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October 3, 2007, Alert No. 1,650.
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GAO Reports that Lack of Funding and Brain Drain Cause Patent Application Backlog

10/4. The Government Accountability Office (GAO) released a report [43 pages in PDF] titled "U.S. Patent and Trademark Office: Hiring Efforts Are Not Sufficient to Reduce the Patent Application Backlog".

The report finds that there is a large and growing backlog of patent application at the U.S. Patent and Trademark Office (USPTO). The USPTO is hiring more patent examiners, but it is constrained by funding limitations. Also, the report finds that the USPTO is losing many young examiners, in part because USPTO production goals lead examiners to work overtime and while on leave.

The report does not address Congressional diversion of USPTO fees to subsidize other government programs.

The GAO report states that "increases in both the volume and complexity of patent applications have lengthened the amount of time it takes the agency to process them. As a result, the inventory of patent applications that have not yet been reviewed, called the backlog, has been growing for over 15 years -- since fiscal year 2002 alone, the backlog has increased by nearly 73 percent to about 730,000 applications."

The report finds that "the patent application backlog has continued to increase, and it is unlikely that the agency will be able to reduce the backlog simply through its hiring efforts."

"From 2002 through 2006, patent examiner attrition has continued to significantly offset USPTO's hiring progress." It adds that the "USPTO hired 3,672 patent examiners between 2002 and 2006, and 1,643 patent examiners left the agency during this time."

Moreover, the report adds that young examiners are the most likely to leave.

The report also discusses possible causes. It states that USPTO management asserts that examiners leave for personal reasons, while "union officials told us that attrition can primarily be attributed to the insufficient amount of time provided to patent examiners to meet their production goals." The report states that its own survey supports the union viewpoint.

It also states that "to meet their production goals, the majority of patent examiners had to work substantial unpaid overtime in the last 12 months, while many others worked while on annual leave."

The report states that "funding levels" limit how many examiners the USPTO can hire.

The report was prepared for Rep. Tom Davis (R-VA), the ranking Republican on the House Oversight and Government Reform Committee. Rep. Davis stated in a release that "Everyone needs to understand that the diversion of fees from USPTO to other government programs helped create this problem."

He also commented that the USPTO "has been unable to effectively combat its brain drain."

Net Neutrality Proponents Seek Congressional Hearings

10/3. The Open Internet Coalition (OIC) sent letters to the Chairmen and ranking Republicans on the House and Senate Judiciary and Commerce Committees asking them to hold hearings on "recent anti-consumer and anti-free speech actions by Verizon, AT&T and Comcast". See, for example, letter to Rep. John Dingell (D-MI), Chairman of the House Commerce Committee.

The members of the OIC include Earthlink, Google, eBay, PayPal, Skype, Tivo, and YouTube. The OIC wants the Congress or Federal Communications Commission (FCC) to impose network neutrality mandates on broadband service providers.

The letter asserts that recently "several industry members have taken blatantly anti-consumer actions that call into question the industry’s commitment to serving the interests of consumers." It argues that these actions "demonstrate that the telephone and cable companies should not be trusted to safeguard our basic Internet freedoms. For two years, we have urged Congress to adopt legislation that would preserve an open and interconnected Internet ... Now, more than ever, the open Internet is increasingly threatened by telephone and cable companies who enjoy the public rights of way to provide Internet access to consumers' homes."

The OIC letter states that hearings should "explore the activities of the telephone companies and consider legislation that would protect a fundamental tenet of the Internet, which is to allow citizens to communicate without threat of censorship or other anti-consumer behavior from a handful of gatekeepers."

The OIC's allegation against Verizon relates to text messaging by an abortion policy group. See also, story titled "Verizon Wireless and Net Neutrality Advocates Clash Over Text Messaging" in TLJ Daily E-Mail Alert No. 1,647, September 27, 2007.

The OIC's allegation against AT&T is that it "censored a live Webcast of a Pearl Jam concert when the lead singer made statements that were critical of the Bush Administration".

