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Orrin Hatch

Patent Reform: First-To-File Provision Survives California Challenge

in Intellectual Property/Patents by

WASHINGTON, March 4, 2011 — The U.S. Senate on Thursday rebuffed an effort by Sen. Dianne Feinstein, D-Calif. that would have eviscerated the current push to switch the United States’ method of awarding patents to one that is in line with the rest of the world’s.

The bill, S. 23, sponsored by Sen. Patrick Leahy, D-Vt, proposes to change the U.S. system to one that awards patents to those who file first for a patent, putting it in line with the way the rest of the world’s patent systems work.

Currently, the U.S. stands alone in awarding patents to those who can prove that they were the first to invent something.

Feinstein, along with fellow California Democrat Barbara Boxer, objected to the fundamental change to the U.S. system on Wednesday as they discussed the legislation on the Senate floor.

“I think this is really a battle between the small inventors beginning in the garage, like those who developed the Apple computer that was nowhere, and who, through the first-to-invent system, were able to create one of the greatest companies in the world,” Feinstein said. “America’s great strength is the cutting-edge of innovation. The first-to-invent system has served us well. If it is not broke, don’t fix it. I don’t really believe it is broke.”

Feinstein discussed the importance of the first-to-invent standard in the United States at length, as well as the importance of the associated “grace period” to independent inventors.

She said that the changes sought in the current legislation would make it much harder for inventors to prove that they were the first to come up with an idea.

“Another problem with the bill’s first to file system is the difficulty of proving that someone copied your invention,” she said.

“Currently, you as a first inventor can prove that you were first by presenting evidence that is in your control–your own records contemporaneously documenting the development of your invention,” she continued. “But to prove that somebody else’s patent application came from you under the bill, was “derived” from you, you would have to submit documents showing this copying. Only if there was a direct relationship between the two parties will the first inventor have such documents.

If there was only an indirect relationship, or an intermediary–for example, the first inventor described his invention at an angel investor presentation where he didn’t know the identities of many in attendance–the documents that would show “derivation”–copying–are not going to be in the first inventor’s possession; they would be in the second party’s possession. You would have to find out who they talked to, e-mailed with, et cetera to trace it back to your original disclosure. But the bill doesn’t provide for any discovery in these “derivation proceedings,” so the first inventor can’t prove their claim”

Feinstein also dismissed the arguments for a change in the system, noting that there are only 50 proceedings a year at the United States Patent and Trademark Office that dispute who created a new invention first.

That is a minuscule number considering that there are about 480,000 patent applications a year.

Feinstein’s amendment, and her citation of a laundry list of supporters for it, including the Silicon Valley-based Coalition for Patent Fairness, the engineering group the IEEE, the National Small Business Association, as well as Phyllis Schafly of The Eagle Forum (among many other big name ultra conservatives,) illustrates the sharp fault lines that still exist over the six-year-old effort to overhaul the nation’s patent system.

Both Sen. Orrin Hatch, R-Utah, and Leahy vigorously defended the push to change to the first-to-file system, for their part also citing numerous organizations’ support for the move.

“[Feinstein's] amendment would gut the reforms intended by the bill, and be a poison pill to these legislative reform efforts,” said Leahy.  ”Supporters of the legislation, ranging from high-tech and life sciences companies, to universities and small businesses, place such a high importance on the transition to first-inventor-to-file system that many of them – including those who reside in most of our states — will not support a bill without those provisions.”

“A vote in support of this amendment, which would strike first-inventor-to-file provision, is effectively a vote against the heart of the America Invents Act,” he added.

The senators on Thursday voted 87-13 to set aside Feinstein’s bold attempt.

IBM, the largest filer for patents in the United States, applauded the development.

“We are very encouraged by the actions of the senate,” said Marian Underweiser, IBM’s counsel for intellectual property strategy and policy. “We believe the bill is a positive step to modernize our patent system.”

