U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

65–075 PDF 2011

DRIVING AMERICAN INNOVATION: CREATING 

JOBS AND BOOSTING OUR ECONOMY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

INTELLECTUAL PROPERTY, 

COMPETITION, AND THE INTERNET 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

MARCH 9, 2011 

Serial No. 112–19 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 

(II) 

COMMITTEE ON THE JUDICIARY 

LAMAR SMITH, Texas, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

DANIEL E. LUNGREN, California 

STEVE CHABOT, Ohio 

DARRELL E. ISSA, California 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM REED, New York 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

DENNIS ROSS, Florida 

SANDY ADAMS, Florida 

BEN QUAYLE, Arizona 

JOHN CONYERS, JR., Michigan 

HOWARD L. BERMAN, California 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO PIERLUISI, Puerto Rico 

MIKE QUIGLEY, Illinois 

JUDY CHU, California 

TED DEUTCH, Florida 

LINDA T. SA ́ NCHEZ, California 

DEBBIE WASSERMAN SCHULTZ, Florida 

SEAN MCLAUGHLIN, Majority Chief of Staff and General Counsel 

PERRY APELBAUM, Minority Staff Director and Chief Counsel 

SUBCOMMITTEE ON INTELLECTUAL PROPERTY, COMPETITION, AND THE INTERNET

BOB GOODLATTE, Virginia, Chairman 

HOWARD COBLE, North Carolina, Vice-Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

STEVE CHABOT, Ohio 

DARRELL E. ISSA, California 

MIKE PENCE, Indiana 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM REED, New York 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

SANDY ADAMS, Florida 

BEN QUAYLE, Arizona 

MELVIN L. WATT, North Carolina 

JOHN CONYERS, JR., Michigan 

HOWARD L. BERMAN, California 

JUDY CHU, California 

TED DEUTCH, Florida 

LINDA T. SA ́ NCHEZ, California 

DEBBIE WASSERMAN SCHULTZ, Florida 

JERROLD NADLER, New York 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

BLAINE MERRITT, Chief Counsel 

STEPHANIE MOORE, Minority Counsel 

(III) 

C O N T E N T S 

MARCH 9, 2011 

Page 

OPENING STATEMENTS 

The Honorable Bob Goodlatte, a Representative in Congress from the State 

of Virginia, and Chairman, Subcommittee on Intellectual Property, Competition, and the Internet .................................................................................... 1 

The Honorable Melvin L. Watt, a Representative in Congress from the State 

of North Carolina, and Ranking Member, Subcommittee on Intellectual 

Property, Competition, and the Internet ............................................................ 3 

The Honorable John Conyers, Jr., a Representative in Congress from the 

State of Michigan, Ranking Member, Committee on the Judiciary, and 

Member, Subcommittee on Intellectual Property, Competition, and the 

Internet ................................................................................................................. 3 

WITNESSES 

Anthony Atala, M.D., Director, Wake Forest Institute for Regenerative Medicine, W.H. Boyce Professor and Chair, Department of Urology, Wake Forest 

University School of Medicine 

Oral Testimony ..................................................................................................... 6 

Prepared Statement ............................................................................................. 8 

Michael S. Fulkerson, Ph.D., Chief Technology Officer, Rosetta Stone, Inc. 

Oral Testimony ..................................................................................................... 14 

Prepared Statement ............................................................................................. 16 

Scott Smith, Ph.D., Professor and Chair, Department of Mechanical Engineering and Engineering Science, University of North Carolina at Charlotte 

Oral Testimony ..................................................................................................... 25 

Prepared Statement ............................................................................................. 28 

(1) 

DRIVING AMERICAN INNOVATION: CREATING 

JOBS AND BOOSTING OUR ECONOMY 

WEDNESDAY, MARCH 9, 2011 

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON INTELLECTUAL PROPERTY,

COMPETITION, AND THE INTERNET, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:05 a.m., in room 

2141, Rayburn Office Building, the Honorable Bob Goodlatte 

(Chairman of the Subcommittee) presiding. 

Present: Representatives Goodlatte, Coble, Sensenbrenner, 

Chabot, Poe, Chaffetz, Reed, Marino, Adams, Quayle, Watt, Conyers, Berman, Chu, Deutch, Wasserman Schultz, and Jackson Lee. 

Staff present: (Majority) Vishal Amin, Counsel; Olivia Lee, Clerk; 

and Stephanie Moore, Minority Counsel. 

Mr. GOODLATTE. Good morning. This hearing of the Subcommittee on Intellectual Property, Competition, and the Internet 

will come to order. 

Given the subject of this hearing, I think it is noteworthy that 

we mention that the United States Senate passed the patent reform bill by a vote of 95 to 5 yesterday. So we will look forward 

to introduction of a House bill and action on this side of the Capitol 

very soon. 

This hearing is on driving American innovation, creating jobs, 

and growing the economy. 

I will recognize myself for an opening statement. 

