<DOC>
[108 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:95176.wais]
S. Hrg. 108-557
CONFIRMATION HEARING ON THE NOMINATION OF JONATHAN W. DUDAS, NOMINEE TO
BE UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR
OF THE UNITED STATES PATENT AND TRADEMARK OFFICE
=======================================================================
HEARING
before the
COMMITTEE ON THE JUDICIARY
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
MAY 6, 2004
__________
Serial No. J-108-73
__________
Printed for the use of the Committee on the Judiciary
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COMMITTEE ON THE JUDICIARY
ORRIN G. HATCH, Utah, Chairman
CHARLES E. GRASSLEY, Iowa PATRICK J. LEAHY, Vermont
ARLEN SPECTER, Pennsylvania EDWARD M. KENNEDY, Massachusetts
JON KYL, Arizona JOSEPH R. BIDEN, Jr., Delaware
MIKE DeWINE, Ohio HERBERT KOHL, Wisconsin
JEFF SESSIONS, Alabama DIANNE FEINSTEIN, California
LINDSEY O. GRAHAM, South Carolina RUSSELL D. FEINGOLD, Wisconsin
LARRY E. CRAIG, Idaho CHARLES E. SCHUMER, New York
SAXBY CHAMBLISS, Georgia RICHARD J. DURBIN, Illinois
JOHN CORNYN, Texas JOHN EDWARDS, North Carolina
Bruce Artim, Chief Counsel and Staff Director
Bruce A. Cohen, Democratic Chief Counsel and Staff Director
C O N T E N T S
----------
STATEMENTS OF COMMITTEE MEMBERS
Page
Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah...... 3
prepared statement........................................... 53
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont. 4
prepared statement........................................... 58
PRESENTER
Hyde, Hon. Henry J., a Representative in Congress from the State
of Illinois presenting Jonathan W. Dudas, Nominee to be Under
Secretary of Commerce for Intellectual Property and Director of
the U.S. Patent and Trademark Office........................... 1
STATEMENT OF THE NOMINEE
Dudas, Jonathan W., to be Under Secretary of Commerce for
Intellectual Property and Director of the U.S. Patent and
Trademark Office............................................... 5
Questionnaire................................................ 8
QUESTIONS AND ANSWERS
Responses of Jonathan W. Dudas to questions submitted by Senators
Leahy and Durbin............................................... 26
SUBMISSION FOR THE RECORD
Hyde, Hon. Henry J., a Representative in Congress from the State
of Illinois, prepared statement................................ 54
CONFIRMATION HEARING ON THE NOMINATION OF JONATHAN W. DUDAS, NOMINEE TO
BE UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR
OF THE UNITED STATES PATENT AND TRADEMARK OFFICE
----------
THURSDAY, MAY 6, 2004
United States Senate,
Committee on the Judiciary,
Washington, DC.
The Committee met, pursuant to notice, at 2:37 p.m., in
Room SD-226, Dirksen Senate Office Building, Hon. Orrin G.
Hatch, Chairman of the Committee, presiding.
Present: Senators Hatch and Leahy.
Chairman Hatch. Because the Chairman has a vote on over in
the House, I will forgo my statement for now, and I hope
Senator Leahy will forgive me for starting early, but I know
you have to catch a vote.
So we are honored to have you here. You have been one of my
heroes for a long, long time, and I am just grateful to have
you here, Henry, and we look forward to your testimony.
PRESENTATION OF JONATHAN W. DUDAS, NOMINEE TO BE UNDER
SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR OF
THE UNITED STATES PATENT AND TRADEMARK OFFICE, BY HON. HENRY J.
HYDE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS
Representative Hyde. Thank you very much, Senator. It is a
great honor to be in your chambers.
It is a pleasure to be here today to support the
President's excellent choice for the crucial position of Under
Secretary of Commerce, Jon Dudas.
I have known Jon for almost a decade. After he graduated
from law school at the University of Chicago, he came to
Capitol Hill and worked in my Congressional office as
legislative counsel. When I first became Chairman of the House
Judiciary Committee, Jon moved over as counsel to the
Subcommittee on Courts and Intellectual Property, which has
jurisdiction over the complex issues of patent law. Shortly
thereafter, I named him staff director and deputy general
counsel of the full Judiciary Committee. And during those
extremely busy and trying years for Congress and the Committee,
I came to know Jon very well, and I became personally
acquainted with his strong leadership, tremendous loyalty,
unwavering integrity and the ability to accomplish his assigned
mission under tremendous pressure.