The senate is scheduled to start wrapping up its consideration of the legislation, and to vote to limit further debate on the legislation at the close of business Monday.

A companion House bill has yet to be introduced.

Editor’s Note: The Intellectual Property Club will host a panel discussion on patent reform in the 112th Congress March 8th. Former Federal Circuit Chief Judge Paul R. Michel will speak, as will a representative of the USPTO, BIO, and others.  Join us!

Intellectual Property Breakfast Club Today Likely to Focus on Bill Seizing Infringing Web Domains

in Broadband Calendar/Copyright/Intellectual Property by

WASHINGTON, October 12, 2010 – The Intellectual Property Breakfast Club on Tuesday, focusing on “Finding Solutions to the Problems of Copyright Infringement,” may well focus on S. 3804, the “Combating Online Infringement and Counterfeits Act” (COICA), introduced late last month by Senate Judiciary Committee Chairman Patrick Leahy and Sen. Orrin Hatch, R-Utah.

The legislation would enable the Justice Department to seek a preliminary injunction against domain name registrars, which would have to suspend access to the domains hosting infringing material, or that are trafficking in infringing material. The legislation would require the attorney general to notify the federal intellectual property enforcement co-coordinator of the injunctions, and the coordinator would in turn be required to post the names of the suspended sites on a public web site.

One of the landmark aspects of the legislation is that it would give Justice the authority to order the shuttering of web sites hosted beyond U.S. borders, but which are using U.S.-based registrars.

This piece of legislation is the latest stab by federal authorities in the United States to address the phenomena of online piracy and counterfeiting. US officials have been locked in negotiations for the past several years with their counterparts in Europe, Africa, Asia and Australasia over the question of how best to combat online piracy and the international trafficking of counterfeit goods.

Hearings have not yet been held on the proposed legislation. Late last month, technology industry players began to voice concerns with the bill. In a letter signed by the Consumer Electronics Association, the Computer and Communications Industry Association, public interest groups like the Electronic Frontier Foundation and Public Knowledge, and research libraries, these groups write (PDF):

The potential for blacklisting for “facilitating” infringement, as so broadly defined in this bill,can undermine U.S. secondary liability law as established in Sony v. Universal, and ignores theculpable intent requirement of MGM v. Grokster. For example, would the listing of a website onthe blacklist constitute constructive knowledge for contributory infringement purposes, if aservice provider did not discontinue providing service to a website after it was listed? Moregenerally, the new definitions and requirements also raise serious questions about the effect ofthis bill on existing copyright exceptions, limitations and defenses upon which a significant sector of the U.S. economy relies.

But supports of COICA — a long list of entities including the Association of American Publishers, the Business Software Alliance, the Copyright Alliance, the Entertainment Software Association, the Motion Picture Association of America, the Recording Industry Association of America, the Software and Information Industry Association and the U.S. Chamber of Commerce — disagree.

According the letter from the American Federation of Television and Radio Artists (AFTRA), Directors Guild of America (DGA), Screen Actors Guilde and others (PDF):

This legislation will make it easier to shut down “rogue” websites, which are dedicated to stealing the films, television programs and music created by our members.

Also, the MPAA said:

These sites, whose content is hosted and whose operators are located throughout the world, take many forms. But they have in common the simple fact that they all materially contribute to, facilitate and/or induce the illegal distribution of copyrighted works, such as movies and television programs. These sites are increasingly sophisticated and take on many of the attributes of legitimate content delivery sites, often deceiving consumers into believing they are legitimate. They use credit card companies to facilitate payments, include advertising to earn money and provide so-called reward programs for frequent purchasers.

As reported in BroadbandBreakfast.com by Sarah Stirland, domain name seizures is a tactic being utilized in the fight against online piracy by both the United States and China. S. 3048 itself appears to model itself on the U.S. Customs Department’s successful take-down this June of nine pirate web sites.

Supporters of the legislation say that the legislation is necessary to avoid re-instatement of a web site that has the same basic name as, or is only trivially different from, a web site whose domain name has been seized by customs officials.