The American experience has been shaped not just by who we 

are but by the things that we have done, and as a Nation, we have 

accomplished a lot. America owes much to the genius of inventors 

like Thomas Edison, the Wright Brothers, Alexander Graham Bell, 

Samuel Morse, and many of the Nation’s Founding Fathers. Indeed, many of our Nation’s Founders were also inventors and authors. Perhaps that is one of the reasons they had the incredible 

foresight to include protections for intellectual property in the U.S. 

Constitution. 

Article I, section 8 of our Constitution lays the framework for our 

Nation’s patent and copyright laws. It grants Congress the power 

to award inventors and creators for limited amounts of time exclusive rights to their inventions and works. The Founders realized 

that this type of incentive was crucial to ensure that America 

would become the world’s leader in innovation and creativity. 

2 

Almost 225 years later, this incentive is still producing dramatic 

results for our Nation. The American innovative spirit continues to 

thrive based on our Nation’s strong intellectual property laws. We 

are seeing entirely new industries and economic sectors springing 

to life from high technology to biotech to aerospace and defense. 

It is true that our Nation is weathering a very difficult storm 

right now, one that has left many people out of work and has 

stalled business development. Our goals need to be squarely focused on reducing unemployment, helping get businesses growing 

again, and moving our economy back into gear. 

I believe American innovation and creativity will lead us out of 

this storm and back to strong economic growth. However, to encourage this result, it is crucial that we have strong and effective 

laws in place that protect inventions and creative works. This will 

send the message that innovators can feel secure in dedicating precious resources to a new product or idea. It will also continue to 

bring predictability to the values of intellectual property which 

will, in turn, encourage banks, venture capitalists, and others to invest in America’s ideas. 

Today’s hearing, ‘‘Driving American Innovation: Creating Jobs 

and Boosting Our Economy,’’ will focus on how our Nation’s intellectual property laws encourage innovation and how innovation 

then creates jobs and spurs our economy. In addition, this hearing 

will show how intellectual property plays such a strong role in our 

daily lives, from advancing education and health care to helping 

keep us safe and improving the lives of people throughout the globe 

through science and technology. This showcase hearing will also be 

an opportunity for us to see and hear about some of the latest and 

exciting inventions and innovations being developed by our witnesses, which I am really looking forward to. 

One is an exciting new idea of science called ‘‘regenerative medicine’’ that seems to verge on science fiction but is indeed a reality. 

Technologies are being developed that can create organs and tissues using 3D printing technology, and in the near future, we may 

even see these technologies help in the regeneration of actual 

limbs. This groundbreaking work is also being done in partnership 

with the U.S. military through the Armed Forces Institute for Regenerative Medicine established under President Bush, known as 

AFIRM. AFIRM is a partnership between universities and the Defense Department that is yielding real-world benefits to both our 

wounded warriors and civilian patients. 

We are also pleased to have Rosetta Stone here, a Virginia-based 

company which started in a seed warehouse in my district whose 

story embodies the American dream. Having gone from a small 

start-up to a global success, they now bring their educational software to individual students and teachers, the military, and our diplomatic corps around the world. 

And finally, we have the Mechanical Engineering Department 

chair from the University of North Carolina at Charlotte. He is an 

inventor and holds several patents and has begun the process of 

commercializing his inventions through his own start-up company. 

By highlighting the real-world implications of IP and innovation 

outside the legislative arena, we will see these issues come to life 

3 

and demonstrate the tangible link between invention and job creation. 

In addition, we will see that inventors and businesses in all 

stages of development rely on strong intellectual property laws to 

succeed. 

I look forward to hearing from our distinguished panel today. 

They represent a variety of perspectives and industries, and I look 

forward to working with my fellow colleagues and the stakeholder 

community as we work to ensure that America’s innovative industries remain strong and vibrant. 

It is now my pleasure to recognize the Ranking Member, the gentleman from North Carolina, Mr. Watt? 

Mr. WATT. Thank you, Mr. Chairman. 

I want to rush to our witnesses to hear what they have to say, 

so I will be brief. 

Over the past few hearings, we have heard about the connection 

between innovation and American job growth. Innovation in businesses with path-breaking technology and high growth potential 

can jump start the economy, make America more competitive, and 

accelerate job creation. 

Public/private partnerships with universities all across the country advance revolutionary research and development efforts. Copyrights, patents, trademarks, industrial design rights, trade secrets, 

and other forms of intellectual property incentivize America’s inventors and facilitate the commercialization of their talent which 

in turn results in substantial benefit to society. 

Greater and deserved recognition of the importance of these intangible assets to our country’s future has increased over the past 

months, with this Administration shining the spotlight on intellectual property-intensive industries and education. This is a unique 

moment in time to leverage this opportunity to sustain and build 

upon America’s role in the global economy. 