When I first got to Congress, I learned a very important
lesson. If you want something done, you talk to the Member and
then you go to the staffer who makes the Member look good.
During his service on Capitol Hill, Jon was one of the people
who very often made me look good.
In his position on the Judiciary Committee staff, Jon
helped me manage the most productive Committee in the Congress,
more than one out of five bills considered by the House during
the 105th and 106th Congress went through the Judiciary
Committee. Our Conference relied upon him to help achieve some
of their most important goals during that period.
So it is with mixed feelings that I encouraged Jon to leave
the Committee staff when the Speaker asked him to serve as his
chief floor manager and legal policy advisor to the House
Leadership. Jon played a critical role in advancing legislation
to support the war on terror.
Jon left the Hill when our former colleague, Jim Rogan, was
appointed to be Under Secretary of Commerce and Director of the
U.S. Patent and Trademark Office. As the assistant secretary
immediately under Jim Rogan, Jon played an integral part in
implementing the President's management agenda and in
developing the 21st Century Strategic Plan--a comprehensive map
to move the Patent and Trademark Office from its crisis
situation to one of improved quality, quicker issuance of
patents and increased deficiency. His ability to relate and
work well with others and his good relationship with Members of
Congress will be critical in achieving the difficult task of
passing the administration's fee bill that will implement the
strategic plan. Just as important, because he has been serving
as Under Secretary Rogan's right hand for the last 2 years and
currently as Acting Under Secretary, Jon will provide the
continuity that is necessary at the Patent and Trademark
Office.
The issue of this Government's position on patents is a
critical one in this ever-expanding world of scientific
progress. I can think of no one better qualified to lead the
Patent and Trademark Office than Jon. I urge the Committee to
confirm this fine public servant as Under Secretary of Commerce
so that he may continue to serve the best interests of the
American people.
I thank you again, Senators, both Senators, two very good
Senators, I might add--get a commercial in for both of you--but
thank you for letting me be here today.
Chairman Hatch. Thank you, Chairman Hyde. We are grateful
that you took time to come over, and we all respect you over
here. We have watched you through the years do so many good
things and agree with you. When you were Chairman of the
Judiciary Committee over there, they did a massive amount of
work and very, very good work at that.
So thank you for coming.
Senator Leahy. I want to thank you for being here, too, Mr.
Chairman. You and I have been friends for so long, probably
back even to the days when our hair was dark and I actually had
some.
[Laughter.]
Representative Hyde. You were rather bushy-haired, as I
recall.
Senator Leahy. Yes, rather.
Chairman Hatch. I have been here 28 years, and I do not
recall any hair, I will tell you.
[Laughter.]
Senator Leahy. Henry has been here a long time. But we have
been dear friends throughout that time, and I did note one of
the things you said about our staff make us look good. Here, in
my office, I consider myself merely a constitutional impediment
to the staff who really do all of the work and do it extremely
well.
You honor us by being here. Thank you for coming over.
Representative Hyde. Thank you, Senator, and thank you,
Senator.
Chairman Hatch. We will let you get back to the House. We
know how important it is for you.
OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM
THE STATE OF UTAH
Chairman Hatch. Well, we will continue. We are grateful
that we have had Chairman Hyde here. We all respect him and
think so highly of him.
Now, we welcome Jon Dudas to the Committee. I know him
well, and I am impressed with his qualifications, and I commend
the President for nominating such a fine individual to the post
of Under Secretary of Commerce for Intellectual Property and of
course Director of the United States Patent and Trademark
Office. I also welcome his wife, and his children and family
and friends here with us today as well and other guests.
Before I continue, I would like to of course express again
my regard for Chairman Hyde, and that he would take the time to
come over here, that speaks well of you, Mr. Dudas. I know how
busy his schedule is, and I know how difficult it is for him or
for any Member of the House to come all the way over here. So
we are grateful for that.
I have reviewed the record of Mr. Dudas, and I find him to
be an excellent choice for this position. Permit me just a
moment to highlight his distinguished background.
