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ADMINISTRATION: Investigating The Investigators

Intellectual Property
Senate Floor Action On Patent Bill May Slip
     Proponents of a Senate bill that would overhaul the U.S. patent system are backing off claims that the measure could make it to the floor this month, saying they are optimistic for action sometime before Memorial Day. A spokesman for the Coalition for Patent Fairness, which backs the bill and includes several communications and tech companies, said Senate Majority Leader Reid has indicated that the bill, sponsored by Judiciary Chairman Patrick Leahy, is "roughly the third or fourth in the queue," but debates over other matters "could take a while." Before the Easter recess, Leahy and other key Senate backers unveiled more than a dozen proposed amendments, most of which were minor or technical in nature. Another batch expected to be offered soon would address tougher issues like damage awards in infringement lawsuits and how patents are challenged, the coalition spokesman said. Key lawmakers are working on changes to the few proposals that have been problematic for the pharmaceutical and biotechnology sectors, small high-tech firms and labor unions, he said. Opponents of the current version of the bill were not as hopeful that agreement is imminent. Meanwhile, Commerce Secretary Gutierrez sent a letter to senators Thursday affirming the Bush administration's concerns over several sections of the bill. The most controversial provision pertains to how damages are awarded in infringement cases. In his letter, Gutierrez said the administration opposed "language that limits a court's discretion" but backed changes that "would guide courts to clearly identify the factors and evidence relevant" to determine damages.

Intellectual Property
Court Rules Against New PTO Rules
     A federal court in Virginia this week backed pharmaceutical giant GlaxoSmithKline in its challenge of rules unveiled by the Patent and Trademark Office last fall. The PTO rules were aimed at streamlining patent processing by limiting the number of continuation patent applications and claims that can be presented to the agency during a given examination. U.S. District Judge James Cacheris said the agency exceeded its rulemaking authority and issued a preliminary injunction. GlaxoSmithKline, which complained that about 100 of its pending applications would be jeopardized, said the judgment was "in support of innovation across all industries." A PTO spokeswoman said the agency was disappointed with the decision and is considering its next steps. Harold Wegner, an intellectual property attorney at Foley & Lardner, said he believed the continuation rules are "now finally dead" unless language to codify the changes is added to a pending Senate measure that would overhaul the U.S. patent system. The PTO is expected to make a push for inclusion of their rules in the bill.

Television
Boucher Warns About DTV Transition
     With the nation's shift to digital television signals less than 11 months away, Rep. Rick Boucher, D-Va., told the Consumer Electronics Association this week that the federal government and industry stakeholders need to do more to ensure a smooth transition. "There are very few deeply held liberties in America -- but the right to television coverage is one of them," said Boucher, a senior member of the House Energy and Commerce Committee. He added that a "nightmare" for a House member representing a rural area with a sizable elderly population -- such as his southwestern Virginia district -- is "to have his switchboard flooded with thousands of calls from angry constituents" who lost signals during the Feb. 17 switchover. The lawmaker reiterated his recommendation that the federal government provide funds for technical assistance about converter boxes, outdoor antenna upgrades and other DTV-related matters for citizens considered vulnerable to losing reception, such as seniors and rural residents. He said he also is concerned that the $5 million that Congress set aside for public outreach about the transition is far too low.

Security
Homeland Security Gives Maine An Extension On Real ID
     The Homeland Security Department announced this week that it reached an agreement with Maine under which the state will get a time extension to comply with the so-called Real ID law. The law requires states to verify the identity and citizenship of individuals before issuing them new, secure driver's licenses or identification cards. States had to get an extension from Homeland Security or else their licenses and identification cards would not be accepted after May 11 for federal purposes, such as flying or entering federal buildings. After the department earlier this week granted South Carolina an extension, Maine was the last holdout. "Maine, which had been the only state not granted an extension, committed today to take significant additional steps to achieve a level of security commensurate with REAL ID," the department said in a statement. All states have until Dec. 31, 2009, to upgrade the security of their driver's license information technology systems and to verify that applicants are legal U.S. residents. "Real ID still imposes an enormous unfunded mandate on states costing billions of dollars and raises privacy concerns that have yet to be fully addressed," Senate Homeland Security and Governmental Affairs ranking member Susan Collins, who represents Maine, wrote in an editorial in the Kennebec Journal. "Congress needs to resolve these funding and privacy issues during the extension period."