Today’s witnesses are examples of the ingenuity and creativity 

that will keep us moving forward. I am happy to say that two of 

them—not only one of them—two of them—are from my congressional district, and I have had the pleasure of working with and 

knowing both of them. Dr. Smith, welcome. Dr. Atala—I have been 

in his laboratory—made an ear. So I can attest to how cutting edge 

what he will be talking about is today. So I am looking forward to 

their testimony and I welcome all of the witnesses. 

I will yield back the balance of my time. I think Mr. Conyers 

wanted to make a statement too. 

Mr. GOODLATTE. I thank the gentleman. 

Yes. It is my pleasure to recognize the Ranking Member of the 

full Committee, the gentleman from Michigan, Mr. Conyers? 

Mr. CONYERS. Thank you, Chairman Bob Goodlatte, Ranking 

Member Mel Watt. 

This is a hearing that I can fully embrace and endorse. I want 

to congratulate the new leaders of the Committee because we all 

start out with the premise and agreement that innovation creates 

jobs and boosts the economy. And I think this gets us off to a very 

good start. The whole idea of regenerative—what Dr. Fulkerson 

will be talking about is extremely important. And I have talked to 

some doctors about this before the hearing. I do not know if you 

4 

know Dr. Samuel Epstein or the Physicians for a National Health 

Plan in Chicago, Dr. Clinton Young. They all are enthusiastic 

about it. 

Now, Rosetta Stone is, of course, by their own admission the 

most popular learning process for languages. What I think may be 

important to the Committee this morning is how do we get immigrants into English fast and easy. Watt and I are studying Spanish 

at a furious rate. You will not know which is our first language 

pretty soon. We will become so articulate. 

And, of course, we welcome Dr. Smith for where we are going. 

Now, here is the challenge that the Committee faces. We have 

an intellectual property office—how long does it take to process? 

Years. So we are going to hear a lot of good things this morning, 

but behind the scenes—I hope it will be brought out in our discussion—we have got to get the office—all this innovation and wonderful inventions are really going to be on a totally different track 

from reality because it takes up to years to get anything through. 

And that is why I applauded the creation of this kind of subcommittee so that we can really focus in on that. 

Then, of course, now we have a lot of the issues from the Senate 

side coming in. We have a lot of work to do. 

Now, there are two things that we can do here, and we will appreciate your guidance. One, we can ratify the Senate bill and say, 

hey, let us move it on. Let us get going. But I am not so sure because locked up in that are some huge issues around ‘‘first to file’’ 

and other things that I think have to be carefully examined. 

Now, all those who have been following the Senate and their actions on the patent bill, fine. This is one Member that has not had 

that opportunity, and I think all these issues converge at the hearing this morning. 

So, Chairman Goodlatte, I congratulate you and the Ranking 

Member again, and I look forward to a great hearing. 

Mr. GOODLATTE. Well, I thank the gentleman, and I can assure 

you that we will work in a bipartisan fashion to construct our own 

patent reform legislation and certainly appreciate what the Senate 

has done, but do our own thing even without the benefit of 3D 

printing technology or some other new invention that would make 

the Congress more efficient in creating legislation. 

It is now my pleasure to introduce our very distinguished panel 

of witnesses. Each of the witnesses’ written statements will be entered into the record in its entirety, and I ask each witness to summarize their testimony in 5 minutes or less. To help you stay within that time, there is a timing light on your table, and when the 

light switches from green to yellow, you will have 1 minute to conclude your testimony. When the light turns red, it signals that the 

witness’ 5 minutes have expired. 

And before I introduce each of you, I would like you to stand and 

be sworn. 

[Witnesses sworn.] 

Mr. GOODLATTE. Thank you very much and be seated. 

Our first witness is Dr. Anthony Atala, Director of the Wake Forest Institute for Regenerative Medicine and the W.H. Boyce Professor and Chair of the Wake Forest University Medical School’s 

Department of Urology. Dr. Atala is an internationally recognized 

5 

expert in tissue engineering and through his research, he has applied for or received over 200 national and international patents 

and helped create several spinoff companies. Dr. Atala heads a 

team of over 270 physicians and researchers, and in 2007 his work 

was ranked as one of Time Magazine’s top 10 medical breakthroughs of the year. 

Dr. Atala has successfully created fully functioning bladders in 

the lab from patient’s cells, and his team is currently working on 

regrowing over 30 other organs and tissues, including the liver, 

bone, corneas, heart, and kidneys. His team is developing new technology that can print human tissue on demand, and at least week’s 

TED conference, it was reported that Dr. Atala literally printed a 

fresh kidney on stage. 

Dr. Atala received his bachelor of arts from the University of 

Miami and his M.D. from the University of Louisville School of 

Medicine and did his fellowship at Harvard Medical School. 

Our next witness is Dr. Michael Fulkerson, the chief technology 

officer of Rosetta Stone. Rosetta Stone, founded in 1992 as a family 

business in Harrisonburg, Virginia is now a global software company that currently employs about 2,000 people. Dr. Fulkerson is 

in charge of developing Rosetta Stone’s innovative products and solutions to help people unlock their natural language learning ability. Previously he headed the company’s advanced research and development group which was tasked with developing Rosetta Stone’s 

future products. He started his career as a surface warfare officer 

in the United States Navy. 