Upon graduation from the University of Chicago Law School
in 1993, with honors, Mr. Dudas joined the law firm of Neal,
Gerber & Eisenberg, LLP. In 1995, he joined the staff of
Representative Henry J. Hyde as legislative counsel and then
joined the staff of the United States House Judiciary
Committee, Subcommittee on Courts and Intellectual Property as
a counsel.
From 1997 to 2001, he served as a staff director and deputy
general counsel to the full United States House Committee on
the Judiciary. He then joined Speaker J. Dennis Hastert's staff
as counsel for legal policy and the senior floor assistant in
2001.
In 2002, he became Deputy Under Secretary of Commerce for
Intellectual Property and Deputy Director of the United States
Patent and Trademark Office. He has since served as the Acting
Under Secretary since January 11th, 2004.
Now, Mr. Dudas is taking on a very big assignment because
intellectual property plays a key role, if sometimes an
unappreciated role, in the United States economy. But those of
us who deal with it on a daily basis--or at least very, very
often--know what a key role this is and how important it is for
the country, and we commend you for having the confidence of
the President in receiving this nomination.
The issuance of patents and trademarks reflect the creative
genius of America's inventors. Our Nation is respected
worldwide as the leader in technological innovation and product
development. It is essential that the Patent and Trademark
Office operate efficiently and fairly, and I commend the 7,000-
plus dedicated civil servants at USPTO for all of their hard
work and valuable contribution. And that is why this Committee
acted unanimously last week to pass legislation H.R. 1561 to
stop the diversion of patent fees, which we think is very
important.
I know that Mr. Dudas is committed to make the USPTO run
even more effectively than it has in the past, and I am
confident that Jonathan W. Dudas will continue to serve this
country and the Department of Commerce with distinction, and I
certainly look forward to your speedy confirmation.
Now, before we turn to Mr. Dudas, we will turn to our
Democrat leader on the Committee, Senator Leahy, who I am sure
will have some nice things to say.
STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM THE
STATE OF CONNECTICUT
Senator Leahy. Thank you, Mr. Chairman.
It is good to see you. We have known each other for a
while, not as long as Chairman Hyde and I have known each
other, but I have enjoyed working with you, and I am delighted
to see your family here. You probably would sit here and think,
with children this young, now, are they going to be able to
survive all the way through a hearing, but for those of us who
have had young children, and now grandchildren, we do not mind
how much they act up. I do not want them to hear that.
[Laughter.]
Senator Leahy. The Patent and Trademark Office plays such
an enormous role in the development of new technologies. It is
the sort of thing that allows the United States to compete in
what is very much an international market. It has to make sure
that innovators can profit from what they have done, but it has
to make sure those new ideas get deployed to the people who
might use them.
I think, to do that--it is entirely different than the
days, I read an article recently that talked about the old days
of the models of every new patent coming in. Well, that was
easy, when you would get maybe three, five, six a month, at
best. Now, of course, it is different, and you have got to
modernize the process and the whole way it is done down at the
office. The 21st Century Strategic Plan is a step forward, but
of course now you have to implement it. And in that regard, we
can either congratulate you or offer you condolences for your
new position, but you are a graduate of the University of
Illinois, the University of Chicago, practiced law in Chicago
before you went with Congressman Hyde. You worked with him
there with the Speaker. The last three and a half months, you
have been acting director, and it is not as though you get
confirmed, walk in the door and say, ``What is this place?''
You are going to have to implement the 21st Century Strategic
Plan. I truly believe you can.
We are in a situation today, as you know, American
corporations are facing retaliatory sanctions. The World Trade
Organization says we are discriminating against Cuba and Cuban
trademarks through Section 211. There are a couple different
bills, one by Senator Baucus, one by Senator Domenici, I
believe it is, to address this. I would be anxious to hear what
you have to say about that. You are going to be our leading
voice on intellectual property policy and practice. Obviously,
you have go to coordinate closely with our own Register of
Copyrights with the U.S. Trade Representative, the Department
of Justice and many others.
You have an exciting time ahead of you, but it is more than
just getting an appointment. A great deal of what we do in this
country and a great deal of our ability to create jobs, to keep
the innovative edge America has always been proud of, it is
going to rest on your shoulders.
Any other statement, I will put in the record, Mr.
Chairman.
[The prepared statement of Senator Leahy appears as a
submission for the record.]
Chairman Hatch. Well, thank you so much.