Finally, the OIC alleged that Comcast "has cut off Internet customers who the company said were using too much capacity".

SEC Commissioner Discusses Internet Based Fraud

10/1. Securities and Exchange Commission (SEC) Commissioner Kathleen Casey gave a speech in Seattle, Washington, in which she discussed internet intrusion fraud, and use of the internet in pump and dump and Ponzi schemes.

Kathleen Casey

Casey (at right) said that "Our internet enforcement group was among the first to discover a new trend in internet-based fraud that has been dubbed the ``intrusion´´ cases."

She explained that "In these cases the perpetrator, sometimes affiliated with a foreign crime syndicate, hacks into an online brokerage account and places purchase orders for large blocks of relatively obscure or lightly traded stocks. The perpetrator then sells this same stock in his own account, quickly posting thousands of dollars in paper gains. The owner of the intruded account is left with a depleted bank account and shares of worthless stock."

She said that Ponzi schemes have been around for almost 100 years, and "despite the enactment of several major laws, the creation of the SEC, the hiring and training of thousands of investigators and prosecutors, and the proliferation of investor education and alerts, Ponzi's scheme survives."

"Perhaps the internet or other new technologies have made it possible to disguise these schemes or employ ever more enticing sales pitches; perhaps it's the greater access to the marketplace brought about by the internet and it's low barriers to entry for those with a sinister idea and a laptop", said Casey.

She also said that "globalization of our markets, fueled by technological innovation, continues to diminish the relevance of geographical boundaries that have historically defined and dictated our approach to regulation".

GAO Finds FCC Gives Some Stakeholders Nonpublic Information

10/3. The Government Accountability Office (GAO) released a report [43 pages in PDF] titled "Telecommunications: FCC Should Take Steps to Ensure Equal Access to Rulemaking Information".

This report describes the Federal Communications Commission's (FCC) rule making process, and focuses on just one aspect of the the FCC's lack of transparency -- that "some stakeholders had access to nonpublic information that could give them an advantage in the rulemaking process".

The report states that the GAO interviewed stakeholders who participated in several rulemaking proceedings. It relates that "we also were told by 9 of 12 stakeholders -- both those involved with our case studies and stakeholders who regularly participated in FCC rulemakings -- that they knew when proposed rules were scheduled for an upcoming vote well before FCC released the agenda to the public because they hear this information from FCC bureau staff and commissioner staff. This advance information is not supposed to be disclosed outside of FCC."

It continues that "Once the agenda is public, FCC rules generally prohibit stakeholders from lobbying FCC. As a result, stakeholders with advance information about which rules are scheduled for a vote would know when it may be most effective to present their arguments to FCC, while stakeholders without access to this information may not."

The report also notes that not all ex parte filings comply with the FCC's ex parte rules.

The report was prepared for Rep. Ed Markey (D-MA), Chairman of the House Commerce Committee's (HCC) Subcommittee on Telecommunications and the Internet.

He issued a release that states that the GAO report shows that FCC information "is often leaked to corporate insiders long before it becomes public".

Rep. Markey wrote that "The FCC has a duty to be above-board in developing and implementing its rules. When the `corporate insiders´ and `K-Street´ crowd have the inside track on decisions critical to telecommunications, media, broadband or wireless policy, then the public and consumers, are at an inherent disadvantage. Both the law and the public interest, require that rulemaking decisions adhere to principles of openness and objectivity."

He continued that "The good news is that the FCC has rules against disclosing inside information before everyone knows it publicly. The bad news is that it appears violations of such rules are a daily reality at the FCC. I believe the FCC should take immediate steps to protect the integrity of its rulemaking process. The public deserves to know that these decisions are made on the up-and-up, with no unfair advantage to any one side in these important policy debate".

There are many other procedures employed by the FCC that are not covered by this report that also reduce the transparency of its proceedings.

For example, while the FCC publishes an agenda of its meetings one week before the scheduled time of the meeting, it rarely follows that agenda. It adds and deletes items without providing the required one week notice. Also, the FCC often does not hold its meeting at the scheduled time, and reschedules without one week notice.