Dr. Fulkerson received his doctorate in computer science from 

Duke University where he did his dissertation work on techniques 

for building voice-enabled software systems. He received his bachelor’s and master’s degrees in computer science from Villanova University. 

And I yield to the gentleman from North Carolina to introduce 

our third witness. 

Mr. WATT. Thank you, Mr. Chairman. 

I want to welcome the Duke graduate and the Wake Forest—— 

Mr. GOODLATTE. Now you are claiming all three. [Laughter.] 

Mr. WATT. I am claiming all three of them today. So, hey, I am 

doing all right. 

Mr. GOODLATTE. You will recognize the bipartisanship on this 

Committee. 

Mr. WATT. Part of Wake Forest University is in my congressional 

district and all of the Center for Regenerative Medicine is in my 

district. 

But I am here to introduce Dr. Scott Smith who is presently the 

professor and chair of mechanical engineering and engineering 

science at the University of North Carolina at Charlotte, which is 

also in my district. 

Dr. Smith received his B.S. degree in mechanical engineering 

from Tennessee Technological University and his master’s degree 

and Ph.D. from the University of Florida. His research areas include high-speed machining, process optimization, and machine dynamics. 

Dr. Smith joined the faculty at the University of North Carolina 

at Charlotte in 1997 and became the deputy director of the Center 

6 

for Precision Metrology. He assumed the role of department chair 

in July of 2009. He is a member of a number of prestigious organizations and has co-authored the book ‘‘Machining Dynamics: Frequency Response to Improved Productivity.’’ 

He has a distinguished career, having received several awards. 

Most recently he became the recipient of the 2010 Research and 

Development 100 Award. He holds five patents and has served as 

a consultant to a variety of companies and organizations, including 

Alcoa, Apple, Bell Helicopter, Boeing, Caterpillar, and General Motors. The list goes on and on. 

So we welcome you and look forward to each of your testimonies. 

Mr. GOODLATTE. I thank the gentleman. 

Mr. CONYERS. Mr. Chairman? 

Mr. GOODLATTE. Yes? 

Mr. CONYERS. Before we begin, could I recommend that we hold 

a hearing in North Carolina so that it would save us a lot of 

money. [Laughter.] 

Mr. GOODLATTE. Maybe right on the border between Virginia and 

North Carolina. 

Mr. CONYERS. All right. 

Mr. GOODLATTE. I thank the gentleman for his suggestion. 

We will turn now to Dr. Atala. Welcome. 

TESTIMONY OF ANTHONY ATALA, M.D., DIRECTOR, WAKE FOREST INSTITUTE FOR REGENERATIVE MEDICINE, W.H. BOYCE 

PROFESSOR AND CHAIR, DEPARTMENT OF UROLOGY, WAKE 

FOREST UNIVERSITY SCHOOL OF MEDICINE 

Dr. ATALA. Thank you, Chairman Goodlatte, Ranking Member 

Watt, Vice Chairman Coble, and Members of the Committee. It is 

a pleasure to be here to talk to you today about the field of regenerative medicine. 

Regenerative medicine is basically a field that aims to replace or 

repair damaged tissues and organs in the body. It is actually a field 

that uses three different areas. You can actually use either biomaterials alone or small molecules to actually regenerate your 

body’s own organs at the time of healing, or we can actually use 

cells for therapy, or we can actually use cells and biomaterials together to try to engineer tissues and organs for your body. 

I do work at the Wake Forest Institute for Regenerative Medicine, a center that actually involves the work of about 300 scientists, all working together to bring these technologies from the 

bench to the bedside. 

In our area, inventions and disclosures are extremely important, 

as you can imagine. We actually over the last 7 years have submitted or filed over 260 invention or patent applications from our 

team. 

We at the institute work in over 30 different types of tissues and 

organs. We also are part of the Armed Forces Institute for Regenerative Medicine, a partnership that was built between Government and academia to actually try to overcome some of the challenges of organ disease and injury by focusing on basically five specific areas: burns, craniofacial injuries, limb and digit injuries, accelerating wound healing, and another injury that is called comVerDate Aug 31 2005 10:03 May 10, 2011 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6601 H:\WORK\IP\030911\65075.000 HJUD1 PsN: 65075
7 

partment syndrome that occurs when tissues are actually compressed and lead to tissue loss. 

What are the potential benefits of regenerative medicine? I would 

like to define for you four benefits of the field of regenerative medicine. 

The first one is basically the one which is most obvious which is 

the patient’s own benefit because regenerative medicine, as opposed to other areas, has the potential to not just help to manage 

disease but it also has the potential to cure. So that is a very important difference between this field and the potential that it can 

achieve for our patients in the future. 