Mr. Dudas, if you would stand and raise your right hand, do
you swear to tell the truth on the testimony you are about to
give, the truth, the whole truth and nothing but the truth so
help you God?
Mr. Dudas. I do.
Chairman Hatch. Thank you.
Mr. Dudas, do you have any statement you would care to
make? We would like you to introduce your family and your
friends who are here with you.
STATEMENT OF JONATHAN W. DUDAS, NOMINEE TO BE UNDER SECRETARY
OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR OF THE
UNITED STATES PATENT AND TRADEMARK OFFICE
Mr. Dudas. Absolutely. Thank you. Thank you, Mr. Chairman,
Senator Leahy.
Just a brief statement. For me, today is a day filled with
blessings and responsibilities, as you mentioned, Senator
Leahy. It is a great honor and privilege to be here today as
President Bush's nominee as Under Secretary of Commerce for
Intellectual Property and Director of the United States Patent
and Trademark Office. I am very grateful to the President for
nominating me to this important post and to Secretary Evans for
his recommendation and support.
Thank you, Chairman Hatch and Senator Leahy. I am honored
by your scheduling of this hearing. I am especially thankful
considering the substantial workload before this Committee and
the demands placed on it.
I am grateful to Chairman Hyde for his introduction. He is
a man of great honor and a model of public service. he has my
never-ending gratitude for his guidance and support.
Finally, Mr. Chairman, I am honored today to have the
support of many colleagues and friends here today, bosses,
friends and mentors during my time in Washington. And most
importantly I recognize the support today of my family, my wife
Nicole, and our four children, Joshua, Caroline, Sarah and
Caleb. Caleb did act up a little bit too much, so he left the
room. He had responsibility for crying during the tough
questions, but I think Sarah can step up for that.
[Laughter.]
Senator Leahy. No pinching her.
[Laughter.]
Mr. Dudas. In addition, my parents, Ron and Jan Dudas, are
here from Phoenix, Arizona.
Mr. Chairman, Senator Leahy, I cannot overstate the
importance of intellectual property in today's global economy.
For over 200 years, intellectual property has fueled our
Nation's economic growth and will continue to do so. The United
States needs to do all that it can at both the domestic and
international levels to promote and protect intellectual
property domestically and abroad so it will continue to drive
economic growth.
The Under Secretary for Intellectual Property plays a
significant role in this effort. Not only does the Under
Secretary oversee the issuance of patents and trademarks, but
he or she also advises the President, through the Secretary of
Commerce and other Federal agencies, on all national and
international intellectual property issues.
I came to the office a little over 2 years ago, then as
Deputy Under Secretary, at an important time. Then-Under
Secretary Rogan and I quickly realized that the USPTO was an
agency that was on an impending crisis. A decade of rapid
growth in its workload had overwhelmed the Agency and without
decisive action, it would continue along a steady decline.
On a relatively short basis, we performed a comprehensive
review and developed a long-term strategic plan to stop the
decline and stabilize the Agency. I am pleased to say that the
legislation associated with that plan was recently approved by
the House of Representatives by a vote of 379 to 28 and, as you
mentioned, Mr. Chairman, unanimously approved by this Committee
last week.
This strategic plan and the resources to fund it will
improve the quality of patents granted and the quality of
trademarks registered and minimize their processing times.
USPTO customers deserve a quality product delivered in the
shortest possible time that will withstand legal challenge.
On the international side, we need to continue to reach out
to our foreign trading partners to encourage and, in some
cases, to demand support for strong intellectual property laws
and enforcement systems. U.S. industries suffer enormous
financial losses overseas through piracy and counterfeiting due
to an effective enforcement.
So, Mr. Chairman and Senator Leahy, the United States does
have the best intellectual property system in the world. I am
grateful for the opportunity I have had thus far to improve our
system as Acting Under Secretary and Deputy Under Secretary to
work to improve our system and, if confirmed, I look forward to
continuing to work with you to enhance our intellectual
property system in the hopes of making it even better.
Thank you for holding this hearing and for your
consideration of my nomination, and I am certainly pleased to
answer any questions you all have.
[The biographical information of Mr. Dudas follows.]
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Chairman Hatch. Thank you so much. We ar grateful to have
you here, and we are grateful you are willing to serve in this
very important position.