Editor’s Note: The preceeding story has been modified to include links and quotations from letters by supporters of COICA, and an explanation from supporters about the need for the legislation.

Will the US and China Share A Similar Model When Attacking IP Pirates Online?

in Copyright by


San Francisco, September 29, 2010 — A legislative proposal to allow the US’ top cop to seize the web addresses of sites that authorities deem are dedicated to pirating intellectual property bears a remarkable resemblance to a crackdown currently underway in China against online pirates.

A bipartisan group of 10 U.S. senators last week introduced legislation that would enable the U.S. Justice Department to render inaccessible Web sites judged to be dedicated to intellectual property infringement.

The legislation would enable Justice to seek a preliminary injunction against domain name registrars, which would have to suspend access to the domains hosting infringing material, or that are trafficking in infringing material. The legislation would require the US attorney general to notify the federal intellectual property enforcement co-coordinator of the injunctions, and the coordinator would in turn be required to post the names of the suspended sites on a public web site.

The bill also directs financial service providers to stop processing transactions for the targeted web sites once they receive a court order from the attorney general, and for ad networks to stop serving ads against the content on the site.

The legislation appears to model itself on the U.S. Justice Department’s successful take-down this June of nine pirate web sites.  It’s unclear why new legislation is necessary given that Justice has already successfully executed this strategy of shutting down domains of accused infringing sites.

For its part, the mainland Chinese government his July announced that it is seizing the domains of pirate web sites between the months of July and the end of October, the time during which the World Expo takes place in Shanghai. The names of the blacklisted web sites are sent to the country’s top Internet Service providers to be blocked. The move was announced by China’s National Copyright Administration, the Ministry of Public Security and the Ministry of Industry and Information Technology.

One of the differences between the Chinese and the proposed U.S. approaches is that the Chinese government promises a bounty of $150 to $1,500 to those reporting cases of infringement.

For its part, U.S. digital rights group the Center for Democracy and Technology in Washington, DC on Tuesday worried over how the proposed legislation in the U.S. Senate turns fundamental U.S. internet legal and constitutional tenets on their head.

The group issued a memo Tuesday outlining its concerns with S. 3804, the proposed legislation. CDT’s lawyers argued that the approach places a constitutionally-questionable prior restraint on speech, sets a bad example for the rest of the world by imposing what amounts to a content filtering regime in the United States, appoints internet service providers as online cops and is likely to screw up the security and architecture of the internet.

For its part, the US Chamber of Commerce, which has endorsed the legislation co-sponsored by Sens. Patrick Leahy, D-Vt and  Orrin Hatch, R-Utah, on Tuesday responded to these criticisms by issuing the following statement:

“Online counterfeiting and piracy is a destructive force that hurts the American economy, and the Leahy-Hatch bill addresses this illegal behavior by targeting the worst of the worst counterfeiters and copyright pirates online. The assertion that this legislation equates to foreign political censorship is erroneous and does not accurately reflect this bill. Effective action against criminals whose products can kill and whose illicit profits steal American jobs is vastly different from foreign political censorship.”

Justice Dept Could Shutter Infringing Web Sites With Court Orders Against Domain Name Registrars

in Copyright by

SAN FRANCISCO, Sept. 21, 2010 — A bipartisan group of 10 US senators on Monday introduced legislation that would enable the US Justice Department to render inaccessible Web sites judged to be dedicated to intellectual property infringement.

The legislation would enable Justice to seek a preliminary injunction against domain name registrars, which would have to suspend access to the domains hosting infringing material, or that are trafficking in infringing material. The legislation would require the US attorney general to notify the federal intellectual property enforcement co-coordinator of the injunctions, and the coordinator would in turn be required to post the names of the suspended sites on a public web site.

One of the landmark aspects of the legislation is that it would give Justice the authority to order the shuttering of web sites hosted beyond US borders, but which are using US-based registrars.