The second benefit involves health care costs. Basically just 

imagine that instead of managing diabetes, you could actually cure 

it. Or imagine that instead of just managing heart disease, you 

could cure it. So basically it is estimated by very carefully performed studies that the health care costs that could be saved 

through regenerative medicine is around $250 billion per year if we 

were able to achieve a lot of these technologies for just the major 

disease areas that we deal with. 

The third advantage involves economic advantages. It is estimated that the global market by 2013, just 2 years from now, will 

approach $118 billion. So there is a major economic benefit that 

can result through these technologies. 

And finally, the fourth benefit is job creation. If we are able to 

create these technologies here and retain them here in the U.S., we 

would then be able to establish our manufacturing and commercial 

facilities right here by preserving the scientific lead in this area, 

and by allowing these technologies to be produced, we could generate more jobs. And in the biotechnology industry, there is a multiplier effect. For every job that you create in the biotechnology sector, there are approximately 5.7 jobs that are also created. 

So to summarize then, our goal is to improve innovation through 

these technologies, and we are able to improve innovation but we 

do need several things to happen to make sure that we can do this 

in the field of regenerative medicine. This includes increased funding to this area. 

It includes ensuring intellectual property protection for everything we do and to accelerate the process by which we can do that. 

That is critical for the commercial strategies that lay ahead for this 

field. This field is at risk of not accomplishing its goals if we cannot 

retain the leadership we need worldwide for these areas and these 

technologies. 

And finally, to be able to expand our commercial strategies. And 

of course, that also depends on our innovative strategies that we 

can perform. 

Thank you, Mr. Chairman and Members of the Committee. 

[The prepared statement of Dr. Atala follows:] 

8 


Atala-1.eps
9 


Atala-2.eps
10 


Atala-3.eps
11 


Atala-4.eps
12 


Atala-5.eps
13 


Atala-6.eps
14 

Mr. GOODLATTE. Thank you, Dr. Atala. 

Dr. Fulkerson, welcome. 

TESTIMONY OF MICHAEL S. FULKERSON, Ph.D., 

CHIEF TECHNOLOGY OFFICER, ROSETTA STONE, INC. 

Mr. FULKERSON. Thank you, Chairman Goodlatte, Ranking Member Watt, and honorable Members of the Subcommittee. I appreciate the opportunity to appear before you today and want to thank 

you and your colleagues for recognizing the important role that innovation in private industry plays in job creation and the growth 

of the American economy. 

Rosetta Stone epitomizes the critical role that investment in 

product innovation and development can play in the growth of jobs 

and business expansion. Innovative product development has enabled Rosetta Stone to grow from a small family-owned business 

founded in the heart of the Shenandoah Valley in Harrisonburg, 

Virginia to approximately 2000 employees, most of whom are based 

in our headquarters in Arlington, Virginia, our main operational facilities in Harrisonburg, Virginia, and a research center in Boulder, 

Colorado. 

Our company was founded on the innovative idea of using computer technology to teach a new language by simulating the way 

people learn their native language, through the use of visual and 

audio context, without translation from another language. Our 

founder’s original idea is much older than our company. The advent 

of CD-ROM and multimedia technologies in the early 1990’s gave 

him a practical means of converting his innovative idea into a viable product. Through continued investment and research and development, Rosetta Stone has utilized technological and pedagogical 

innovations to create an effective way to learn languages in a convenient and engaging manner. Now available in 34 languages, Rosetta Stone solutions are used by schools, our armed forces, Government agencies, corporations, and millions of individuals in over 

150 countries throughout the world. Every day our innovations in 

language learning help people improve their lives and make the 

world a better place by improving our ability to communicate. 

Rosetta Stone’s investments in product innovation and development have dramatically accelerated our growth. Our employee base 

has grown from less than 300 in 2004 to approximately 2,000 employees today, and our revenues have grown 10-fold from roughly 

$25 million in 2004 to approximately $259 million in 2010. In addition, revenues generated from our international business has 

grown from a negligible percentage in 2004 to 18 percent of our 

revenues in 2010. Our company’s growth demonstrates the important impact of investment and technology and product innovation 

on the American economy. 

Rosetta Stone’s latest major innovation was the introduction of 

Rosetta Stone Version 4 TOTALe which augments our self-study 

computer software with live, over-the-Internet conversations with 

native speakers. We call this future Rosetta Studio. We all recognize that speaking with a native speaker is truly invaluable to 

learning a new language, and our failure to do so or have the access to do so is one of the reasons many of us have been frustrated 

with previous language learning attempts. 

15 

The problem that faced us in developing Studio is that early 

learners have a very limited vocabulary, say, 25 words. You would 

not think you could interact in a language for very long or say anything interesting with so few words. However, the innovations in 

Rosetta Studio have solved this problem. Our learners get the same 

sense of accomplishment that our children get early in their development when they first successfully accomplish a goal using language, something as simple as asking for a glass of milk. 