Now, the position for which you have been nominated is an
extremely important one to the United State and of particular
importance to Senator Leahy and me. We both work very closely
together on virtually all intellectual property issues. As you
know the Patent and Trademark Office is currently facing the
heaviest workload and the longest pendency rate in its 200-year
history. It is a time of great challenge, but also opportunity,
for the PTO and American Congress. I, personally, feel very
confident in your abilities, and I think you will make an
excellent director.
Just to highlight some of these experiences, you served as
counsel to the House Judiciary Subcommittee on Courts and
Intellectual Property and then spent 4 years as chief of staff
and chief counsel to that Committee. You then went to the work
for the Speaker of the House before you became deputy director
at PTO, and for the past 4 months, you stepped in as Acting
Under Secretary and Director. So I want to commend you for your
dedication and service to the Agency.
Now, how do you intend to bring your legislative and
administrative experiences to bear as Director of PTO? And do
you have any general comments regarding your qualifications and
perhaps your experience that you would like to share with us?
Mr. Dudas. Absolutely. Thank you for the question.
I believe right now is a time that is critically important
for the Patent and Trademark Office to understand all of
Washington, to understand the administration, to understand
Congress, and certainly for the intellectual property community
to understand that as well. So the experience I have had thus
far, in the 2 years I have been at the Patent and Trademark
Office, what I found most important was to make certain that I
help act with then-Under Secretary Rogan to translate what the
intellectual property world is saying to Washington and
translate what happens in Washington back to the intellectual
property world. In that regard, coming to the Judiciary
Committee in the Senate, the Judiciary Committees in the House
and even the Appropriations Committees has certainly been very
valuable.
What I developed over the past 2 years, what I feel I have
developed is a better understanding of the office and its
processes, what exactly we need to do to implement the
strategic plan. We live in a world right now in the Patent and
Trademark Office, we live in really two worlds. One world is
one where we presume and hope to have the funding that is
necessary to run the office and implement the strategic plan in
full, but what we have been living in day-to-day now is an
office that is in a decline because of the lack of resources.
So I think the most important thing I can bring to bear
right now to the Patent and Trademark Office is to help pass
the fee bill, to help make certain again that Washington
understands the needs of the intellectual property community
and work closely with all of you. I have found the experiences
that have matched well for what I think the Patent and
Trademark Office needs. But you put it very well, as did
Senator Leahy. There are a great number of opportunities ahead,
but there are also a great number of challenges.
Chairman Hatch. Thank you. I have tremendous respect for
your predecessor, for his character and vision, as he served
there. But in the testimony you gave before the House of
Representatives Subcommittee on Commerce, Justice, State and
the Judiciary Committee on Appropriations in March of this
year, you stated that without fundamental changes, the way the
PTO operates, average pendency will likely double in certain
areas by 2008, and the backlog of applications awaiting a first
review by an examiner will grow from the current level of
approximately 475,000 to over a million.
Now, tell us how you plan to advance the various goals of
the 21st Century Strategic Plan set out by the former Under
Secretary Rogan in order to avert this escalation.
Mr. Dudas. Absolutely. Thank you.
The most critical element, the first thing that Under
Secretary Rogan and I did was take a comprehensive look at the
office from an administrative perspective. At that time, we
talked to members of the Senate Judiciary Committee,
Appropriations Committee, House Judiciary Committees and
Appropriations Committees and folks in the administration, as
well as the private sector.
What we came to realize, that the first and most important
goal is to make sure that quality is the primary goal at the
Patent and Trademark Office.
We also found, as you noted, that the office is one that,
under the current funding levels and under current hiring
levels that we have now is one where pendency will grow,
timeliness will become almost unbearable in some technologies.
As you mentioned, over the next 5 years, without the funding
and the strategic plan in place, pendency will more than double
in some areas. Some areas today, in some of the cutting-edge
technologies, are already double our average pendency. So the
question that some may ask in the private sector is at what
point will it become meaningless or at what point does it
become questionable whether or not you even want to file for
patent protection.
H.R. 1561, and the administration's solution, was to fully
fund the office and involved a great deal of hiring and quality
initiatives. So, first and foremost, we have already put in
place a number of quality initiatives that we cannot afford
under the current resources, and there will be more quality
programs in place.
