7/7. The House passed HR 3114 [LOC | WW], an untitled bill, late on Tuesday, July 7, 2009, without a roll call vote, a bill regarding U.S. Patent and Trademark Office (USPTO) fees and funding.

The USPTO is funded by user fees. Fee collections have dropped. Yet, there remain huge backlogs of pending patent applications. The USPTO states that it may have to furlough workers. This bill provides that for one year the USPTO can address this problem by using trademark fees to fund patent operations, and then reimburse trademark operations through additional patents fees.

This bill provides that the USPTO "may use funds made available for fiscal year 2009 pursuant to section 31 of the Trademark Act of 1946 ... to support the processing of patents and other activities, services, and materials relating to patents, notwithstanding" 35 U.S.C. § 42(c).

Section 42(c) provides, in part, that "All fees available to the Director under section 31 of the Trademark Act of 1946 shall be used only for the processing of trademark registrations and for other activities, services, and materials relating to trademarks and to cover a proportionate share of the administrative costs of the Patent and Trademark Office."

Also, the USPTO "shall ... establish a surcharge, in amounts up to $70,000,000, on patent fees ... to repay any funds drawn down" for this purpose.

This authority would terminate on June 30, 2010.

But first, to exercise this authority, the Director of the USPTO must certify "in writing to the Congress that the use of the funds ... is reasonably necessary to avoid furloughs or a reduction-in-force, or both" at the USPTO, "and does not create a substantial risk of a furlough or reduction-in-force of personnel working in the Trademark Operation of the United States Patent and Trademark Office.

Rep. John Conyers (D-MI), the Chairman of the House Judiciary Committee (HJC), introduced this bill on July 7, 2009. The HJC held no hearing or mark up of this bill. The Library of Congress had not yet published a copy of the bill when the House approved it.

The Senate passed a similar, but differently worded bill, S 1358 [LOC | WW], on June 25, 2009. Sen. Patrick Leahy (D-VT) and Sen. Jeff Sessions (R-AL), the Chairman and ranking Republican of the Senate Judiciary Committee (SJC), introduced that bill on June 25.

Rep. Hank Johnson (D-GA), a member of the HJC, stated during House debate on July 7, 2009, that this bill will help the USPTO to "retain educated and trained employees who face the possibility of furlough and reduction in force due to the current economic downturn". He added that the USPTO states "that the current downtrend in patent fee revenues could lead to employee furlough".

Rep. Johnson (at left) continued that there is now a backlog "1.2 million pending applications". Moreover, "inventors are waiting an average of 32 months to get their patents approved, and in some areas, such as communications and computer-related technologies, the wait is much longer. This backlog means a delay in the creation of new products or startup companies that would generate new jobs and research and development investment."

He explained that "Furloughing employees will only increase the backlog and the consequent delays. In order to help the USPTO get through the next year, we have identified an approximately $60 million surplus in the trademark operation at the USPTO. The bill we are considering today would permit the Director of the USPTO to use a portion of that surplus to prevent the furlough of USPTO employees. ... Any trademark money used for patent operations will be recovered by a surcharge on the patent fees paid by those who benefit from the efforts of the patent workforce."

Rep. Ted Poe (R-TX), another member of the HJC, also spoke in favor of the bill. He said that "American IP industries now account for over half of all U.S. exports and 40 percent of our economic growth. These industries provide millions of jobs for Americans with high-paying salaries. Patents encourage innovation and provide incentives to create, build, and market new products. Delays in obtaining patents stifle entrepreneurship in our country. We want new ideas, new technologies, and new patents. America has always been the Nation of great inventors. Now we must protect those inventors and their inventions with timely patents."

He argued that "failure to enact H.R. 3114 at this time will place PTO in an even deeper hole that jeopardizes agency jobs, harms the interests of inventors, and damages a crucial component of our national economy."

Rep. Darrell Issa (R-CA) also spoke in favor of the bill.

The Senate passed its bill on June 25, without any debate, or roll call vote. The SJC held no hearing or markup.

7/7. The U.S. Court of Appeals (9thCir) issued its opinion [9 pages in PDF] in Doe v. Abbott Labs, an antitrust case involving combinations of drugs taken for HIV treatment.

This is a Sherman Act, Section 2, case. The legal analysis in the present case is related to the legal analysis to be applied in Section 2 cases involving allegations of price squeezes, monopoly leveraging, and/or bundling discounts in the telecommunications and technology sectors.