This piece of legislation is the latest stab by federal authorities in the United States to address the phenomena of online piracy and counterfeiting. US officials have been locked in negotiations for the past several years with their counterparts in Europe, Africa, Asia and Australasia over the question of how best to combat online piracy and the international trafficking of counterfeit goods.

Federal lawmakers who are part of the Congressional International Anti-Piracy caucus this May issued a “most notorious” list of web sites that are known for their pirating actvities. They include Canada’s IsoHunt, Ukraine’s Mp3fiesta, China’s Baidu, Luxembourg’s RMX4U.com, and Germany’s RapidShare.

The Combating Online Infringement and Counterfeits Act was introduced by Senate Judiciary Chairman Patrick Leahy and senior Republican committee member Orrin Hatch.

“This bill is an important step forward to help curb rampant piracy here and abroad, and protect American jobs. We look forward to working with the Senate and House Judiciary Committees and Congressional leadership on its passage,” said Viacom President and CEO Philippe Dauman in a statement regarding the legislation.

Public Knowledge, a digital consumer rights group in Washington., DC, said that the imprecise ideas in the legislation need fine-tuning.

“We are concerned that the bill would establish an internet black list of sites that the Justice Department thinks are ‘pirate’ sites but against which it hasn’t taken action,” said Sherwin Siy, Public Knowledge’s deputy legal director in a statement. “Putting an innocent site on this list could seriously harm the business of legitimate Web site operators. The remedies in the bill for those guilty until they prove themselves innocent are inadequate.”

Republican Senators Oppose FCC’s Rule Making Reasoning

in FCC by

WASHINGTON July 22, 2010- A group of seven Republican Senators have introduced a bill which will prevent the Federal Communications Commission from reregulating broadband. The bill will mandate the FCC make market based reforms.

The official title of the bill is: “A bill to encourage continued investment and innovation in communications networks by establishing a new, competition analysis-based regulatory framework for the Federal Communications Commission.” The text of the bill has not yet been released this title does give insight into its contents

Unofficially it is being called the Freedom for Consumer Choice Act and is being sponsored by Senators Jim DeMint (R-South Carolina), Senators Orrin Hatch (R- Utah), John Ensign (R-Nevada), John Thune (R- South Dakota), Tom Coburn (R- Oklahoma), John Cornyn (R-Texas), and Jeff Sessions (R-Alabama).

In a statement Senator Hatch said: “Since the FCC has a hard time listening to the American people, we’re stepping forward with commonsense legislation to keep these unelected bureaucrats’ hands off the Internet. This bill is simple – the FCC would have to demonstrate that consumers won’t be harmed if these dangerous and costly ‘net-neutrality’ regulations are put into place. We’ve heard from people across the country who have said these regulations will destroy innovation, consumer choice, and most importantly jobs. With our nation’s unemployment rate just under ten percent and our economy struggling, the Administration should listen to the American people and stop these job-killing rules.”

Broadband Competition on Senate Antitrust Subcommittee Agenda

in Net Neutrality by

WASHINGTON, March 25, 2009 – Senate Antitrust Subcommittee Chairman Herb Kohl, D-Wis., and tanking member Sen. Orrin Hatch, R-Utah, announced that broadband internet competition would be among the major subjects on the agenda for the Senate Judiciary Antitrust Subcommittee this Congress.

“In these challenging economic times, the need for strong antitrust law to protect competition has never been greater,” Kohl said. “The Antitrust Subcommittee will continue to work to ensure that the antitrust laws are vigorously enforced throughout the economy.”

Among the specific agenda items Kohl and Hatch outlined was broadband internet access:

“We plan to continue to closely examine competition in the broadband industry in the year ahead,” the subcommittee said.

“Maintaining competitive choices in this industry is crucial to consumers and the health of the national economy. We will also examine the issue of network neutrality principles and monitor whether consumers continue to have the freedom to access the internet content they wish without interference from their internet service provider.”