How we hire people has changed, how we promote people has
changed. There is more testing. There is more training. There
is a second pair of eyes program that we have in place where we
have examiners looking at examinations as they go out the door
a second time. The number of ways we test through the process
has more than tripled. So quality is going to come through a
number of programs, as well as testing.
Pendency, as you talked about, the most important element
is passing H.R. 1561 and implementing 1561, which involves
hiring and gaining other efficiencies as well. The most
important thing I can say about that is, at the end of 5 years,
the pendency will be stabilized and going downward. It will be
at approximately 28.8 months, under current figures, 28.9
months, excuse me, but it will be going downward. The pendency
will be stabilized.
In the absence of the fee bill and the strategic plan, it
will be at 39 months and growing, and the evidence of that is
the backlog, as you mentioned. Rather than controlling the
backlog at the end of 5 years, we will have a backlog that
could well exceed one million patents. So, to us in the office,
it is very clear to the Commissioners, it is clear to all of
our professional staff, what we need to do is get the
appropriate resources and implement the plan.
Chairman Hatch. Thank you. You testified before the
Committee on the theft and counterfeiting of intellectual
property. I think Senator Specter, I was grateful to him for
conducting that particular hearing. But the piracy of global
trademark counterfeiting has been estimated at $500 billion--
with a ``b''--billion dollars each year. So could you give us
your general thoughts on what both Congress and the PTO should
be doing to prevent the alarming costs of global piracy.
Mr. Dudas. Absolutely. Thank you.
Certainly, at the USPTO, we help coordinate intellectual
property policy and enforcement programs. Throughout the world,
we are seeing the result of TRIPS, we are seeing the result of
WTO, and that is stronger, new intellectual property systems in
other nations, but as nations are growing, the piracy and
counterfeiting is reaching incredible levels.
What we need to be doing is coordinating within the U.S.
Government, making certain that we are addressing these issues,
particularly at the USPTO. We have relationships with
developing nations and developed nations as well with their
Patent and Trademark Offices. We conduct training for Supreme
Court justices, we conduct training for prosecutors that are
from other nations, here in the United States. We travel to
other nations and conduct training programs there as well.
Much of what we need to do is in coordination with USTR and
throughout the Department of Commerce. I can point to China as
an example of growing theft, and piracy and counterfeiting.
There recently was concluded, with the United States Trade
Representative and Secretary of Commerce Don Evans, a Joint
Commission on Commerce and Trade meeting, where we had Vice-
Premier Wu Yi here. The Chinese have promised, on a number of
fronts, how they can improve their system and stop piracy and
counterfeiting. What is most important now, from an
administration perspective, and Secretary Evans has led the
fight on this, is to make sure that we measure results, that we
measure exactly how that is being done and how it is carried
out.
I think what the Judiciary Committee in the Senate is
doing, watching the issue, there is legislation in place,
continuing to have the U.S. be a model for the rest of the
world, as far as piracy and counterfeiting, I think is one of
the best things we can do when we travel internationally. When
we had problems here in the United States with theft of
intellectual property that were not based on financial thefts,
this Committee passed the NET Act, which was a model for the
world for intellectual property counterfeiting or opposition to
that.
So there is a great deal that we can do as USPTO within the
administration, and there is a great deal still to be done in
Congress. I think what is going on right now is exactly right,
which is the monitor.
Chairman Hatch. Thank you. I will submit any other
questions I have in writing.
Let us turn to Senator Leahy.
Senator Leahy. Thank you, Mr. Chairman.
I am just curious. I mentioned that dispute over the
treatment of Cuban trademarks in this country. We have one
possible solution that Senator Baucus has put forward in a
larger bill, Senator Domenici in a stand-alone bill. USTR said
they both would allow the U.S. to come into compliance with the
recent World Trade Organization opinion against our current
policy.
What do you believe is the best way, aside from any
question of being Cuba or anywhere else, just sound trademark
policy, what is the best way for us to deal with this issue,
thinking that 10 years from now some successor of yours may be
looking at it and see what you did?
Mr. Dudas. Well, I, specifically, with the issue of Section
211, the Trade Representative has the lead on trade matters. I
can speak briefly on what I understand of that, and then I can
get to the heart of your question.
My understanding is that the WTO appellate body decision
was itself quite narrow and that, while complete repeal of
Section 211, which is I think one of the options on the table,
could be one response to the WTO's decision, that repeal is
neither mandated nor suggested by the decision of the WTO
appellate body. I, certainly, on the specifics of Section 211,
can consult with the U.S. Trade Representative and give you
more of an answer.