The Court of Appeals held that there is no Section 2 monopoly leveraging claim in the present case. It reasoned that this monopoly leveraging claim is the functional equivalent of the price squeeze claim that the Supreme Court found unobjectionable in February in Pacific Bell v. LinkLine.

This opinion is favorable for large telecom and tech companies that might be accused by antitrust regulators or plaintiffs' antitrust lawyers of monopoly leveraging or bundling discounts.

This is a patient class action against a large drug company involving the prices that it charges for drugs used to treat human immunodeficiency virus (HIV). Plaintiffs allege violation of Section 2 of the Sherman Act, which is codified at 15 U.S.C. § 2.

This short and vaguely worded statute makes it unlawful to "monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations."

The law lies in the interpretations of the courts and federal regulators.

This case, along with other recent opinions, such as the 9th Circuit's opinion in Cascade/McKenzie v. PeaceHealth, and the Supreme Court's opinion in Pacific Bell v. LinkLine, suggest that the courts are on one trajectory, while President Obama's Department of Justice Antitrust Division and Federal Trade Commission (FTC), and the European Commission, are on another.

See, the Supreme Court's February 25, 2009, opinion [24 pages in PDF] in Pacific Bell v. LinkLine Communications, and story titled "Supreme Court Reverses in Pacific Bell v. Linkline" in TLJ Daily E-Mail Alert No. 1,906, February 27, 2009.

See also, the 9th Circuit's February 1, 2008, amended opinion [57 pages in PDF] in Cascade/McKenzie v. PeaceHealth, 515 F.3d 883, and story titled "9th Circuit Rules on Application of Antitrust Law to Bundling Discounts" in TLJ Daily E-Mail Alert No. 1,634, September 5, 2007.

And see, the Supreme Court's January 13, 2004, opinion in Verizon v. Trinko, 540 U.S. 398, and story titled "Supreme Court Holds That There is No Sherman Act Claim in Verizon v. Trinko" in TLJ Daily E-Mail Alert No. 815, January 14, 2004.

Abbott Laboratories, Bristol Meyers-Squibb (BMS), and GlaxoSmithKline (GSK) are competing drug companies. All make drugs that boost the effectiveness of protease inhibitors used to treat HIV.

Abbott makes Norvir and Kaletra, two protease inhibitors that are taken in combination. BMS and GSK both make other protease inhibitors. When they began promoting their drugs to be taken in combination with Abbott's Norvir, Abbott raised its price for Norvir, but not Kaletra.

The plaintiffs in two consolidated actions are John Doe patients, and the Service Employees International Union Health and Welfare Fund. They filed complaints in the U.S. District Court (NDCal) against Abbott alleging violation of Section 2 of the Sherman Act.

They allege that Abbott has a monopoly in Norvir. They also allege that Abbott leveraged its Norvir monopoly to attempt to monopolize the market for Kaletra.

The District Court denied Abbott's motions to dismiss and for summary judgment. Abbott brought the present appeal.

The Court of Appeals, relying upon LinkLine, held that allegations of monopoly leveraging through pricing conduct in two markets, absent an antitrust refusal to deal or some other exclusionary practice in the monopoly market or below cost pricing in the second market, do not state a claim under Section 2 of the Sherman Act. Hence, it reversed the judgment of the District Court.

The Court of Appeals, citing LinkLine and Verizon v. Trinko, wrote that "mere possession of monopoly power and the practice of charging monopoly prices does not run afoul of § 2".

The Court continued that simply possessing monopoly power and charging monopoly prices does not violate § 2; rather, the statute targets the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident. And, when predatory pricing is at issue, a plaintiff must demonstrate that (1) the prices complained of are below an appropriate measure of its rival's costs; and (2) there is a dangerous probability that the defendant will be able to recoup its investment in below cost prices.

Then, it wrote that "Applying linkLine leads us to conclude that Does' claim falls short as well. They allege no refusal to deal at the booster level, and no below cost pricing at the boosted level. Does try to distance themselves from linkLine on the footing that their claim is for monopoly leveraging, not price squeezing, and that Abbott provides products to consumers in both the booster and boosted markets whereas AT&T provided products in retail and wholesale markets. We understand the difference, but it is insubstantial." (Footnote omitted.)

The Court continued that "However labeled, Abbott's conduct is the functional equivalent of the price squeeze the Court found unobjectionable in linkLine. Abbott sells Norvir as a standalone inhibitor and as part of a boosted inhibitor instead of selling Norvir to its competitors at a high price for use with their own protease inhibitors while attributing a lower price to the product when used as part of its own boosted inhibitor. Either way, the alleged vice is that Abbott is using its monopoly position in the booster market to raise the price of Norvir while selling its own boosted inhibitor at too low a price. And either way, this puts the squeeze on competing producers of protease inhibitors that depend on Norvir for their boosted effectiveness and consumer acceptance."

