Mark T. Banner
Section Chair, 2002-03

"I must 'Just Say No.'" Those are not the words of a former First Lady, but rather the more contemporaneous statement made by Congresswoman Zoe Lofgren (D-Calif.) at the April 3, 2003, hearing on the PTO Fee Bill and Strategic Plan. Congresswoman Lofgren directed her point not only to the witnesses at the hearing, but more generally to the intellectual property Bar at large and to her fellow members of Congress.

"Fee diversion is wrong," she said. "It is an unfair tax on innovation and an unfair tax on investment," she said. In doing so she restated, almost exactly, the position the ABA has been taking on using PTO user fees for purposes other than the PTO. Your Section of Intellectual Property Law, and the ABA itself, has long fought against fee diversion and continues its opposition to any fee increase that raises more in fees than is appropriated back to the PTO to allow it to improve its services.

In fact, on April 9, 2003, I wrote to the Chairman of the Subcom-mittee on Courts, The Internet, and Intellectual Property of the Committee on the Judiciary (Congressman Lamar Smith, R-Texas) and to the ranking member of that Subcommittee (Congressman Howard Berman, D-Calif.) repeat-ing the views that the ABA opposes the continued diversion of PTO user fee revenue to fund programs unrelated to the functions of the Office.

Congresswoman Lofgren expresses a sound viewpoint. In her statement to the Subcommittee she pointed out that patent applicants, like all of their fellow citizens, are willing to pay their fair share in regular taxes as well as their fair share to obtain a patent. But, she added, they should not, through PTO user fees, subsidize unrelated programs. "Until we solve the problem with fee diver-sion once and for all," she said, "I cannot support this bill or any other one that unfairly taxes innovation." The bill she was referring to is the "United States Patent and Trademark Fee Modernization Act of 2003," H.R. 1561, the bill that would substantially increase the fees in the PTO and change its overall structure. (See related story in this issue).

What is interesting in the political environment is that there is widespread support for the patent system on the Subcommittee, from both the Democrats and Republicans. The Subcommittee Chairman, Congressman Smith, pointed out that the proposed increase in fees was developed in part because of the funding shortfalls at the PTO that have resulted from revenue diversion. "Everyone in this room is aware of the ongoing appropriations practice of using a portion of PTO fee revenue to subsidize other programs unconnected to the agency. None of us like it," he said. The fee bill would be a way to make certain that the PTO has the resources it needs to serve the inventors and trademark holders of the United States, he added. He noted that the proposed fee sched-ule would generate an additional $201 million in revenue, an aver-age fee hike of roughly 15%. This "is not insignificant to those who write the corresponding checks," he said.

The ABA and the leaders of this Section will be conducting a full court press in Washington this Spring to ensure that this message is heard not only in the Subcommittee, but throughout the halls of Congress, in both the House and the Senate. The position taken by the ABA is similar to, but perhaps a bit more uncompromising than, the opposition to fee diversion voiced by other organizations. Our view has been that once diversion is ended and adequate funding is ensured for the PTO the various elements of the Strategic Plan can be tested and, if appropriate, implemented. If elements of the PTO Strategic Plan fail to prove to be more efficient or beneficial to users, they should not be imple-mented on a wide scale basis, but the fee revenue for solving the problems with the PTO would be in place.

And so the message of a former Republican First Lady and a current, Democrat Congresswoman rings true to our ears. When it comes to fee diversion we all should "Just Say No."

"Just Say Yes"

One service that Section mem-bers can "Just Say Yes" to is using the Internet and resources offered by the ABA. The Section's home page, (www.abanet.org/intelprop) contains a wealth of information of interest to intellectual property lawyers of all types. In addition to having links to all of the Legislative, Executive and Judicial branch activities (including our testimony and our Amicus briefs), the web page offers useful information for employment opportunities, information on a career in IP law, e-mail discussion groups (on legislative activities, on international practice, for law students, and for law professors), as well as information on the Committees of the Section and the activities being undertaken. It also includes copies of the Annual Reports of the Section from 1996 to present and, of course, information on upcoming meetings. These features are available to all members. For example, the "career opportunities' section allows a firm, company, school, or governmental agency seeking to recruit an intellectual property attorney to post a "positions available listing" free of charge. The information will stay on the site for 90 days or until notified that the item should be removed. More of our members should take advantage of that opportunity.

Additionally, our Section web page includes links to the WestLegalEdcenter, which provides on line accredited CLE in a broad range of areas, including intellectual property law. Now CLE credits can be obtained online without ever leaving your desk or office.