Cybersecurity
House Lawmakers Question DHS Cybersecurity Programs
     House appropriators took aim this week at the Homeland Security Department's cybersecurity programs, asking for clarification of who is in charge of them and questioning whether the department has enough jobs filled to meet its responsibilities.
     Homeland Security is responsible for securing federal computer networks under the Bush administration's massive, multibillion-dollar cybersecurity initiative. During a hearing on the department's budget request, House Homeland Security Appropriations Subcommittee Chairman David Price, D-N.C., said confusion exists over how the department is coordinating its work. The department has an office of cybersecurity and communications, headed by an assistant secretary, Gregory Garcia. The office includes a national cybersecurity division. But in March, Homeland Security Secretary Chertoff announced creation of a national cybersecurity center under the department's office of policy, headed by Rod Beckstrom. "It does raise the issue, who's in charge of this initiative?" Price said. Robert Jamison, the department's undersecretary for the national protection and programs directorate, said Garcia is responsible for installing defense systems on government networks, while Beckstrom is responsible for understanding what kind of threats and attacks are occurring across the federal government and feeding that data to Garcia's office. House Homeland Security Appropriations Subcommittee ranking member Harold Rogers, R-Ky., also questioned whether Jamison's division has adequate staffing, saying its ranks are only 71 percent filled. Jamison acknowledged staffing levels need to be improved.

Security
Homeland Security Cites Progress On Communications Problems
     A top Homeland Security Department official told a House Homeland Security subcommittee that the agency has made significant progress toward providing first responders with interoperable radio technology but said "culture" was part of the problem. During a hearing, Jay Cohen, the department's undersecretary for science and technology, said first responders were not always enthusiastic about sharing communications. To a large extent, "technology is not the problem with interoperability ... it's the culture," he said. Cohen said that although the department was preparing to test a "phone-home" interoperable system for first responders, it was unclear whether it would be widely accepted. Cohen said the reluctance of police personnel to let other first responders listen in on their communications was understandable in view of the "arrest-and-convict" nature of law enforcement operations. The need for promoting interoperable communications systems for first responders was dramatically demonstrated on Sept. 11, 2001, when many of the firefighters in New York City's World Trade Center's North Tower failed to receive an emergency evacuation order broadcast over police radio shortly before the building collapsed.

Labor
Key Lawmakers Concerned With High Use Of H-1B Visas
     Senate Majority Whip Durbin and House Judiciary ranking member Lamar Smith both are concerned enough about foreign companies' high use of H-1B visas in the United States that they are willing to consider limiting the visas for skilled foreign workers to U.S. companies. "Eight of the top 10 companies seeking H-1B visas in the last round were foreign companies," Durbin said this week. He noted that some Indian companies are bringing Indian engineers into the United States for a few years and then sending them back to India. "Trust me, that is not what we have in mind with H-1B visas." Durbin and Finance ranking member Charles Grassley, R-Iowa, sponsored a bill to eliminate employers' ability to "outsource" H-1B workers and limit the percentage of H-1B workers that an employer can hire. Smith, who recently introduced a bill to triple the current annual H-1B cap for two years, cited a similar statistic on foreign companies in an interview with CongressDaily. "Aren't we supposed to be helping American companies with this?" he asked. Smith said he views his H-1B visa increase proposal as a "quick fix" to a shortage that has high-tech and manufacturing companies scrambling, adding that lawmakers should take a serious look at limiting the program to U.S. companies as part of a broader bill. Barring foreign companies with U.S. operations from H-1B visas is a harsh move that would likely meet with considerable opposition from both Republicans and Democrats, as well as the business community, because those U.S. subsidiaries create jobs.

