Hatch headlines Lincoln Lab’s Reboot Congress discussion

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WASHINGTON, D.C. — Sen. Orrin Hatch, chairman of the Senate Republican High-Tech Task Force, headlined the Lincoln Labs’ Reboot Congress Thursday, addressing tech priorities including patent reform, data privacy, high-skilled immigration reform, and Internet Governance.

A few excerpts are below:

On Crafting Effective Patent Reform Legislation

We must not support a bill that fails to provide an effective deterrent against patent trolls—at all stages of litigation.

Let me be clear: I will oppose any bill that fails to prevent patent trolls from litigating-and-dashing. Put another way, I believe any viable legislation must ensure that those who successfully defend against abusive patent litigation and are awarded fees will actually get paid.

Protecting the Privacy of American Data Stored Abroad

While I agree, in principle, with the ECPA reform bills recently introduced in the House and Senate, they both fall short since neither establishes a framework for how the U.S. government can access data stored abroad. Without an appropriate legal framework, the current state of affairs regarding extraterritorial use of warrants puts the privacy of American citizens at risk for intrusion by foreign governments. Thus, as Congress works to reform our domestic privacy laws, we must also clarify and modernize the legal framework for government access to digital data stored around the world.  These two issues are inextricably linked.

That is why later today I intend to reintroduce the Law Enforcement Access to Data Stored Abroad – or LEADS Act – to promote international comity and law enforcement cooperation.

High-Skilled Immigration Reform

Demand for positions requiring graduate level STEM training is exploding, far outpacing the availability of American students with the requisite  education.  A 2014 GAO study found that in the period between the 2002-2003 academic year and the 2011-2012 academic year, 23 percent of graduate degrees earned by foreign students were in the core STEM fields of life and physical sciences, engineering, computer science, and math, compared to only 2 percent of graduate degrees earned by U.S. citizens and green card holders.  For degrees earned in 2013 (the most recent year for which the Department of Education reports data), 38.6 percent of Masters-level STEM degrees from U.S. universities, and fully 43.7 percent Doctorate-level STEM degrees from U.S. universities, were earned by foreign students.

Last month, I introduced the Immigration Innovation – or I-Squared – Act with Senators Amy Klobuchar, Marco Rubio, Chris Coons, Jeff Flake, and Richard Blumenthal. This bipartisan bill addresses the immediate, short-term need to provide American employers with greater access to high-skilled workers by increasing the cap on H-1B visas from 65,000 to 115,000, with the possibility of the cap rising as high as 195,000 depending on economic conditions. The I-Squared Act also removes the limit on H-1B visas for advanced STEM degree holders, recaptures unused green cards, and allows spouses of H-1B visa holders to work.

Internet Governance

Last week Senator Blunt and I, along with other interested senators, introduced a Senate resolution designating February 8th through 14th as Internet Governance Awareness Week. The Senate unanimously passed our Resolution, which seeks: to increase public awareness about the March 14, 2014, announcement by the National Telecommunications and Information Administration declaring its intention to transition its stewardship role to the global, multi-stakeholder community; to encourage public education about the implications of the proposed transition; and to call the attention of the participants at ICANN’s global meeting in Singapore to the importance of coupling any proposal to transition the stewardship of key Internet functions with accountability and governance-oriented reforms of ICANN.

In my view, the IANA transition is a critically important issue this year, and I remain committed to ensuring that policymakers remain informed and engaged regarding the core functions and governance of the Internet. There’s simply too much at stake to sit idly by.

The full speech, as prepared for delivery, is below:

I appreciate the opportunity to be with you this morning. I particularly want to thank Lincoln Labs and the U.S. Chamber of Commerce for organizing this important event.

I couldn’t agree more with the theme of this event—it’s time to reboot Congress.

It’s time for a Republican-controlled Congress to unleash the pent-up energy of pro-innovation policies that will usher in a period of unprecedented job creation and technological advances.

America has made extraordinary strides in innovation.  For decades, we have been the world’s leader in developing new technologies and advancing the Internet age.  But we are not the only nation on the hunt.  Across the globe, and particularly in China and other parts of Asia, our international competitors are working furiously to catch up.  If the United States is to enjoy continued success in the technology arena, policymakers must ensure we have a legal and regulatory landscape that will enable our innovators to thrive.

That is why, as chairman of the Senate Republican High-Tech Task Force, I have developed an innovation policy agenda for the 114th Congress. During the time we have together, I would like to speak about some of the initiatives I believe are critical to ensuring the continued success of our high-tech economy.

