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The party switch in the U.S. Senate may have rattled most political insiders — with at least one notable exception. The IP community seems just as happy with Sen. Patrick Leahy, D-Vt., chairing the Senate Judiciary Committee as they were when Sen. Orrin Hatch, R-Utah, was at the helm. “Hatch and Leahy share a lot of common ground,” said Jason Mahler, vice president and general counsel of the Computer & Communications Industry Association. “Leahy has been a friend of the tech community and sympathetic to content holders,” Mahler added. “You can’t assume what he will do on any given issue.” The common ground among Democrats and Republicans on IP issues means lobbyists who focus on the area probably won’t have to change their strategy all that much. That’s good news for them, because a boatload of IP bills is floating through Congress this session. They range from bills dealing with the use of copyrighted material in online — or “distance” — education to funding for the U.S. Patent and Trademark Office. Both Leahy and Hatch appear to have similar priorities for what bills will be considered. The two senators, in fact, co-sponsored the first IP bill to clear the Senate this year: the “Technology, Education and Copyright Harmonization Act of 2001 (S. 487), the bill that allows educators to use copyrighted materials for online education. “The one most likely for passage, hopefully, is the patent office funding bill,” said Jonathan Band, a partner in Morrison & Foerster’s Washington, D.C., office. He added that the Senate education measure also has a shot at being adopted by the full Congress. DISTANCE EDUCATION The so-called distance education bill was hardly a shoo-in when Hatch and Leahy introduced the measure in March. The publishing industry, worried that the bill would undercut its educational market, was fiercely opposed to it. But over the course of a month, representatives of the publishing and education communities hammered out a bill both sides could live with. The bill provides an exemption to the copyright law allowing educators to use materials for online education without being subject to infringement claims. Publishers wanted to “clarify the scope of the exemption” so that online education couldn’t substitute for purchasing instructional material, said Allan Adler, vice president of legal and government affairs at the Association of American Publishers. “At the same time we wanted appropriate safeguards” to prevent unauthorized distribution of works. To satisfy these concerns the bill was changed to specifically cover “mediated instructional activities.” Thus, the legislation would not cover use of material for self-learning exercises. Adler said the two sides also agreed to limit the exemption to a “reasonable portion” of a copyrighted performance and to displays typically used in a live classroom. The bill further specifies that educators must use technological measures to prevent students from retaining the work beyond the class term or distributing it to others. The publishing industry, joined by the motion picture, software and recording industries, gave their nod of approval to the revised bill, as did the education and library communities on the other side of the table. The bill cleared the Senate on June 7 and was subsequently sent to the House Subcommittee on the Courts, the Internet and Intellectual Property. Despite the agreement among the various parties, the bill may be derailed in the House. Rep. Rick Boucher, D-Va., introduced a separate distance education bill that adds an exemption for libraries. It also deletes a provision in the Senate bill requiring the PTO to submit a report describing technology measures that could be used to protect copyrighted works online. Boucher’s move annoyed some lobbyists involved in crafting a final bill. “Every little comma and period was negotiated,” said Keith Kupferschmid, IP counsel for the Software & Information Industry Association. “To include libraries now and upset the apple cart is frustrating.” He said the parties had discussed extending the exemption to libraries but “universities, the copyright office and the Senate said ‘No, libraries should not be included.’ “ PTO IN THE SPOTLIGHT On the House side, legislators have introduced a spate of bills to improve the PTO’s operations. One measure with widespread support would block the diversion of PTO revenue to other government agencies — at least for one year. Introduced by Rep. Howard Coble, R-N.C., the bill authorizes the PTO to receive funding equal to the fees it collects in fiscal 2002. Since the agency became fully fee-funded in 1991 Congress has withheld an increasing amount of PTO revenue for use in other government agencies. The Bush administration’s proposed 2002 budget calls for withholding $207 million of the agency’s revenue. For the IP community, PTO funding has become a cause celebre. In May, a group of 61 companies and 18 associations, members of the 21st Century Intellectual Property Coalition, sent House and Senate members a letter objecting to the diversion of PTO revenue. Several IP groups say they hope James Rogan, President Bush’s choice to head the PTO, has the political influence to end this practice. Bush nominated the former California congressman to fill the post in May. Among other PTO-related legislation, Coble, chair of the IP subcommittee, introduced two bills intended to improve the PTO’s procedures for re-examining issued patents. One bill (H.R. 1866) would overturn the U.S. Court of Appeals for the Federal Circuit’s 1997 decision in In re Portola Packaging Inc., 122 F.3d 1473. The ruling prohibits an individual from submitting prior art in a re-examination proceeding if the art was previously considered by the patent office. Another bill (H.R. 1886) would allow third parties in certain re-examination proceedings to appeal the PTO appeal board’s decision to the Federal Circuit. Currently, only patent holders are able to appeal. San Jose, Calif., Democrat Zoe Lofgren introduced a third House bill that would extend the grounds upon which someone could request a re-examination. Two other bills would establish an entirely new procedure for challenging issued patents. Introduced by Los Angeles area Democrat Howard Berman, the Patent Improvement Act of 2001 and the Business Method Patent Improvement Act of 2001 would leave it up to an administrative judge rather than an examiner to determine the validity of an issued patent. The business method bill, similar to legislation Berman introduced last year, also would allow anyone to protest the issuance of a patent while it is under review. Former PTO director Q. Todd Dickinson said that provision is a nonstarter. “We spent years getting Japan and Europe to change their laws” to eliminate pre-grant opposition which severely bogs down the system, Dickinson said. The business method patent legislation is likely to face an uphill battle. The patent bar opposes it, and industries are divided on whether the bill would be beneficial. Some IP attorneys also object to singling out one technology for unique treatment by the patent office. “I don’t think you should determine the worth of an invention based on its classification,” said Dickinson, who is now a partner at Washington, D.C.’s Howrey Simon Arnold & White. He said the measure also conflicts with the TRIPS (Trade-Related Aspects of Intellectual Property Rights) treaty, which prohibits discriminating among technologies. DATABASE BILL ON HORIZON After failing three times, Congress again is taking a shot at extending copyright protection to databases. Reps. F. James Sensenbrenner Jr., R-Wis., and Billy Tauzin, R-La., chairmen of the Judiciary and Energy and Commerce Committees respectively, plan to introduce legislation again this year despite resounding opposition from universities, libraries and companies that rely on information compiled in databases. As a first step, committee staffers organized a series of 10 meetings with eight opponents and eight proponents of the legislation. Those in favor of the bill include the Software & Information Industry Association, Reed-Elsevier, eBay Inc., Celera Genomics Group, the American Medical Association and the Nasdaq. Opponents include the Association of American Universities, the American Library Association, the Computer & Communications Industry Association, Bloomberg, Yahoo Inc. and AOL Time Warner Inc. “The meetings served to delineate the stark differences we have on these issues,” Mahler of the computer industry group said. “It’s hard to get a consensus on what terms mean.” Database owners say they want to prevent others from pirating their collection of information. But academics, researchers and others contend that no one can own facts. Congress has introduced database bills in three previous sessions. At one point database protection was included in the digital copyright bill but legislators withdrew it in order to win passage of the legislation. The 1998 copyright bill has itself sparked controversy, and many in the IP community expect legislation to clarify or alter the law. The anti-circumvention provision, which prohibits anyone from circumventing technology intended to control access to copyrighted works, has sparked litigation and is most likely to be addressed in future legislation. The copyright office also is expected to issue a report in July describing the impact the law and new technology has had on two provisions of the Copyright Act. One provision deals with the first sale doctrine (which permits people who own a physical copy of a work to dispose of it as they wish), and the other allows consumers to make copies of their computer programs. Adler of the Association of American Publishers said people expect that the report — which was mandated by the Digital Millennium Copyright Act — will trigger proposed legislation.

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