The FCC rarely releases the text of its reports, orders, memoranda, notices at the time that it adopts them. Information about the contents of its adopted items is disseminated by means other that the public release of the items.

FCC officials involved in open rule making proceedings sometimes speak at events regarding those proceedings. These officials sometimes disclose information about those proceedings and/or receive oral comments from interested parties. The FCC does not apply its written comment or ex parte rules or the Administrative Procedure Act to these meetings on the basis that these are public events. However, not all such meetings are public. For example, reporters are sometimes excluded.

Supreme Court News

10/1. The Supreme Court of the US (SCUS) denied certiorari Hynix Semiconductor v. Rambus, a patent infringement case. This is Sup. Ct. No. 06-1681. See, Orders List [83 pages in PDF] at page 13.

10/1. The Supreme Court of the US (SCUS) denied certiorari in Gersh Korsinsky v. USPTO, a case regarding the consequences of failure to timely pay patent maintenance fees. This is Sup. Ct. No. 07-185. See, Orders List [83 pages in PDF] at page 46, and April 5, 2007, opinion [7 pages in PDF] of the U.S. Court of Appeals (FedCir), App. Ct. No. 2007-1029.

10/1. The Supreme Court of the US (SCUS) denied certiorari in Pfizer v. Apotex, a case involving an Abbreviated New Drug Application (ANDA). This case is Sup. Ct. No. 06-1582. The SCUS's Orders List [83 pages in PDF] at page 74 states that "The motion of Washington Legal Foundation for leave to file a brief as amicus curiae is granted. The petition for a writ of certiorari is denied. The Chief Justice took no part in the consideration or decision of this motion and this petition." See also, March 22, 2006, opinion [41 pages in PDF] of the U.S. Court of Appeals (FedCir), App. Ct. No. 2006-1261

10/1. The Supreme Court of the US (SCUS) denied certiorari in Official Committee v. Adelphia Communications, Sup. Ct. No. 06-1586. The SCUS's Orders List [83 pages in PDF] at page 74 states that "The petition for a writ of certiorari is denied. Justice Breyer took no part in the consideration or decision of this petition."

10/1. The Supreme Court of the US (SCUS) denied certiorari in Teva Pharmaceuticals v. Eli Lilly, Sup. Ct. No. 06-1642. See, Orders List [83 pages in PDF] at page 74.

10/1. The Supreme Court of the US (SCUS) denied certiorari in Systems Unlimited v. Cisco Systems, Sup. Ct. No. 07-30. The Orders List [83 pages in PDF] at page 76 states that "The petitions for writs of certiorari are denied. Justice Breyer took no part in the consideration or decision of these petitions."

Washington Tech Calendar
New items are highlighted in red.
Friday, October 5

The House will meet at 3:00 PM.

The Senate will meet in pro forma session only.

9:00 - 11:00 PM. The American Enterprise Institute (AEI) will host a panel discussion Stoneridge Investment v. Scientific Atlanta. The Supreme Court will hear oral argument on October 9, 2009. See also, story titled "story titled "Supreme Court to Consider 10b Liability of Stock Issuers' Vendors" in TLJ Daily E-Mail Alert No. 1,625, August 21, 2007. The speakers will be Louis Bograd (Center for Constitutional Litigation), Jonathan Cuneo (Cuneo Gilbert & LaDuca), Theodore Frank (AEI), Robert Gasaway (Kirkland & Ellis), Harvey Pitt (Kalorama Partners), and Michael Greve (AEI). See, notice. Location: AEI, 12th floor, 1150 17th St., NW.

Day two of a four day convention of the Society of Professional Journalists (SPJ). At 10:00 - 11:15 AM there will be a panel titled "Jailed on the Job: Do We Need a National Shield Law". The speakers will be Mike Walter (WUSA anchor), Randall Eliason (American University), Eve Burton (General Counsel of the Hearst Corporation), Jim Taricani (WJAR reporter), and Bruce Sanford (Baker Hostetler). See, conference web site. Location: Hyatt Regency Capitol Hill, 400 New Jersey Ave., NW.