Microsoft Attorney: Jerry Yang Said Google-Yahoo Merger Would Kill Competition

in Broadband's Impact by

By William G. Korver, Reporter, BroadbandCensus.com

WASHINGTON, July 15 – Yahoo founder Jerry Yang said that if Yahoo and Google agreed to merge, competition in the search engine industry would cease, Microsoft general counsel Brad Smith testified before a Senate Judiciary subcommittee on Tuesday.

Yang made the comments in a meeting with Microsoft executives on June 8, according to Smith, who attending the meeting.

Yang’s view was that if Google remained on one pole, and Yahoo and Microsoft were on another, competition in the industry would continue, according to Smith. But With Yahoo and Google aligned in a close business relationship, Smith said, the viability of Microsoft would diminish.

The result would be a “monopole,” said Smith.

Smith recounted the meeting to a rapt audience as one of the witnesses for the Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights hearing on “The Google Yahoo Agreement and the Future of Internet Advertising.”

After being reminded that he was under oath, Smith, also a senior vice president at the Redmond, Wash., based software giant, adamantly reaffirmed his statement. He said that no single company should control 90 percent of a market owing to an agreement with its largest competitor.

Smith said that the government should block a June 12 agreement, between Google and Yahoo, in which Google and Yahoo announced a collaboration on a range of search technologies.

At first, Michael Callahan, general counsel of Yahoo, disagreed with Smith’s “characterizations” of Yang’s views. When pressed by senators on exactly what Yang said, Callahan said he could not recall what Yang said during the “long meeting.” Callahan was also present at the meeting with Yang and Smith.

Callahan did reiterate Yahoo’s commitment to remaining in the search market and remaining a Google rival.

Callahan said the advertising agreement did not force Yahoo to provide a certain number of Google ads on their web site and does not bar Yahoo from entering into deals with other companies.

Furthermore, Yahoo’s agreement with Google should be beneficial to publishers, consumers, and advertisers, as well as to both of the companies, Callahan said, since relevant content, audience size, and number of ads will increase as a result of the agreement.

Callahan’s view was supported by Google Chief Legal Officer David Drummond and Tim Carter, the CEO of web site Askthebuilder.com.

Drummond said that notwithstanding Google’s agreement with Yahoo, Yahoo remains independent.

Privacy advocates and others concerned about the lack of online competition have grown anxious over the prospect of 90 percent of online searches being in the hands of one company. The more data that is available to an individual search engine, the easier it would be to construct facts about a web searcher’s identity, these critics say.

Google now accounts for about 70 percent of searches; Yahoo accounts for 20 percent; with Microsoft at 10 percent, according to witnesses at the hearing.

Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., said he was wary about the possibility of vast amounts of personal data being in the possession of one company. Furthermore, the prospect of increased advertising prices, decreased competition, and loss of jobs also must be taken into account under the Google-Yahoo agreement, Leahy said.

Matthew Crowley of Yellowpages.com also criticized the agreement, saying that it would increase advertising prices, decrease customer choice and discourage competition and innovation.

Pressed by Sen. Orrin Hatch, R-Utah, on whether the deal would give individuals incentive to bypass Yahoo and buy advertising directly from Google, Callahan said that companies should be aware that there is “no guarantee” that their ads will be on Yahoo as well as Google.

Smith also said that Microsoft’s failed attempts to purchase Yahoo would only put the combination at about 30 percent of all searches, or about three times smaller than the combined size (90 percent of the market) of a Google-Yahoo combination.

Drummond responded by declaring that Yahoo could proceed on one of two paths. On one path, Yahoo remains a player in the search engine market and generates more revenue as a result of its deal with Google. On the other path, Yahoo ends being “gobbled up by Microsoft.”

When asked whether Google would consider changing the language of their agreement if asked to do so, Drummond said yes. Callahan, of Yahoo, “echo[ed]” Drummond’s comments.

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