The first priority is protecting legitimate intellectual property rights from abusive patent litigation. Patent trolls—which are often shell companies that do not make or sell anything—bring thousands of frivolous patent infringement lawsuits each year in attempts to extort settlements from conscientious, hard-working technology innovators. These trolls, and their abusive lawsuits, are crippling our economy at a cost of $60 billion each year.

Last Congress, we began the legislative process to fix this mess, and I am optimistic that we will pass patent troll legislation this year. It’s about time. I’ve been talking about the problem of patent trolls since 2005, when Senator Leahy and I first began work on what is now the America Invents Act.

My current discussions with stakeholders—as well as my ongoing negotiations with other Members—leave me optimistic that we can work together to produce effective legislation.  There is much common ground.

We all know that current law fails to combat patent trolls, which is why—only three years since the America Invents Act was enacted—we are talking about making additional reforms.  There is likewise broad agreement that any serious solution must include mandatory fee shifting, heightened pleading and discovery standards, demand letter reforms, and a mechanism to enable fee recovery against insolvent shell companies.

Passing any legislation is a major undertaking, and the added complexities inherent in patent law make passing patent legislation especially challenging. While we are all eager to enact patent litigation reforms, we will probably only have one chance to do so for a long while. This means that whatever we do, it must work—and we must not support a bill that fails to provide an effective deterrent against patent trolls—at all stages of litigation.

Let me be clear: I will oppose any bill that fails to prevent patent trolls from litigating-and-dashing. Put another way, I believe any viable legislation must ensure that those who successfully defend against abusive patent litigation and are awarded fees will actually get paid.

Even when a patent troll structured as a shell company has no assets, there are other parties with an interest in the litigation. These parties are often intentionally beyond the jurisdiction of the courts. They stand to benefit if the plaintiff shell company forces a settlement, and are protected from any liability if they lose.

It’s a win-win situation for these parties, and a lose-lose situation for America’s innovators. Since we cannot force parties outside a court’s jurisdiction to join in a case, we must incentivize those interested parties to do the right thing and pay court-ordered fee awards.

In my view, even the strongest fee-shifting provision can be rendered useless if it does not actually require the losing party to pay court-awarded fees. I welcome every good idea that will help us strike the right balance on this and other related provisions, so please send me your thoughts.

Now that the House of Representatives has introduced the Innovation Act, I anticipate the Senate will come up with its own bill in the near future. I am already hard at work to make sure we produce an effective bill, and I am confident that both chambers can work together to solve these complex issues and send the President a bill he can sign into law for the good of American innovation.

There is also strong bipartisan, bicameral support for updating our privacy laws. Policymakers must act so that our nation’s privacy laws correspond to present realities and keep up with technological advances.

Most immediately, we need to update the Electronic Communications Privacy Act—or ECPA—to require a warrant for all e-mail content within the United States and to safeguard data stored abroad from improper government access.

Enacted in 1986, ECPA prohibits communications service providers from intercepting or disclosing e-mail, telephone conversations, or data stored electronically, unless such disclosure is authorized. Virtually everyone agrees that Americans should enjoy the same privacy protections in their online communications that they do in their offline communications. But Congress has not adequately updated the law since its enactment, and technological developments have resulted in disparate treatment between online and offline communications.

While I agree in principle with the ECPA reform bills recently introduced in the House and Senate, neither establishes a framework for how the U.S. government can access data stored abroad. Without an appropriate legal framework, the current state of affairs regarding extraterritorial use of warrants puts the privacy of American citizens at risk for intrusion by foreign governments. Thus, as Congress works to reform our domestic privacy laws, we must also clarify and modernize the legal framework for government access to digital data stored around the world.  These two issues are inextricably linked.

If the federal officials can obtain emails stored outside the United States simply by serving a warrant on a provider subject to U.S. process, nothing stops governments in other countries—including China and Russia—from seeking e-mails of Americans stored in the U.S. from providers subject to Chinese and Russian process. This presents unique challenges for a number of industries, which increasingly face a conflict between American law and the laws of other countries where electronic data is stored.

That is why I plan to reintroduce the Law Enforcement Access to Data Stored Abroad—or LEADS Act—to promote international comity and law enforcement cooperation.

The LEADS Act promotes U.S. business interests by allowing American companies to compete on a level playing field. The LEADS Act would clarify ECPA by stating that the U.S. government cannot compel the disclosure of data from U.S. providers stored abroad if accessing that data would violate the laws of the country where it is stored or if the data is not associated with a U.S. person—that is, a citizen or lawful permanent resident of the United States, or a company incorporated in the United States. Without this legislative change, a German tech company could claim that German citizens should not use U.S. Internet services because those services are more vulnerable to U.S. law enforcement collection efforts.