It is worth noting since the introduction of TOTALe, our company has hired approximately 250 U.S.-based language coaches to 

conduct these online conversation sessions with our customers. In 

doing so, we are exporting the services of these and many other 

U.S.-based employees to countries around the world as we expand 

the availability of our product overseas. As TOTALe becomes available in schools, its online features will enable children learning 

Mandarin to interact online with school children in Shanghai or 

children learning Spanish to interact with a school in Costa Rica, 

thereby enhancing not only their language learning experience but 

also their awareness of other cultures. 

In addition to contributing to the growth of our own company, 

our investments in innovation and development are enabling our 

customers to take advantage of our products to contribute to their 

own success. From supporting English as a second language programs in school systems, supporting the U.S. military, preserving 

endangered languages, to assisting in speech therapy, our customers are finding innovative and often unforeseen ways to benefit 

from our products. 

At Rosetta Stone, we are committed to developing the best commercial language learning solutions through continued investment 

in innovation to meet our customers’ widely diverse needs. At the 

same time, however, we need to protect our investments from 

criminals who seek a free ride on the back of Rosetta Stone’s innovations and profit from the illicit counterfeiting of our products. 

Criminals, often operating out of China, Russia, or other foreign 

countries, routinely offer pirated copies of our products over the 

Internet. This illicit activity substantially weakens our ability to 

create jobs and to continue to invest in innovative products. It also 

tarnishes our brand and harms U.S. consumers. Therefore, Rosetta 

Stone welcomes any legislative initiatives that the subcommittee 

may consider to effectively combat the threat posed by online piracy so that criminals cannot continue to harm consumers, innovation, and the growth of the U.S. economy. 

Thank you very much. 

[The prepared statement of Mr. Fulkerson follows:] 

16 


MSF-1.eps
17 


MSF-2.eps
18 


MSF-3.eps
19 


MSF-4.eps
20 


MSF-5.eps
21 


MSF-6.eps
22 

ATTACHMENT 


MSF-7.eps
23 


MSF-8.eps
24 


MSF-9.eps
25 

Mr. GOODLATTE. Thank you, Dr. Fulkerson. 

And Dr. Smith, we are pleased to have your testimony. 

TESTIMONY OF SCOTT SMITH, Ph.D., PROFESSOR AND CHAIR, 

DEPARTMENT OF MECHANICAL ENGINEERING AND ENGINEERING SCIENCE, UNIVERSITY OF NORTH CAROLINA AT 

CHARLOTTE 

Mr. SMITH. Chairman Goodlatte, Ranking Member Watt, full 

Committee Ranking Member Conyers, Vice Chair Coble, it is a 

great honor for me to testify before you today. 


MSF-10.eps
26 

Innovation is the foundation of our modern society and the continuing source of strength in our economy. To ensure continued 

prosperity in the United States, we must continue to innovate and 

such innovation requires that we have laws, regulations, and policies that foster innovation. 

During my introduction, you heard that I am chair of mechanical 

engineering at the University of North Carolina at Charlotte. UNC 

Charlotte is a relatively new university founded after World War 

II. Our annual research budget is small compared to many other 

universities, on the order of $35 million annually. We have particular expertise in optics, bioinformatics, and precision metrology 

and manufacturing which is my area. 

While we are young, we have some impressive distinctions. UNC 

Charlotte has consistently ranked in the top five of all universities 

for number of inventions created, number of patents issued, number of new companies created per research dollar spent. Over the 

past 10 years at UNC Charlotte, we have created 541 new inventions, received 67 issued patents, and formed 38 new start-up companies. Innovation is important in North Carolina generally and at 

UNC Charlotte especially. 

Our department houses one of the best dimensional metrology 

laboratories in the world and one of the highest concentrations of 

faculty researchers in manufacturing. 

The prestigious International Academy for Production Engineering allows no more than 20 fellows per country. Of the 16 current 

U.S. fellows, four are in our department. All of them have strong 

industry research partners. Faculty and students in our department have founded more than 10 start-up companies in recent 

years. 

I was personally instrumental in the development of technologies 

used to stop vibrations in machine tools and to replace sheet metal 

assemblies by monolithic machining. These technologies have saved 

billions of dollars in the aerospace industry. I am an inventor on 

15 UNC Charlotte patent applications, one of which was recognized 

as one of R&D Magazine’s top 100 inventions of 2010. I am working with industry to help bring this invention to the marketplace. 

UNC Charlotte has a history of working closely with industry 

and commercializing innovation. On average, about 20 percent of 

our research funding comes through industry. By comparison, the 

average amount of industrially sponsored research for American 

universities is only about 5 percent. 

University research can take innovation only so far. Innovations 

often need substantial additional investment and development for 

successful commercialization, and patents do three principal things 

that promote commercialization. They decrease risk by ensuring 

that if research leads to innovation, the effort can be protected. Because the risk is reduced, patents induce investments. Patents 

allow for an innovation to be quantified. Intellectual property is 

often the only tangible asset that a new company has. 

Collaboration between universities and industry is certainly important for our country. Even in a supportive environment, few 

patents become products. By some estimates, less than 2 percent 

of all patents that are issued are ever embodied in a commercial 

product. 

