05-196). For more information, contact Catherine Bohigian at catherine.bohigian@fcc.gov or Frank Lloyd at flloyd@mintz.com. The Federal Communications Bar Association (FCBA) states that this is a meeting of its Cable Practice Committee, and requests an RSVP to Wendy Parish at wendy@fcba.org. Location: Mintz Levin, 701 Pennsylvania Ave., NW , 9th Floor.

Wednesday, June 22

10:00 AM. The Senate Commerce Committee will hold a hearing on telecom mergers. See, notice. Press contact: Melanie Alvord (Stevens) at 202 224-8456 or Melanie_Alvord at commerce dot senate dot gov, or Andy Davis (Inouye) at 202 224-4546 or Andy_Davis at commerce dot senate dot gov. Location: Room 253, Russell Building.

12:00 NOON - 2:00 PM. The U.S. Chamber of Commerce's National Chamber Foundation (NCF) will host a luncheon titled "The Effect of Municipal Broadband Networks on Competition". The speakers will include David Hirschmann (NCF), Jim Kovacs (US Chamber), Dianah Neff (City of Philadelphia), Jim Speta (Northwestern University), and Jim Baller (Baller Herbst Law Group). The price to attend ranges from free to $115. See, notice and agenda [PDF]. Location: US Chamber, 1615 H Street, NW.

RESCHEDULED FROM MAY 11. The Federal Communications Bar Association (FCBA) will host a continuing legal education (CLE) seminar on voice over internet protocol (VOIP). See, registration form [PDF]. Location: Skadden Arps, 700 14th Street, NW.

EXTENDED TO JULY 20. Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking (FNPRM) regarding its intercarrier compensation system. This FNPRM is FCC 05-33 in CC Docket No. 01-92. The FCC adopted this FNPRM at its meeting of February 10, 2005, and released it on March 3, 2005. See, notice in the Federal Register, March 24, 2005, Vol. 70, No. 56, at Pages 15030 - 15044. See also, story titled "FCC Adopts FNPRM in Intercarrier Compensation Proceeding" in TLJ Daily E-Mail Alert No. 1,076, February 14, 2005.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Public Notice [10 pages in PDF] regarding video news releases (VNRs). This notice is FCC 05-84 in MB Docket No. 05-171.

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