Deadline to submit comments to the Department of Commerce's (DOC) Bureau of Industry and Security (BIS) regarding the foreign policy based export controls in the Export Administration Regulations to determine whether they should be modified, rescinded or extended. See, notice in the Federal Register, September 5, 2007, Vol. 72, No. 171, at Pages 50912-50913.

Saturday, October 6

Day three of a four day convention of the Society of Professional Journalists (SPJ). At 9:45 - 10:45 AM, Leonard Downey, Editor of the Washington Post, will speak. At 12:00 NOON - 12:30 PM Ryan Cox (Media Bloggers Association) will give a speech titled "Blogger and Journalists: Friends or Foes". See, conference web site. Location: Hyatt Regency Capitol Hill, 400 New Jersey Ave., NW.

Sunday, October 7

Day four of a four day convention of the Society of Professional Journalists (SPJ). See, conference web site. Location: Hyatt Regency Capitol Hill, 400 New Jersey Ave., NW.

Monday, October 8

Columbus Day.

The Federal Communications Commission (FCC) and other federal offices will be closed. See, Office of Personnel Management's (OPM) list of federal holidays and 5 U.S.C. § 6103.

Tuesday, October 9

The Supreme Court of the U.S. (SCUS) will hear oral argument in Stoneridge Investment v. Scientific Atlanta, Sup. Ct. No. 06-43. See, SCUS docket, and story titled "Supreme Court to Consider 10b Liability of Stock Issuers' Vendors" in TLJ Daily E-Mail Alert No. 1,625, August 21, 2007.

6:00 - 9:00 PM. The DC Bar Association will host a continuing legal education (CLE) program titled "Beginner's Guide to Publishing Law and Publishing Agreements". It will cover, among other topics, Google's book program and internet publishing. The speaker will be Gail Ross (Lichtman Trister & Ross). The price to attend ranges from $80 to $115. For more information, call 202-626-3488. See, notice. Location: DC Bar Conference Center, B-1 Level, 1250 H St., NW.

2:00 - 4:00 PM. The House Science Committee's (HSC) Subcommittee on Research and Science Education Subcommittee will hold a hearing titled "Assessment of the National Science Board’s Action Plan for STEM Education". The HSC will webcast this hearing. Location: Room 2318, Rayburn Building.

Deadline to submit comments to the U.S. Patent and Trademark Office (USPTO) in response to its notice of proposed rulemaking (NPRM) regarding revising its rules of practice pertaining to any claim using alternative language to claim one or more species. See, notice in the Federal Register, August 10, 2007, Vol. 72, No. 154, at Pages 44992-45001.

Extended effective date of the Federal Communications Commission's (FCC) rule that requires local exchange carriers (LECs), including incumbent LECs and competitive LECs, and commercial mobile radio service (CMRS) providers to have an emergency backup power source "for all assets that are normally powered from local AC commercial power, including those inside central offices, cell sites, remote switches and digital loop carrier system remote terminals." See, notice in the Federal Register, August 10, 2007, Vol. 72, No. 154, at Pages 44978-44979. This proceeding is EB Docket No. 06-119 and WC Docket No. 06-63.

Wednesday, October 10

9:00 AM - 2:40 PM. The U.S. Chamber of Commerce will host a conference titled "RFID Solutions: Securing the Commerce of Tomorrow". The speakers will include Hugo Teufel (Chief Privacy Officer of the Department of Homeland Security), Dan Caprio (Progress & Freedom Foundation), Bill McDermott (P/CEO of SAP Americas), David Nabarro (UN Development Group), and Mark Roberti (RFID Journal). Prices vary. See, notice and registration page. For more information, contact Drew Preston at 202-463-5500 or ncfevents at uschamber dot com. Location: Ronald Reagan Building, Atrium Ballroom, 1300 Pennsylvania Ave., NW.