Labor
Lawmaker Pushing To Increase Seasonal Workers
     Rep. Charles Boustany, R-La., this week started collecting signatures on a petition to bring to the House floor a Democratic-sponsored bill that would give seasonal employers easier access to low-skilled temporary foreign workers. The bill, sponsored by Rep. Bart Stupak, D-Mich., would exempt all foreign workers who have held H-2B visas from the annual 66,000 cap. The allotment, which is divided into winter and summer segments, was exhausted within weeks of the visas becoming available. In 2005, Sen. Barbara Mikulski, D-Md., won approval of a two-year exemption for previous H-2B holders, but it expired last year. Stupak said he will not sign Boustany's petition and added he is hopeful that Democratic leaders will move his measure. While some Democrats are sympathetic to the problems facing seasonal employers -- who might be cut off from their entire temporary workforce -- the H-2B debate will be tied in with other immigration issues, such as the current illegal immigrant population, that are far more controversial. Democrats and labor advocates also say the H-2B program is rife with abuses and should not be expanded until those problems are addressed.

E-Commerce
Law Banning Transfers For Internet Gambling Is Criticized
     A law banning the transfer of funds from U.S. banks and credit unions to Internet gambling Web sites was sharply criticized this week at a House Financial Services subcommittee hearing. Opponents on Capitol Hill and in the industry have slammed the law for failing to sufficiently define terms like "unlawful Internet gambling" and "restricted transactions," which could hamper financial institutions' ability to adhere to rules being developed by the Federal Reserve and Treasury Department. Companies impacted might respond by "over blocking transactions to protect themselves," said Domestic and International Monetary Policy Subcommittee Chairman Luis Gutierrez, D-Ill. Financial Services Chairman Barney Frank called the law "an intrusion into personal liberty" and said it would set "a precedent of a federalization of the Internet based on the moral views of members of Congress." Frank, who has introduced a bill to exempt licensed operators from the gambling ban, said Congress wrongly "enlisted payment systems and the banks of America to be our anti-gambling cops." But Financial Services ranking member Spencer Bachus, who backs the ban, noted that FBI and Justice Department officials have testified that Web gambling is a vehicle for money laundering and encourages drug trafficking and tax evasion. Still, Federal Reserve and Treasury Department officials said they have struggled with the legislation's ambiguity.

Trade
Bush Plans To Force Vote On Colombia
     President Bush plans to force a vote on the U.S.-Colombia Free Trade Agreement by sending it to Capitol Hill regardless of the outcome of efforts to reach an accommodation with Democrats on a trade adjustment assistance package, according to administration officials. White House aides said the measure could be sent to Capitol Hill as early as next week. The move would set the stage for an acrimonious election-year trade battle that both sides had hoped to avoid. House Speaker Pelosi and other Democrats have warned Bush against sending them the trade agreement before they agree to take it. "We're sending that agreement forth because we've done everything everyone's asked of us and it deserves a vote," said Commerce Department Undersecretary for International Trade Christopher Padilla. Democratic leaders have suggested they would not give the green light to Bush at least until a TAA accord was struck. But top House Democratic aides also said consternation over having a trade vote this year is so great that a TAA deal alone is probably not enough to get Pelosi to willingly schedule a vote on the Colombia deal. In addition, some rank-and-file Democrats remain troubled by ongoing violence in Colombia. Under presidential trade negotiating authority rules, once President Bush sends the trade agreement, Congress must vote on the measure within 90 days. Administration officials said they would continue working on TAA if a deal is not struck before Bush submits the Colombia agreement. But Sen. Olympia Snowe, R-Maine, who co-authored a TAA plan with Finance Chairman Max Baucus, questioned the White House commitment to negotiations. Meanwhile, Consumer Electronics Association chief Gary Shapiro slammed House Democratic leaders this week for holding up the agreement, which would benefit his industry because it would nix the 15 percent tariff U.S. exporters pay to do business with Colombia.