From a strictly trademark perspective, I can tell you, and
there have been cases before the office, and I can only speak
in general terms because, in my current position, I operate as
a statutory member of the Trademark Trial and Appeal Board, but
in general thoughts, what we do at the Patent and Trademark
Office, through our Appeal Boards, is really responsibility to
apply the law as it has been applied through the court systems.
So we look at it strictly on a case-by-case basis with each law
as it comes through.
Senator Leahy. Well, let me go to that a little bit because
you are on that Appeals Board. Now, according to papers
released by Governor Bush in Florida, he said you met with him,
you were receptive, and responsive to his concerns on this.
This has some political problems for him. You were responsive.
What arguments did he make, and what did you say that was
so responsive?
Mr. Dudas. The issue I think you are talking about is a
particular dispute between Bacardi and Cuba Export. That is an
issue we have gotten letters from Governors, as you mentioned,
and from Republican members of Congress, Democratic Senators,
and others, all urging the Trademark Trial and Appeal Board to
cancel the mark.
Senator Leahy. What was it that you told the Governor that
gave him such comfort?
Mr. Dudas. I don't know that we gave comfort. We gave him
the same response that we have given to Members and Senators,
which was basically a procedural update. At that time, I was
not a statutory member of the Trademark Trial and Appeal Board.
So, when they requested the meeting, I took the meeting. What
we sent along, and I am happy to provide copies of the letter,
it was really a procedural update of what has gone on. In fact,
I think what we had said was that this is pending before our
Trademark Trial and Appeal Board, and there is not a whole lot
to comment on that beyond that.
It is a similar response we gave again, even in the
previous administration when these issues came up.
Senator Leahy. If I could have a copy of that letter, I
would appreciate it.
Mr. Dudas. Absolutely.
Senator Leahy. Until a very short while ago, anyway, you
had on the PTO website, you said, while you worked in the
House, you guided the enactment of the Digital Millennium
Copyright Act, the American Investors Protection Act, the
Trademark Counterfeiting Consumer Act, and you point out that
where you worked in the House, that is the birthplace of all
Federal intellectual property statutory law.
They do not need us any more, Orrin. I actually thought
some of those came from over here.
[Laughter.]
Senator Leahy. But I would just note, for whatever it is
worth, as recently as last week, this Committee reported out
three important intellectual property bills, the PIRATE Act,
the CREATE Act, the ART Act. We also reported the PTO Fee
Modernization Act, which would increase the fee or Agency
charges and then guarantee that those fees will either go to
the PTO or they go right back to the people that paid them--
they cannot go to other Federal programs--and called on PTO to
initiate a pilot program to test whether private contractors
could do some of the searches necessary on patent applications
now.
Let me ask you a couple of things. The patent pendency
times seem to get longer and longer, and I realize you are
getting more and more things that are a lot more complex than
some simple mechanical device. I would think that a great deal
of the increased fee revenue from this ought to go to hiring
and training patent examiners. You cannot hire them on Monday
and have them working on Tuesday. It takes some work. But your
budget does not do that. As I read it, as little of 10 percent
of the revenue increases are going to new hires. Where will the
rest of it go?
Mr. Dudas. Most of the new money under the H.R. 1561, as it
exists now and came through the Senate Judiciary Committee,
will go into hiring, I think the majority. Much of it will also
go into electronic processing.
Senator Leahy. But not to examiners.
Mr. Dudas. No, it will go to hiring examiners. In fact, the
office, under that plan, intends to hire 900 additional
examiners in the first year, which would be a record, both in
terms of raw numbers and also a record in terms of
percentagewise. Twenty-five percent of new--now, that doesn't
include attrition.
But a fair amount will also go to supporting our electronic
processing. As you may know, as we move into the new building,
we are not going in with new files, we are going in moving
electronically. The Office and Trademarks now has over 60-
percent electronic filing and electronic processing. So much of
what we are doing is updating the systems and preparing our
systems for an environment that ultimately will save a great
deal of money, but it requires infrastructure and information
costs today.
Senator Leahy. Let me ask some follow-up questions on the
breakdown of the budget.
