Robert W. Sacoff
Section Chair, 2003-04

I am writing this update on Section activities on the heels of our productive and enjoyable leadership Midwinter Meeting from January 24-28 at the Westin Mission Hills Resort in Rancho Mirage, California. Over a hundred Section leaders attended, including committee and subcommittee chairs, Council members and Section officers. VIP guests included Acting U.S. Patent & Trademark Office Director Jon Dudas, ABA Executive Director Bob Stein, WIPO representative Jay Erstling, INTA President Jackie Leimer, AIPLA President Rick Nydegger, AIPLA Executive Director Mike Kirk and IPO
Executive Director Herb Wamsley. The committee chairs gave status reports on and coordinated their respective goals and activities for the year.

The Women in IP Law breakfast meeting was lively and well-attended, and featured a discussion with members of the Section's Nominating Committee on paths to Section leadership. That Committee deliberated during the meeting and discharged its responsibility to nominate candidates to fill Section Officer and Council positions. With the great wealth of superbly qualified candidates, its task was difficult to say the least. The Nominating Committee's report is set forth in detail below, and I extend the Section's appreciation to Chairman Ed Fiorito, Charlie Baker and Cindy Kernick, because they did an excellent job. I also extend warm congratulations to each and every one of the nominees, who without exception have devoted extraordinary service to our Section over the years.

Our Midwinter Meeting included a "Council of Presidents" meeting with the attending representatives of our sister organizations, where we explored common ground on issues including PTO funding and anti-diversion, FTDA amendments, amicus curiae briefs, and other matters of mutual concern. The Section Council also met during our meeting. Its usual one-day session was extended into an extraordinary second day to continue its expansive consideration of the most complex and controversial matter before it - the far-reaching notice of proposed rulemaking on the ethics and professional responsibility rules governing lawyers practicing before the USPTO. Ethics Committee Chair Carol Langford and Patent Office Affairs Committee Co-Chair Ron Myrick reported in great detail to Council on the significant issues and concerns presented by the proposed rules package. During an informal meeting with Acting Commissioner Dudas to exchange views on ongoing issues, Section Officers gave him a heads-up on our concerns about the ethics rules package. At the request of the Section, ABA President Dennis Archer has sent the following letter to the USPTO on February 4, 2004, for which we express our gratitude:

Also on the Section advocacy front, it came as no surprise that the Weldon Amendment passed as a part of the general Appropriations Act. As reported last month, I sent a letter to Senator Hatch expressing the Section's opposition to that amendment on grounds that the statutory scope of patentable subject matter should not be quasi-amended by a rider to an appropriations bill, and that the patent laws should not be used as a means of regulating behavior considered to be objectionable. Despite the anticipated enactment of the Appropriations Act, we consider our objection of record to be an important position and precedent in opposing recurring con-gressional actions of similar import in the future.

Updating my report in the February Bulletin, our Blanket Authority request was approved with respect to our comments on the proposed revisions of the Antimonopoly Act of Japan. Accordingly, our Section's comments have been submitted jointly with the co-sponsoring Sections of Antitrust Law, Business Law and International Law and are posted on our web site at www.abanet.org/intelrop/Advocacy/joint_comments.pdf.

Finally, the Section's anti-diversion efforts have been instrumental in producing Congressional movement in the right direction, as reported by Hayden Gregory in greater detail below.

The Council also discussed during the Midwinter Meeting whether to file an amicus curiae brief in the trademark case pending before the Supreme Court, KP Permanent Make?Up Inc. v. Lasting Impression, as mentioned in the last Chair's Bulletin. This case arises from a split between the 9th and other Circuits on whether the absence of confusion must be proved to establish the fair use defense. We decided not to push for the ABA to file an amicus brief, largely because it did not seem that ABA policy would afford any unique policy perspectives beyond what the parties would likely argue themselves. Amicus briefs are filed in the name of the ABA not in the name of the Sections. ABA requirements for authorizing such briefs are stringent so as to maximize the considerable credibility of the organization when it does decide to file a brief. We did, of course, mobilize the ABA to file an amicus brief recently in the Knorr-Bremse case pending in the Federal Circuit Court of Appeals, and our Amicus Committee Co-Chair Rich Beem reports below on the arguments in that case which he attended. A new petition for certiorari has been filed in the Supreme Court in the Festo litigation, seeking to contest the Federal Circuit's appli-cation of the Supreme Court's ruling in its first Festo opinion. The ABA filed an amicus brief with the Supreme Court the first time around, www.abanet.org/intelprop/festo.pdf, co-authored by Vice-Chair Tony Figg. We are following the new petition and considering whether to file another brief if the Supreme Court decides it has not already seen enough of that case.