Trade
Business Groups Blast Import Rule Change
     A broad business coalition including companies ranging from Boeing Co. to Nike has mobilized to block a proposed Customs and Border Protection rule they argue will raise taxes on U.S. importers. Citing an opinion issued last year by the World Customs Organization, the agency quietly proposed a rule in January that would base duties, fees and taxes on imports on the value of the last transaction in a series of sales, rather than the "First Sale" as has been the practice since 1979. In other words, U.S. importers would pay levies based on the higher price of a product just before it enters the country, rather than the lower price when it first enters the supply chain. The Save First Sale coalition argues this approach flies in the face of two decades of legal interpretation and congressional intent and will drive up the costs of their products. The coalition said Congress must sign off on any changes to the law, rather than allow the policy to be dictated administratively based on nonbinding commentary from an international body. The customs agency has extended the public comment period until April 23. The coalition is using that time to try to convince the agency to withdraw the rule, and barring that, to urge Congress to codify the existing "First Sale" doctrine. Finance Chairman Max Baucus, who is preparing a Customs reauthorization bill, said last month that he had "serious concerns" with the rule.

Budget
Efforts To Improve IT Security At VA Producing Mixed Results
     The Veterans Affairs Department's chief information officer delivered a mixed message to the House Military Construction-VA Appropriations Subcommittee this week, telling lawmakers that the agency has made great progress since its massive data breach two years ago, but many information technology challenges remain. The Bush administration requested more than $2.4 billion in FY09 to support department IT systems development and operations, an increase of 18.9 percent over FY08, said Assistant Secretary for IT Robert Howard. The request reflects the department's IT realignment and centralization efforts, he said. Military Construction-VA Appropriations Subcommittee Chairman Chet Edwards, D-Texas, said before the May 2006 incident, which could have exposed the personal information of an estimated 26.5 million veterans, IT security and "meaningful oversight" were lacking. During his tenure, which began in September 2006, Howard has flagged and tried to address numerous needed changes, especially in the areas of data security and privacy. The result has been a more standardized approach for various VA departmental activities; an acceleration of e-health record management to meet national health IT standards; and improved interoperability with the Defense Department, Howard said. Military Construction-VA Appropriations Subcommittee ranking member Zach Wamp, R-Tenn., said continued weaknesses and problems acknowledged by the VA's inspector general and confirmed by Howard were disheartening. IT investments are important, but "this is an example where the money is not enough," Wamp added.

E-Government
Plan To Use Handheld Computers For Census Dropped
     The Census Bureau is dropping a problem-plagued plan to use handheld computers to conduct the 2010 Census, according to Commerce Secretary Gutierrez. "We will move forward with the recommendation to use a paper-based" non-response follow-up system, Gutierrez said in prepared testimony for a House subcommittee hearing this week. The bureau's plan to use handheld computers for the decennial census has been plagued by delays and cost overruns on an initial $600 million contract awarded to Florida-based Harris Corp. to develop the handheld devices. In congressional testimony, Gutierrez has criticized the bureau's management of the Harris contract. Gutierrez said the decision to revert to a paper-based census stems from consultation with Commerce's inspector general, GAO and a panel of experts. The handheld-devices were to be used by temporary Census employees to follow up with residents who do not mail in census forms. The decision to cancel the plan to use handheld computers will likely increase congressional scrutiny of the bureau's preparations for the census but it drew approval from House Oversight and Government Reform ranking member Tom Davis, who has regularly questioned the bureau's planning. "Now, with hard deadlines upon us and the integrity of the census hanging in the balance, abandoning the automated non-response follow-up for a paper-based effort seems the only prudent course," he said.