I believe the LEADS Act represents the best approach to solving this problem, but I am open to suggestions for improving its effectiveness. In the end, we must strengthen privacy in the digital age and promote trust in U.S. technologies worldwide by safeguarding data stored abroad, while still enabling law enforcement to fulfill its important public safety mission.

Another element critical to America’s continued innovation success is enhancing our competitive workforce.

We can do this by streamlining the hiring process for high-skilled individuals entering the United States to work in science, technology, engineering, and mathematics-related fields.

Our high-skilled worker shortage has become a crisis. Last April, for the second year in a row, the government reached its current H-1B quota just five days after it began accepting applications. Employers submitted 172,500 petitions for just 85,000 available visas. American companies were thus unable to hire nearly 90,000 high-skilled workers they need to help grow their businesses here at home, develop innovative technologies, and compete with international competitors.

As a result, some of our nation’s top technology markets—such as Silicon Valley, Seattle, Austin, New York, and Salt Lake City—are in desperate need of qualified STEM workers. It is important that we not only recognize that this shortage of high-skilled workers exists, but that we also understand why it exists.

Demand for positions requiring graduate level STEM training is exploding, far outpacing the availability of American students with the requisite education.  A 2014 GAO study found that in the period between the 2002-2003 academic year and the 2011-2012 academic year, 23 percent of graduate degrees earned by foreign students were in the core STEM fields of life and physical sciences, engineering, computer science, and math, compared to only 2 percent of graduate degrees earned by U.S. citizens and green card holders.  For degrees earned in 2013—the most recent year for which the Department of Education reports data—38.6 percent of masters-level STEM degrees from U.S. universities and fully 43.7 percent of doctorate-level STEM degrees from U.S. universities were earned by foreign students.

If American companies are unable to tap into this pool of STEM graduates, we should not be surprised if they move operations to other countries where they have greater access to individuals trained in STEM fields.  Continued inaction causes us to miss out on important opportunities, particularly since, as the American Enterprise Institute confirms, 100 foreign-born workers with STEM degrees create an average of 262 additional jobs for U.S.-born workers. And let me tell you, these countries would love to have their American-educated Ph.Ds and other highly educated individuals return home and boost their economies—not only with their acquired skills, but also by creating new jobs.

Last month, I introduced the Immigration Innovation—or I-Squared—Act with Senators Amy Klobuchar, Marco Rubio, Chris Coons, Jeff Flake, and Richard Blumenthal. This bipartisan bill addresses the immediate need to provide American employers with greater access to high-skilled workers by increasing the cap on H-1B visas from 65,000 to 115,000, with the possibility of the cap rising as high as 195,000, depending on economic conditions. The I-Squared Act also removes the limit on H-1B visas for advanced STEM degree holders, recaptures unused green cards, and allows spouses of H-1B visa holders to work.

The I-Squared Act is a common-sense approach to ensuring that those who have come here to be educated in our American universities are able to stay here with their families and contribute to our economy and our society. This bill is good for workers, good for businesses, and good for our economy.

Let me conclude by talking briefly about the importance of fostering a modern, competitive, and open Internet—free from the control of authoritarian governments.

The Internet has transformed our lives in ways few could have foreseen even just a few years ago. Here in Washington and around the world, a lively discussion is underway about how the Internet will be governed going forward. The crux of the debate centers on whether the Commerce Department will hand over its oversight role of the Internet Assigned Numbers Authority to the global multi-stakeholder community.

This week in Singapore, the Internet Corporation for Assigned Names and Numbers—or ICANN—is holding its 52nd public hearing to discuss the proposed transition.

It is crucial that Americans understand what is at stake, especially considering the political and economic consequences for getting this issue wrong.

That is why last week Senator Blunt and I, along with other interested senators, introduced a Senate resolution designating February 8th through 14th as Internet Governance Awareness Week. The Senate unanimously passed our Resolution, which seeks: to increase public awareness about the March 14, 2014, announcement by the National Telecommunications and Information Administration declaring its intention to transition its stewardship role to the global, multi-stakeholder community; to encourage public education about the implications of the proposed transition; and to call the attention of the participants at ICANN’s global meeting in Singapore to the importance of coupling any proposal to transition the stewardship of key Internet functions with accountability and governance-oriented reforms of ICANN.

In my view, the IANA transition is a critically important issue this year, and I remain committed to ensuring that policymakers remain informed and engaged regarding the core functions and governance of the Internet. There’s simply too much at stake to sit idly by.

Thank you, again, for having me this morning. As you can see, there is a lot we can—and must—accomplish in the 114th Congress.  I intend to do everything in my power to enact pro-technology, pro-innovation policies that will ensure the continued success of our high-tech economy.

Submitted by the Offices of Sen. Orrin Hatch

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