On the outreach and young lawyers front, I am happy to report the Council also voted to approve Section fellowship and judicial internship programs, on which I will report further as the details are fleshed out.

Our Chair-Elect Bill LaFuze is doing a great job in leading our Task Force on Patent Improvement and Harmonization. I appointed this Task Force last Fall after Bill attended the meeting of NGO's in London last fall and reported that the ABA and the IPL Section need policy on important points where policy did not exist in order to move forward in global harmonization negotiations. That Task Force has devoted an enormous amount of hard work (for which Bob Armitage's contributions deserve special mention) in coordinating Committees 101, 102 and 108 work to produce reports and resolutions on important subjects including first-to-file which we anticipate scheduling for full debate at the Section's Summer IPL Conference in Toronto in June.

I hope to see many Section members at our upcoming 19th Annual Intellectual Property Law Conference in Washington, DC, which will take place April 1-2. More information is available at ww.abanet.org/intelprop/spring2004/introduction.html. That program is preceded by the traditional Practical Tips program presented by our Young Lawyers' Committee. Co-Chairs Kim Jessum and Melanye Johnson deserve recognition and thanks for their ongoing great work in organizing and producing these popular and useful programs. Register now for this program at www.abanet.org/intelprop/2004ptips_dc/registration.html.

I close, as in past columns, with thanks to all the Section members who have given their time and talents so generously to Section activi-ties in this extremely busy and productive year, and repeat my call to action for new Section members to get involved in projects of interest. It is never too late!

Major Developments On
PTO User Fee Diversion

Hayden Gregory
Legislative Consultant

The first week in February saw two major developments in the war on PTO user fee diversion. The first was the release of a presidential budget proposal that, for the first time since 1998, does not recommend PTO fee diversion. The second was the agreement of the leadership of the House of Representatives to bring to a vote the PTO fee bill that contains strong anti-diversion provisions. ABA President Dennis Archer previously wrote House Speaker Dennis Hastert, urging House passage of such legislation.

President's Budget Request
Rejects PTO Fee Diversion

In a victory for the IP community, President Bush on February 2 sent a budget recommendation to Congress that calls for no diversion of PTO user fee revenue in the fiscal year beginning October 1, 2004. The Administration's proposal calls for a two-step funding process for the Office: one for funding in the absence of enactment of fee increases, and one for funding if a new fee bill is enacted.

In the absence of fee increases, the proposal anticipates that the Office will collect $1,314,653,000 in FY05, all of which would be made available to the Office. This represents an increase of $92 million over funding for the current year.

If the fee bill currently under consideration in the Congress is enacted, the Administration antici-pates that an additional $219 million will be collected. This amount would be made available to the Office, for a total of $1,533,000,000.

These recommendations are subject to congressional approval, but the Administration's support for ending diversion is an important first step.

House to Vote on PTO Fee Bill

The House of Representatives has placed H.R. 1561, the PTO fee bill, on the House schedule for consideration during the second week in Wednesday. Before that vote, the House Rules Committee must meet and spell out rules under which H.R. 1561 will be debated and voted upon, including what if any amendments will be permitted.

House appropriators continue to oppose Section 5 of H.R. 1561, the provision of the bill that is designed to permanently end diversion by taking PTO funding out of the hands of appropriators. Section 5 would make all fee collections immediately available to the Office without appropriation.

Discussions are ongoing between the leadership of the Judiciary and the Appropriations Committees to find a compromise solu-tion. If such an agreement is reached before the bill is considered in the House, it is likely that it would be offered and approved as an amendment to the bill. If no agreement is reached, it can be expected that an amendment to strike section 5 will be offered. It is difficult to predict how such an up or down vote might come out. Those desiring to strike section 5 will likely frame the issue as one of breaking from budget discipline and taking the PTO "off budget", rather than as an issue of the pros and cons of diverting PTO user fee revenue to fund other programs.

Committee News

Amicus Briefs (Committee #605)

Richard P. Beem
Joseph N. Welch II, Co-Chairs

On February 5, 2004, the U.S. Court of Appeals for the Federal Circuit, sitting en banc, heard oral argument in Knorr-Bremse v. Dana "concerning the drawing of adverse inferences, with respect to willful patent infringement."
Richard P. Beem attended the argument and prepared the following summary for the Section.