The Court of Appeals reversed on this analysis. It did not reach the question of whether Cascade/McKenzie v. PeaceHealth also warrants reversal. Nor did the Court of Appeals address the issues of whether Abbott had a monopoly in the first place, or whether there was antitrust injury.

This case is John Doe 1, et al. v. Abbott Laboratories, and Service Employees International Union Health and Welfare Fund v. Abbott Laboratories, consolidated, U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 08-17699, an appeal from the U.S. District Court for the Northern District of California, D.C. Nos. 4:04-cv-01511-CW and 4:04-cv-4203-CW, Judge Claudia Wilken presiding. Judge Pamela Rymer wrote the opinion of the Court of Appeals, in which Judges Mary Schroeder and Stephen Reinhardt joined.

Judge Rymer was appointed by the first President Bush. Judges Schroeder and Reinhardt were appointed by President Carter.

7/8. President Obama nominated Irene Berger to be a Judge of the U.S. District Court for the Southern District of West Virginia. See, White House news office release.

7/8. President Obama nominated Roberto Langeto be a Judge of the U.S. District Court for the District of South Dakota. See, White House news office release.

7/8. Lori Richards, Director of the Securities and Exchange Commission's (SEC) Office of Compliance Inspections and Examinations (OCIE), will leave the SEC. See, SEC release.

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The House will meet at 10:00 AM for legislative business. It will consider HR 2965 [LOC | WW], the "Enhancing Small Business Research and Innovation Act of 2009" and HR 2997 [LOC | WW], the "Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2010", which includes funding for the Rural Utilities Service (RUS), including funding for loans and grants for rural telecommunications, broadband telecommunications, and telemedicine and distance learning services in rural areas. See, Rep. Hoyer's schedule for the week of July 6, and schedule for July 8.

The Senate will meet at 9:30 AM. It will resume consideration of HR 2892 [LOC | WW], the "Department of Homeland Security Appropriations Act, 2010".

9:30 AM. There will be an event to release a report titled "PointSmart ClickSafe. Task Force Best Practice Recommendations for Child Online Safety". The report is the product of a coalition of companies and groups, including AOL, Comcast, Cox, Google, Symantec, Yahoo, Verizon, Common Sense Media, Internet Keep Safe Coalition, PTA, Family Online Safety Institute, and Children's Partnership. The speakers will include Rep. Debbie Schultz (D-FL) and Rep. John Shimkus (R-IL). RSVP to Joy Sims at jsims at ncta dot com or 202-222-2365. Location: Room HC-6, Capitol Building.

9:30 AM - 12:30 PM. The National Archives and Records Administration's (NARA) Information Security Oversight Office's (ISOO) Public Interest Declassification Board (PIDB) will meet. See, notice in the Federal Register, June 23, 2009, Vol. 74, No. 119, at Pages 29729-29730. Location: NARA, Room 105, 700 Pennsylvania Ave., NW.

10:00 AM. The House Commerce Committee's (HCC) Subcommittee on Commerce, Trade and Consumer Protection will hold a hearing titled "The Proposed Consumer Financial Protection Agency: Implications For Consumers And The FTC". Location: Room 2123, Rayburn Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Sky Technologies v. SAP, App. Ct. No. 2008-1606. Location: Courtroom 201.

1:30 PM. The Senate Appropriations Committee's (SAC) Subcommittee on Financial Services and General Government will meet to mark up the Fiscal Year 2010 Financial Services and General Government Appropriations. This bill includes appropriations numerous technology related entities, including the federal judiciary, Executive Office of the President (EOP) and its Office of Management and Budget (OMB), Federal Communications Commission (FCC), Federal Trade Commission (FTC), Securities and Exchange Commission (SEC), Department of the Treasury (DOT), and its Internal Revenue Service (ITS) and Financial Crimes Enforcement Network (FinCEN). Location: Room 192, Dirksen Building.