In your pilot program to test outsourcing of certain PTO
jobs, that is going to be evaluated by the Patent Public
Advisory Committee. Could not a better, more independent one be
done by GAO?
Mr. Dudas. GAO, in my understanding, is coming down to look
at the office under an inquiry from the House Appropriations
and Judiciary Committee. Certainly, we welcome oversight from
GAO and others as well. The Patent Public Advisory Committee is
made up of a variety of folks who are temporary Government
workers, but they are represented in the union, folks from the
private sector, both in industry and legal arenas, are
represented there. So I think either/or, as far as being able
to give an outside view and give ideas to the office are both
valuable.
Senator Leahy. I understand that WIPO is going to look at a
possible treaty regarding the rights of broadcasters since I
think 1998. The next WIPO session on that is scheduled for the
first week in June. Do you have a position with regard to these
negotiations?
Mr. Dudas. Yes. The United States' position has been one of
a great deal of support for going forward with the
Broadcasters' Treaty. We spent a great deal of time at the
Patent and Trademark Office working with both the content
owners, as well as the broadcasters, to try to come up with a
unified position for the United States. So we go in with a
position of wanting to get a treaty, but certainly any time, in
doing treaty negotiations, being cautious of what is being put
on the table.
Senator Leahy. I can imagine.
Mr. Chairman, I just wonder if we might have Mr. Dudas
introduce his family who is here because some day when you go
in the dusty archives of the Dudas Memorial Library--
[Laughter.]
Senator Leahy. --your kids might be glad to see, and I just
realized I think your wife just left, and I apologize for that,
but they might like the idea of being able to read in there,
you know, that day that we had to sit there forever, and ever,
and ever with daddy, we still got our names in there. Besides
which, if they are missing school, they can show the teacher
where they were.
Mr. Dudas. Well, thank you very much.
Let me introduce Joshua Matthew Dudas. Can you stand up,
please. Thank you. Caroline Nicole Dudas, my father Ronald
Edward Dudas. The other half of my family, Nicole Dudas, Sarah
Dudas and Caleb Dudas are all gone.
Chairman Hatch. We understand.
[Laughter.]
Senator Leahy. No, we understand.
Mr. Dudas. Thank you.
Senator Leahy. I just wanted to make sure, and you will get
a copy of this to make sure that the names are all spelled
right. But they have to be awfully proud of you in being here,
and I just wanted to make sure somewhere in the record they had
their names to show they were here.
Mr. Dudas. Thank you very much. That was kind.
Chairman Hatch. Well, thank you, Senator.
Senator Leahy. We have the rest of the family or part of
the rest of the family coming back in here, too.
Chairman Hatch. There is your wife.
Mr. Dudas. There is my wife, Nicole Dudas.
Chairman Hatch. Well, we are glad to have you here, and
your mother as well.
Mr. Dudas. I am sorry--my mother, Janice Dudas.
Chairman Hatch. That is all right. We are delighted to have
you. This is a very, very important position. Both of us know
that, and both of us work very closely with the office that you
are about to take over. Frankly, we look forward to working
with you, and I think we would like to have even more
suggestions from you folks there as to how we might be able to
do a better job up here because that is one thing that I think
we find that we work on very well, in a bipartisan way, and I
think we can get a lot done between now and the end of the
year, if we can do that.
So I intend to try and get you confirmed as soon as we
possibly can, and hopefully that will be real soon.
Mr. Dudas. Thanks very much. I look forward to continuing
to work with you. Certainly, in my capacity as acting, I know
there are challenges, and I know you will provide vigorous
oversight. I think you can tell by the lack of crying that you
were kind to me today, so I appreciate that.
[Laughter.]
Chairman Hatch. That is great. Well, with that, we
compliment you for this job and look forward to your service.
We will keep the record open for one week for additional
statements and questions. If the questions come in, get your
answers back as soon as you can, and we will try and get you up
before the Committee and then up on the floor as soon as we
possibly can.
Mr. Dudas. I appreciate that. Thank you.
Chairman Hatch. Thanks, Jon. Good to have you all here, and
thanks to all of you for coming and supporting.
Mr. Dudas. Thank you.
Chairman Hatch. With that, we will recess until further
notice.
[Whereupon, at 3:14 p.m., the Committee was adjourned.]
[Questions and answers and submissions for the record
follow.]
[Additional material is being retained in the Committee
files.]
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