27 

Nevertheless, patents are a necessary tool for turning many 

types of ideas into products. What company would fund research 

work at a university like mine if the results could not be protected 

by a patent? Who would make the investment required to turn an 

innovation into a product if others could easily copy that product 

after the expensive work was done? 

While virtually every industrialized country has its own patent 

office, the U.S. Patent and Trademark Office was one of the first 

and is one of the most developed. Both foreign and domestic inventors apply for patents in the U.S. Many of the inventions are patented only in the U.S. because the U.S. market alone is often large 

enough to justify the costs of commercialization. 

To maintain and grow the U.S. economy, we need a strong patent 

system that encourages investment and innovation and rewards inventors and risk-takers. Specifically, inventors, particularly university inventors, need the 12-month grace period to file the patent 

after a publication or presentation. Universities, small businesses, 

and independent inventors benefit from ‘‘first to invent’’ over ‘‘first 

to file.’’ A three-tier fee system could make it more affordable for 

small companies and independent inventors to obtain patents. 

Better quality patent reviews could be achieved by allowing third 

parties to submit printed references to the patent office for a pending patent, and by allowing the patent office to retain more of its 

fees for their own operations. 

This concludes my oral testimony, Mr. Chairman. I am happy to 

answer any questions you may have. Thank you. 

[The prepared statement of Mr. Smith follows:] 

28 


Smith-1.eps
29 


Smith-2.eps
30 


Smith-3.eps
31 


Smith-4.eps
32 

ATTACHMENT 


SmithA-1.eps
33 


SmithA-2.eps
34 


SmithA-3.eps
35 


SmithA-4.eps
36 


SmithA-5.eps
37 


SmithA-6.eps
38 

Mr. GOODLATTE. Thank you, Dr. Smith. 

Before we go to our usual round of questioning, each of our witnesses has a presentation. So we will start with you, Dr. Atala. I 

understand you brought some visuals and items from the lab of actual organs and tissues that you have created and I would like you 

to share with us how far regenerative medicine has come and what 

the future may hold. 

Dr. ATALA. Thank you, Mr. Chairman. 

[Video shown.] 


SmithA-7.eps
39 

Dr. ATALA. I want to just give you a few examples of regenerative 

medicine and just to remind everybody why we are doing this. The 

fact is that every 30 seconds, a patient dies from diseases that 

could be treated with tissue replacement. That is why we are relying on your own ability to regenerate, the patient’s own ability to 

regenerate. 

So what you see here on the left is actually an injured organ, and 

what you see in the center is actually a smart biomaterial that we 

developed. And we then use this biomaterial alone to actually replace your tissue. So we replace the top portion of that injured area 

that you see here, and by replacing that top portion with a scaffold, 

the cells are actually able to walk on that smart biomaterial and 

fully regenerate. And when you take a tissue biopsy from this patient, you actually can see the full organ regenerated just using 

these smart biomaterials. And that actually has been used now in 

patients. This was the first demonstration of this technology back 

in 1996 in patients, and that is now being done. 

The strategy here for all of regenerative medicine is that for larger defects, you absolutely need the patient’s own cells because you 

can only use smart biomaterials for short distances. For larger distances, you do need the patient’s own cells. So the concept is you 

take a small biopsy from the diseased tissue or organ, less than 

one-half the size of a postage stamp. We then are able to take those 

cells, expand them outside the body, create these three dimensional 

biomaterials, and then place the cells on those biomaterials to replace the tissue. 

You are seeing a bioreactor with muscle, engineered muscle. The 

same concept here. We take the biomaterial. We take a very small 

piece of the patient’s muscle. We grow the cells outside, place those 

cells on these scaffolds, and then we start stretching that engineered muscle so we can exercise it before implanting them. 

Here is another strategy that we use to create blood vessels. This 

is actually an engineered blood vessel. What you see here is a scaffold that was tubularized. We place the patient’s muscle cells on 

the outside of that tube, the blood vessel lining cells on the inside, 

and to the right you see a carotid artery that was replaced using 

these techniques experimentally. That is the vessel that goes from 

the neck to the brain. 

This is actually a bladder, a more complex organ. This is actually 

showing you the engineered organ in a patient, and this is actually 

showing you the scaffold and how we seed those in patients. 

This actually is another hollow organ which is a little bit more 

complex. This is an engineered heart valve that we are creating. 

You can see here the heart valve itself that has been now coated 

with the cells, and we are exercising the heart valve so it knows 

what to do. You can see here the leaflets opening and closing from 

the structure so that we can implant these. This is still also experimental. 

This is actually work that we are doing with the Armed Forces 

Institute for Regenerative Medicine where we are creating engineered ears, and this is actually showing you how we seed those 

and place them in this oven-like device that actually has the conditions of the human body. 

40 

Another project also for the DOD is engineering these digits. You 

can see here we are actually placing the bone cells in the central 

portions. We would place the cartilage and then we would use 

those muscle strips I showed you in that first slide to actually finish off the digit. This is still, of course, experimental. 