2:00 PM. The Senate Commerce Committee (SCC) will meet to mark up several bills, including S 649 [LOC | WW], the "Radio Spectrum Inventory Act". See, notice. Location: Room 253, Russell Building.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Inquiry [59 pages in PDF] regarding the drafting of a "national broadband plan", as required by Section 6001(k) of HR 1 [LOC | WW], the huge spending bill passed by the Congress in February. See also, "Broadband Plan Statute: Public Law No. 111-5, § 6001(k)" and stories titled "FCC Releases NOI on Broadband Plan" and "Additional Questions Asked by FCC's Broadband Plan Notice of Inquiry" in TLJ Daily E-Mail Alert No. 1,924, April 11, 2009. This NOI is FCC 09-31 in Docket No. GN 09-51.

Deadline to submit comments to the Internet Corporation for Assigned Names and Numbers (ICANN) regarding its document [PDF] titled "Proposals for the Systematization of ICANN’s Organizational Review Processes".

The House will meet at 10:00 AM for legislative business. See, Rep. Hoyer's schedule for the week of July 6.

RESCHEDULED FROM JUNE 18. 10:00 AM. The House Foreign Affairs Committee's (HFAC) Subcommittee on Terrorism, Nonproliferation and Trade will hold a hearing titled "The Export Administration Act: A Review of Outstanding Policy Considerations". See, notice. Location: Room 2172, Rayburn Building.

10:00 AM. The House Judiciary Committee's (HJC) Subcommittee on Courts and Competition Policy will hold a hearing titled "Trends Affecting Minority Broadcast Ownership". See, notice. Location: Room 2141, Rayburn Building.

10:00 AM. The House Small Business Committee's (HSBC) Subcommittee on Contracting and Technology will hold a hearing titled "Helping Small Business Innovators through the Research and Experimentation Tax Credit". Location: Room 2360, Rayburn Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Resqnet.com v. Lansa, App. Ct. No. 2008-1365. Location: Courtroom 201.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in L-3 Communications v. US, App. Ct. No. 2008-5111. Location: Courtroom 201.

12:00 NOON. The National Economists Club (NEC) will host a lunch titled "Green Jobs and Patent Protection: The Clean Technologist Case for Consistent Policymaking". The speaker will be Robert Shapiro (ecoIDEA Institute). To make reservations, contact 703-493-8824 or info at national-economists dot org. Location: Chinatown Garden Restaurant, 2nd floor, 618 H St., NW.

12:15 - 1:30 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host a brown bag lunch titled "An Introduction to Broadband Regulation and Policy". The speaker will be Dan Brenner (Hogan & Hartson). For more information, contact Micah Caldwell at mcaldwell at fh-law dot com or Christina Langlois at clanglois at nualumni dot com. Location: Drinker Biddle & Reath, 1500 K St., NW.

Deadline to submit comments to the National Institute of Standards and Technology (NIST) regarding its "Release 1.0 of the Smart Grid Interoperability Standards Framework". See, notice in the Federal Register: June 9, 2009, Vol. 74, No. 109, at Pages 27288-27289.

The House may meet at 9:00 AM for legislative business. See, Rep. Hoyer's schedule for the week of July 6.

10:00 AM. The Senate Finance Committee (SFC) will hold a hearing on the nomination of William Wilkins to be Chief Counsel of the Internal Revenue Service (IRS). See, notice. Location: Room 215, Dirksen Building.

12:00 NOON - 2:00 PM. The Progress & Freedom Foundation (PFF) will host an event titled "Regulating Online Advertising: What Will it Mean for Consumers, Culture & Journalism?". The speakers will be Howard Beales, Thomas Lenard (Technology Policy Institute), Jules Polonetsky (Director of the Future of Privacy Forum), Mark Adams (PFF), and Berin Szoka (PFF). See, notice. Location: Room 208, Capitol Visitor Center.

9:00 AM - 5:00 PM. Day one of a three day event hosted by the National Institute of Standards and Technology (NIST) titled "Workshop on the Protocol for Lightweight Authentication of Identity (PLAID)". See, notice in the Federal Register, June 19, 2009, Vol. 74, No. 117, at Pages 29183-29184. Location: Administration Building, NIST Gaithersburg campus, 100 Bureau Drive, Gaithersburg, MD.

12:00 NOON - 2:00 PM. The Technology Policy Institute (TPI) will host a panel discussion titled "Broadband Competition Policy: What Comes After the Stimulus?". The speakers will be Michael Katz (New York University business school), Eli Noam (Columbia School of Business), William Lehr (MIT), Scott Wallsten (TPI), and Joseph Waz (Comcast). This event is free. Lunch will be served. See, registration page. Location: Room B-340, Rayburn Building.

