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Chair's Bulletin

VOL. 7  NO.11  JULY 2003

From the Chair
Answers to the Question
"What Can I Do?"

 

House IP Subcommittee Approves PTO Fee Bill
Has Strong Anti-Diversion Provision

By Hayden W. Gregory
Section Legislative Consultant

On May 22, the Subcommittee on Courts, the Internet, and Intellectual Property of the House Judiciary Committee marked up and favorably reported H.R. 1561, the "United States Patent and Trademark Fee Modernization Act of 2003," to the full Judiciary Committee. H.R. 1561 contains the Bush Administration's recommendations for patent user fee increases averaging about 15%. This proposal directly implicates the issue of diversion of PTO user fees to fund unrelated programs, since the Administration's budget request for FY2004 calls for $100 million of this new revenue to be diverted. The Section supports the fee bill as a neces-sary step to provide additional funding to address growing problems of pendency and quality in the PTO, provided that any such legislation also effectively addresses the problem of diversion.

To end such diversion, the Subcommittee approved an amendment to H.R. 1561, offered jointly by Chairman Lamar Smith and Ranking Member Howard Berman, that would take PTO funding out of the appropriations process and make fee revenue available to the Office upon collection. Fee collections would be deposited in a PTO account in the U.S. Treasury, where they would be available immediately to the Office. Use of the funds would be specifically limited to support for patent and trademark activities.

This approach to ending user fee diversion, which Smith described as "the strongest possible action we could take," is one that the ABA has specifically indorsed.

In urging members of Congress to include anti-diversion provisions in the fee bill, the IPL Section has been aided by the fact that ending PTO user fee diversion is a policy of the entire Association, not just the Section, and by the fact that the ABA Board of Governors earlier this year saw the problem to be of sufficient importance to be designated one of just 12 top legislative priorities of the Association. The Section believes that this strong support of the Association was a contributing factor in convincing the Subcommittee to select this legislative response to the diversion problem over other alternative approaches that were being lobbied and considered.

While the amendment adopted by the Subcommittee would likely end diversion if it were enacted, enactment is by no means assured. In choosing this approach, the Subcommittee understood that it was steering a course that is likely to be opposed in the House. Its predecessor, H.R. 4034 of the 106th Congress, was favorably reported by the Judiciary Committee only to stall and die after the Chairman of the Appropriations Committee objected to the bill. At the May 22 markup, members of the Subcommittee acknowledged the need to work harder this time to garner support for the measure from the House leadership and from House members generally.

Congressman Berman, who has been considering offering an amendment to restrict the separation of patent search and examination functions and outsourcing of searches, announced at the mark-up that he was not offering such at this time, but that such an amendment might be offered when H.R. 1561 is considered in the full Judiciary Committee.

Section Advocacy on Madrid Protocol Rules

Robert W. Sacoff
Chair Elect, 2003-04


Section Chair-Elect Bob Sacoff testified on May 30th at the USPTO hearing on the Trademark Rules package proposed to implement the Madrid Protocol in the United States. His testimony was based on the Secton's written comments of May 23, 2003, in response to the notice of proposed rulemaking. The following Section members deserve particular recognition for their good work in helping to formulate our Section's position - Jim Walsh (Committee 203 Chair), Clark Lackert (Committee 202 Chair), Barbara Friedman and Jay Hines.

As a prelude, our Section successfully moved the ABA House of Delegates in 2001 to adopt IPL Section policy favoring Madrid as ABA policy in the following resolution: "Resolved, that the American Bar Association approves the adherence by the United States to the Protocol to the Madrid Agreement for the International Registration of Trademarks, adopted in Madrid, Spain on June 27, 1989, and the amendment of the Lanham Act, 15 U.S.C. § 1051 et seq. (1994 & Supp. II 1996), to the minimum extent required for United States adherence."

Our Section's comments on the proposed rules emphasize protecting the rights of trademark owners, maximizing their ability to extend opposition periods, revive unintentionally abandoned applications, and remedy insufficient fee payments, and recommend providing applicants' designated representatives early notice of objections to registrability under the new Madrid system. The full text of the Section's letter is posted on our web site at www.abanet.org/intelprop/response.doc.

Committee News

Committee On Taxation (Committee 406)

Kerwin Chung,
Committee Chair

The Committee on Taxation is working on hosting two panels with the ABA Tax Section regarding the taxation of intangibles property. One panel will be held at a future Section of Intellectual Property Law meeting and focus on IP tax issues for non-tax lawyers. A second panel will be held at a future ABA Tax Section meeting and will focus on IP issues for non-IP lawyers. The committee is also planning articles for several upcoming IRS guidance projects that will have a significant impact on IP planning.

The committee is also soliciting new members and ideas from the IPL Section leadership on how the Tax Committee can better serve the section.

New Committees

Several new committees have been established by the Section. These include Committee 104 - Interferences, Committee 413 - IP Licensing, and Committee 606 - Experts. The new Committee 104 absorbed what was Committee 152 - Special Committee on Interfer-ences. Other committees have new names, such as Committee 805 - Spring CLE Meeting.

A complete listing of committees can be found at www.abanet.org/intelprop/comchair. To join a committee, please visit www.abanet.org/intelprop/committee_registration.

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