Underlying the argument, there appeared to be an assumption that the Federal Circuit will overrule the adverse inference of willfulness now imposed when defendants assert the attorney-client privilege. The Court recognized that 29 of 30 amicus curiae argued for elimination of the adverse inference. Counsel for Knorr-Bremse admitted that under current law it is difficult for attorneys to render candid advice to their clients, a central theme of the ABA amicus brief.

The Court wants to preserve consistency between the law of willfulness, including the affirmative duty of due care imposed on accused infringers, and the law of privilege. The Court recognized that many of the amici would require accused infringers to obtain an opinion of counsel. But none of the parties urged such a requirement, and the Court seemed dubious about the value of pushing accused infringers into the arms of counsel.

The Court asked whether there should be any difference between failing to obtain an opinion and obtaining an opinion but refusing to disclose it, but the discussion failed to draw any clear distinction in result. It was agreed, however, that there are advantages for the accused infringer who obtains advice of counsel, e.g., the accused infringer can waive privilege and assert advice of counsel as a defense to willfulness.

The Court frequently referred to the "totality of circumstances" test, Read v. Portec, for determination of whether defendants satisfy their duty of due care, e.g., through investigation by the businessperson or the technical expert.

Is a "non-frivolous" or "substantial" defense sufficient to defeat willfulness? The Court seemed dubious, e.g., if blatant acts of copying are followed by newly developed litigation defenses. Is willfulness objective or subjective? Should the issue be decided by judge or jury? These questions were discussed, but no definitive answers were stated.

Counsel for the parties, not surprisingly, differed in their views as to whether the defendants' conduct in the case at bar amounted to willful infringement. At the end of the argument, the case was submitted.

Section Trip to China

Elizabeth Chien-Hale
Committee Chair
Cooperation with Foreign Patent Offices (Committee #109)

Elizabeth Chien-Hale is organizing a trip to the People's Republic of China early summer 2004 for interested Section members. The proposed dates are July 4-11, with four days in Beijing and two days in Shanghai for activities. A two-day
Guangzhou/Shenzhen extension can be arranged if there is interest.

The primary professional goal of this trip will be to establish communication channels with the various stakeholders in the
Chinese IP community. Since enforcement of IP rights is of serious concern to American companies manufacturing and conducting business in China, there will be an emphasis on meeting the relevant Chinese enforcement agencies to discuss the effectiveness of and possible improvements for the current system.

In Beijing, the task force plans to visit the State Intellectual Property Office, the Trademark Office of the State Administration for Industry and Commerce, and the National Copyright Administration, and the IP tribunals within the Beijing Intermediate and Higher Courts, and the People's Supreme Court. Visits to the IP Division of the General Administration of Customs, the newly formed Ministry of Commerce, and the Ministry of Information Industry are also planned. The Beijing portion of the trip will include a 1/2 day seminar on the comparative IP systems of the United States and China.

In Shanghai, the task force is planning to visit the local IP Administration (one or more of Shanghai Intellectual Property Administration, Shanghai Copyright Bureau, Shanghai Administration for Industry and Commerce, Shanghai Customs), and the local courts. The group will also host a reception for interested local and foreign companies to hear their IP concerns, and hopefully to provide some answers.

The All-China Patent Agents Association will be the group's host in Beijing, and Joseph Rogers, Committee #109 Sub-committee Chair, will coordinate the various activities in Shanghai. ABA's Asia Law Initiative has also graciously offered its assistance and support for the trip.

The cost of the trip is estimated at $2,500. This price includes round-trip airfare from San Francisco (or another convenient city), domestic airfare within China, hotel (lunch and breakfast included and some dinners), meetings, seminar materials, and ground transportation. Early reservation is recommended for securing favorable pricing and arrangement. Participants can also make their own travel arrangements. Non-Section members are welcome, but there will be an additional charge.
Interested individuals should contact Elizabeth Chien-Hale at ech@institute-ip-asia.org with questions or comments. At this early stage, the group's activities can be revised to suit and incorporate the interests of the trip participants.


ABA and AIPLA Meet the Trademark Office

Keith Sharkin
Section Member

"ABA and AIPLA Meet the Trademark Office" program will take place on March 11, 2004 from 9:00 a.m. to 5:00 p.m. at the Hilton Alexandria Old Town in Alexandria, Virginia.