3:00 PM. Deadline to submit applications to the National Institute of Standards and Technology (NIST) for money to conduct research on, among other things, information technology and cyber security. See, notice in the Federal Register, June 1, 2009, Vol. 74, No. 103, at Pages 26209-26213.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to it Fourth Further Notice of Proposed Rulemaking regarding whether or not to modify FCC Form 323-E, the Ownership Report filed by noncommercial educational (NCE) licensees of AM, FM, and TV broadcast stations, to obtain gender, race, and ethnicity data. This 4thFNPRM is FCC 09-33 in MB Docket Nos. 07-294, 06-121, 02-277 and 04-228, and MM Docket Nos. 01-235, 01-317, and 00-244. See, public notice DA 09-1195, and notice in the Federal Register, May 27, 2009, Vol. 74, No. 100, at Pages 25205-25208.

9:00 AM - 5:00 PM. Day two of a three day event hosted by the National Institute of Standards and Technology (NIST) titled "Workshop on the Protocol for Lightweight Authentication of Identity (PLAID)". See, notice in the Federal Register, June 19, 2009, Vol. 74, No. 117, at Pages 29183-29184. Location: Administration Building, NIST Gaithersburg campus, 100 Bureau Drive, Gaithersburg, MD.

11:00 AM - 12:30 PM. The Heritage Foundation will host a panel discussion titled "Securing Identification Cards: REAL ID vs. PASS ID". The speakers will be Stewart Baker (Steptoe & Johnson), Brian Zimmer (Coalition for a Secure Driver’s License), Janice Kephart (Center for Immigration Studies), and Jena McNeil (Heritage). See, notice. Location: Heritage, 214 Massachusetts Ave., NE.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding procedures for allocating new FM channels and AM frequency assignments. The FCC adopted this item on April 7, 2009, and released the text [33 pages in PDF] on April 20, 2009. It is FCC 09-30 in MB Docket No. 09-52. See, notice in the Federal Register, May 13, 2009, Vol. 74, No. 91, at Pages 22498-22507.

5:00 PM. Deadline to submit applications to the National Telecommunications and Information Administration (NTIA) for Priority Round funding under its Low-Power Television and Translator Upgrade Program. See, notice in the Federal Register, May 12, 2009, Vol. 74, No. 90, at Pages 22401-22415.

12:30 - 3:30 PM. The Department of Homeland Security's (DHS) National Infrastructure Advisory Council (NIAC) will meet. See, notice in the Federal Register, June 1, 2009, Vol. 74, No. 103, at Pages 26252-26253. Location: J.W. Marriott, Salons E and F, 1331 Pennsylvania Ave., NW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking (FNPRM) in which it proposes to modify its cost sharing requirements for the 2 GHz BAS band. The FCC adopted this FNPRM on June 10, 2009, and released the text on June 12, 2009. It is FCC 09-49 in WT Docket No. 02-55 and ET Docket Nos. 00-258 and 95-18. See, notice in the Federal Register, June 23, 2009, Vol. 74, No. 119, at Pages 29636-29650.

8:30 - 11:30 AM. The Phoenix Center for Advanced Legal and Economic Policy Studies will host an event titled "Understanding Broadband Metrics: The Broadband Adoption Index". FCC Commissioner Robert McDowell will speak at 9:00 AM. See, agenda [PDF]. RSVP to 202-274-0235 or info at phoenix-center dot org Location: National Press Club, 13th floor, 529 14th St., NW.

9:00 AM - 5:00 PM. Day three of a three day event hosted by the National Institute of Standards and Technology (NIST) titled "Workshop on the Protocol for Lightweight Authentication of Identity (PLAID)". See, notice in the Federal Register, June 19, 2009, Vol. 74, No. 117, at Pages 29183-29184. Location: Administration Building, NIST Gaithersburg campus, 100 Bureau Drive, Gaithersburg, MD.

10:00 AM. The Senate Homeland Security and Government Affairs Committee (SHSGAC) will hold a hearing titled "Identification Security: Reevaluating the REAL ID Act". Location: Room 342, Rayburn Building.

1:00 - 5:00 PM. The U.S. Patent and Trademark Office (USPTO) will host an event titled "2009 Business Methods Partnership Meeting". See, notice. Location: USPTO, Madison Auditorium (South), Concourse Level, Madison Building, 600 Dulany Street, Alexandria, VA.

2:30 PM. The Senate Commerce Committee (SCC) will hold a hearing on the nominations of Mignon Clyburn and Meredith Baker to be Commissioners of the Federal Communications Commission (FCC). See, notice. Location: Room 253, Russell Building.