9:30 AM. The Federal Communications Commission's (FCC) North American Numbering Council (NANC) will meet. See, notice in the Federal Register, September 24, 2007, Vol. 72, No. 184, at Pages 54263-54264. Location: FCC, Suite 5-C162, 445 12th St., SW.

6:00 - 8:00 PM. The Federal Communications Bar Association's (FCBA) International Telecommunications Practice Committee will host an event titled "Panel Discussion with Telecom Attaches from Foreign Embassies". The speakers will also include Michael Copps (FCC Commissioner) and David Gross (Department of State). Prices vary. See, registration form [PDF]. Registrations and cancellations are due by 5:00 PM on September 28. Location: House of Sweden, 2900 K St., NW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Eighth Further Notice of Proposed Rule Making announcing tentative channel designations. This item is FCC 07-138 in MB Docket No. 87-268. See, FCC Public Notice (DA 07-3914) [PDF] and notice in the Federal Register, September 10, 2007, Vol. 72, No. 174, at Pages 51575-51581.

Thursday, October 11

10:00 AM - 12:00 NOON. The Department of State's (DOS) Advisory Committee on International Communications and Information Policy will hold a meeting. See, notice in the Federal Register, September 18, 2007, Vol. 72, No. 180, at Pages 53275-53276. Location: DOS, Truman Building, 2201 C St., NW.

11:00 AM - 1:00 PM. The Copyright Alliance will host an event titled "Exponential". The scheduled speakers are Rep. John Conyers (D-MI), Chairman of the House Judiciary Committee (HJC), Rep. Howard Berman (D-CA), Chairman of the HJC's Subcommittee on Courts, the Internet and Intellectual Property (SCIIP), Rep. Marsha Blackburn (R-TN), Rep. Adam Putnam (R-FL), Stuart Taylor (book author and journalist), and Lloyd Dangle (graphic artist). Lunch will be served. RSVP to Diana Walters at Diana_Walters at NicklesGroup dot com. Location: Cannon Caucus Room, Third Floor, Cannon Building.

Deadline to submit comments to the National Institute of Standards and Technology (NIST) regarding its Draft Federal Information Processing Standard 140-3, titled "Security Requirements for Cryptographic Modules". See, notice in the Federal Register, July 13, 2007, Vol. 72, No. 134, at Pages 38566-38567.

Friday, October 12

Extended deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding Section 612 of the Communications Act, which is codified at 47 U.S.C. § 532, which requires cable operators to set aside channel capacity for commercial use by video programmers unaffiliated with the operator, and Section 616 of the Communications Act, which is codified at 47 U.S.C. § 536, which prohibits a cable operator or other multichannel video programming distributor (MVPD) from requiring a financial interest in any program service as a condition for carriage of such service, from coercing a programmer to grant exclusive carriage rights, or from engaging in conduct that unreasonably restrains the ability of an unaffiliated programming vendor to compete fairly by discriminating against such vendor on the basis of affiliation or nonaffiliation. The FCC adopted this item on March 2, 2007, and released the text on June 15, 2007. This NPRM is FCC 07-18 in MB Docket No. 07-42. See, notice in the Federal Register, July 18, 2007, Vol. 72, No. 137, at Pages 39370-39377, and Public Notice [PDF] (DA 07-3736) extending comment deadlines.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Compuer Security Division (CSD) regarding its Draft Special Publication 800-28 Revision 2 [60 pages in PDF], titled "Guidelines on Active Content and Mobile Code".

People and Appointments

10/4. Sen. Pete Domenici (R-NM) announced that he will not run for re-election to the Senate next year. See also, statement by President Bush.

10/3. Scott Wiener was named SVP, Partner Development at Frontier Wireless. He previously worked for Sprint Nextel.

10/1. Securities and Exchange Commission (SEC) Commissioner Annette Nazareth announced her intention to leave the SEC to return to the private sector. She did not set a departure date. See, SEC release.

9/27. Joel Harris was named Chair of the Department of Commerce's (DOC) newly created DOC Technology Council. See, release.

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