Join Commissioner Anne Chasser, Judge David Sams, Lynne Beresford, Craig Morris and Chris Doninger from the U.S. Patent and Trademark Office as they provide updates on the Trademark Office, Madrid Protocol, electronic filing, prosecution issues, and TTAB practice. Afterwards, there will be a tour and reception at the new Patent and Trademark Office campus. For details, contact Keith Sharkin, Subcommittee Chair, Committee #203, PTO Affairs-Trademarks, at 212-556-2369 or ksharkin@kslaw.com.

Nominating Committee Announces Candidates

Edward G. Fiorito, Chair of the Section Nominating Committee reports that the following candidates have been nominated for the 2004-05 year.

Chair-Elect - E. Anthony Figg, Washington, DC. Mr. Figg currently serves as Section Vice-Chair.

Vice Chair - Susan Montgomery, Boston, MA. Ms. Montgomery currently serves on the Section Council.

Secretary - Gordon Arnold, Houston, TX. Mr. Arnold currently serves on the Section Council.

Financial Officer - Susan McGahan, Bedminister, NJ. Ms. McGahan currently serves on the Section Council.

Members of the Section Council for a four year term ending in 2008: Bob Armitage, Indianapolis, IN, currently Chair, Division IX - Publications & Public Education, Don Martens, Irvine, CA, currently Chair, Division IV - Related Legal Issues, Todd Dickinson, Washington, DC, currently Co-Chair, Committee #108 - Patent System Policy Planning and Barbara Grahn, Minneapolis, MN, currently Assistant to the Secretary. John Gresens, Minneapolis, MN, currently Chair, Committee #104 - Interferences, was appointed for the unexpired term of Susan Montgomery.

Per Section bylaws, Chair-Elect William L. LaFuze automatically assumes the position of Section Chair.
In addition to Chair Edward G. Fiorito, the Nominating Committee is comprised of Charles P. Baker of New York, NY and Cynthia E. Kernick of Pittsburgh, PA.

Additional nominations for any position may be made by petition signed by not less than 100 members of the Section, listed by their ABA ID number. The 100 names must be representative of at least three states and must indicate that the individual has agreed to the nomination. The petition must be sent to the Chair and the Secretary of the Section and must be received by these individuals not less than four months before the Opening Assembly of the Annual Meeting. The Opening Assembly will be held on Saturday, August 7, 2004 in Atlanta, Georgia.

Section Profile:
Edward V. Filardi

Ed Filardi joined the ABA's Section of Intellectual Property Law to enhance the opportunity to keep abreast of the law and to further his association with colleagues who were members of the Section. He remains a member of the ABA because it presents a unique opportunity to monitor the pulse of the entire IP profession particularly because of the interrelationship between the ABA IPL Section and the IP arms of other ABA Sections.

Ed's specific practice area for the past 30 years has been IP litigation largely in patent infringement cases. His focus for the last 10 years has been in the area of patent and technology litigation. His cases have involved a variety of technologies that include chemistry, pharmaceuticals, bio-technology, satellite control systems, MPEG-3, as well as a variety of less complex technologies, including consumer goods. Ed's particular expertise is in the trial of complex and technology related jury trial actions.

Ed believes the future of IP litigation and broadly dispute resolution is surely focused on the need to protect rights to the ever rapidly occurring advances of all phases of technology. As the breadth of technology expands, so must the law and so will the need for juris-prudence to protect the rights of inventors and creators to encourage future innovation and creativity. The Section of Intellectual Property Law is a vital monitor of technology trends and will remain in the unique position of providing a voice of legal experience that the judiciary can draw upon to administer justice and which legislators can rely upon to implement needed legislation.

A recent experience Ed had as Chair of our Section's Antitrust Committee #409 provides a perfect example of why he joined the Section, why he remains a member and why he is confident that our Section, perhaps more than any other IP organization, is positioned to provide worthwhile and timely analyses of current issues. During this Association year, Committee #409 has coordinated with the intellectual property committees of the Antitrust Section as well as the International Law Section on such matters as commentary on the October 2003 Report of the Study Group on the Japan Anti-monopoly Act and on HR 1086 relating to the Standards Devel-opment Organization Advancement Act. In addition, Committee #409 joined with the Antitrust Section in sponsoring a "Brown Bag" phone-in CLE program on damages simulations for antitrust and patent cases, a unique experience for our Section which we hope will be utilized more in the future.