In addition to the commercial CLE available, the ABA CLE page (www.abanet.org/cle) is the gate-way for a wealth of both free and fee-based CLE on a wide variety of topics, including intellectual property. Free offerings are available in conjunction with articles that appear in the ABA Journal. For example, the ABA offers a series of free, on line CLE through its ABA Connection Teleconference Series. These are 60-minute companion pieces to various articles published in the ABA Journal. Information is available on the website or by calling the ABA. In addition, many conference papers are available free of charge for downloading.

Finally, but importantly, the web page provides an easy way to join either the Section or a committee of the Section. Thus it gives a conven-ient way for members who wish to become more involved in the professional aspects of the world of intellectual property law to get involved, and to "Just Say Yes."

House Committee Formally Introduces PTO Fee Proposal

By Hayden W. Gregory
Section Legislative Consultant

On April 2, Congressmen Lamar Smith and Howard Berman, Chairman and Ranking Minority Member, respectively, of the House Subcommittee on Courts, the Internet, and Intellectual Property, formally introduced a bill to revise the patent user fee structure now in effect. The bill, H.R. 1561, the "United States Patent and Trademark Modernization Act of 2003," is, with one change, the draft bill prepared by the PTO and sent to Congress by the Bush Administration in February. The change is to move the earliest effective date to October 1, 2003, from the March 30, 2003 date proposed by the PTO. This change was in response to opposition to the earlier date from PTO customer groups. Noting that PTO funding for fiscal year 2003, which ends on September 30, is already set, these groups argued that any additional revenue collected before October 1 would inevitably be diverted to fund other programs.

H.R. 1561 is a revised version of a PTO proposed bill first sent to the Congress last June. That draft bill and the operational changes it was designed to help implement came under considerable criticism by the Section and other witnesses at a July 18, 2002 hearing of the IP Subcommittee. The most fundamental and near universal objection expressed by the user community was that the fee proposal and Strategic Plan called for continuation of user fee diversion. Other objections were too excessively high fees for multiple claims, plans for a wholesale shift to out-sourcing patent searches to private contract firms, and a proposal to separate application and examination fees in order to encourage deferred examination.

As a result of these objections, Congress did not take up the PTO fee bill last year, Howard Coble, then chairman of House IP Subcommittee, suggested in an August 2002 letter to PTO Director Rogan that he work with the user com-munity to address its concerns. Reports on progress in this regard are found in the January-April editions of the Chair's Bulletin. Sig-nificant changes were made in both the fee bill and the Strategic Plan. The revised proposals that result are available on the PTO website, along with summary highlights of those changes. On April 3, numerous detailed program papers regarding individual components of the Strategic Plan were posted.

On April 3, the House IP Subcommittee held a hearing on H.R. 1561, which addresses both the bill and the interrelated Strategic Plan. In addition to Director Rogan, witnesses at the hearing rep-resented AIPLA, IPO, and the PTO examiners' union. Witness statements are available on the House Judiciary Committee website at
www.house.gov/judiciary/courts.htm.

On April 9, Section Chair Mark Banner wrote to IP Subcommittee Chairman Smith and Ranking Member Berman, expressing views of the Section and of the ABA on components of the fee bill and Strategic Plan. The letter notes with approval a number of changes made in the bill and Plan in response to comments from the Section and other user groups. It ex-presses support for implementation of the Strategic Plan and enactment of the fee bill, provided the bill is amended to ensure that it does raise revenue in excess of the amounts that the Administration and Congress plan to make available for the exclusive use of the Office.

These views are similar to those expressed by AIPLA and IPO at the April 3 hearing, except that the Section statement calls for legislative action within the context of the fee bill to end diversion now. AIPLA and IPO support enactment of the fee bill without provisions calling for an immediate end to diversion, but with a "sunset" provision that would roll back fees after three years if diversion has not ended.

Copies of H.R. 1561 and of the Banner letter to Congress are posted on the Section website.

San Diego Program to Feature Practical Tips on Patent Law

The one-day CLE program, Prac-tical Tips on Enforcing and Defending Patents, makes its way to San Diego on June 17, 2003 at the Loews Coronado Bay Resort, immediately preceding the 10th Annual Summer IPL Conference.
The program will feature top professionals from the IP field who will provide practical advice on dealing with the "nuts and bolts" of every day patent practice.

The Practical Tips series, sponsored by the Section's Young Lawyers Committee, is now in its sixth year.
The advance registration deadline for the June 17th Practical Tips on Enforcing and Defending Patents program is June 4, 2003.

For complete program information and to register online visit the program website, www.abanet.org/
intelprop/2003p-tips_sd.