Solid organs are by far the most complex, and this shows you a 

strategy that we used early on. This is actually a desktop inkjet 

printer. We just showed you the inkjet cartridge, but instead of 

using ink in the cartridge, we use cells. You can see the desktop 

inkjet printer going back and forth actually printing this two-chamber heart. It takes about 40 minutes to print a two-chamber heart. 

About 4 to 6 hours later, you can actually start to see the little 

heart beating. You can see the heart structure is beating away, and 

this is, of course, also experimental for solid organs which are more 

complex. 

Another strategy for solid organs includes more sophisticated 

printers where we actually use x-rays. We are able to go down 

three-dimensionally in these x-rays and we are able to get right 

down to the organ. And by looking at the organ itself—in this case, 

it is a kidney—we are able to three-dimensionally rotate the image 

of this patient’s x-ray and take the information necessary to actually create the CAd printing that goes on. We take this information 

down for the CAd printing into the computer three-dimensionally. 

We then place the cells on these cartridges and this actually shows 

the printer actually being initiated printing this three-dimensional 

kidney structure, this construct that you see here, one layer at a 

time. These are actually, of course, still experimental where we are 

using these for implantation purposes. 

And then I am just going to share briefly with you now for 30 

seconds this brief clip of a patient who received an engineered bladder. So you can see firsthand from this patient what he is thinking. 

This was just recently recorded. 

[Video shown.] 

Dr. ATALA. That was Lucas Masella. He is now 10 years out from 

having received his engineered organ. So you see for us the promise 

of regenerative medicine is not about the technologies we choose. 

It is about the ability for us to help our patients, and having innovation, the patent on intellectual property is an important part of 

this process. 

Thank you, Mr. Chairman, Members of the Committee. 

Mr. GOODLATTE. Thank you, Dr. Atala. 

Dr. Fulkerson, I understand you have a demonstration for us of 

Rosetta Stone’s latest language learning program. If you could take 

a moment to show us and I believe introduce us to your language 

coach. 

Mr. FULKERSON. Thank you, Mr. Chairman. 

So what I am going to show you is a quick introductory video 

that is the first exposure that our customers have when using Rosetta Stone v4 TOTALe to introduce the product to them. And then 

I will make a few comments at the end. 

[Video shown.] 

Mr. FULKERSON. As a technologist, this is embarrassing. [Laughter.] 

41 

Since we don’t get to hear it, I will pause it and talk through the 

main part of our product. 

The way Rosetta Stone works is we use pictures, sound, and text 

to convey meaning. So most language learning systems that you 

have used, going back to school, have always relied on translation 

where someone teaches you in the language that you already know 

about the language that you are trying to learn. At Rosetta Stone, 

we feel strongly that that just is not the right method. The right 

method is to try to immerse people in the language they are trying 

to learn and use those same cognitive processes that our children 

use to learn language as adults learning. 

So we have set up situations, almost little puzzles, that give you 

a situation that you can start to see differences between pictures 

or hear differences between sounds, the same challenge that our 

kids do when they learn a language to try to figure out what is 

that new thing that mommy or daddy just said. My 5-year-old 

probably doesn’t know what a microphone is, but if I were to say 

I’m talking in a microphone, he could figure out that this thing in 

front of me is probably a microphone and from context start learning. And that is exactly how Rosetta Stone works. So we don’t rely 

on the crutch of translation. We rely on your own ability reason 

and to think and solve those sort of small, little micro puzzles, but 

as you do, you start feeling much more confident in your own ability to learn as opposed to memorizing things that are hard for us, 

even in our native languages, like grammar. Most of us probably 

don’t look fondly on the days of learning English grammar, but 

that is how we try to teach people their second language or their 

third language. So the idea of immersing you in a way that feels 

fun and light and engaging is how Rosetta Stone works. 

Our newest innovation that we call Studio is the idea that just 

using interactive software is better than most other methods to 

learn the language. You can start speaking. We have proprietary 

speech recognition that you can speak a substantial amount of time 

in our product. But talking to a native speaker is still invaluable. 

Having the opportunity—again just like our kids have the opportunity to talk to their parents and listen to their parents, that 

interaction with a native speaker is a critical piece. 

But when you are very early in your language learning journey 

and you only know a small number of words, you know, 10, 20, 100 

words, it is very hard to be successful. If I were to teach you 10 

words of Portuguese and send you to San Paolo, you wouldn’t think 

you could be very successful. But kids with a very small number 

of words can be successful. They can ask for something and get a 

response from their parent that starts making them feel confident 

and gain the confidence to try to use that language. And that is 

exactly what we have captured in Rosetta Studio. Rather than try 

to get you to finish your language learning journey, get you to the 

point that you know 2,000 words and can actually go to San Paolo. 

We want you to feel successful very, very early, that sense that 

I can do it, I can learn a language because, to be honest, that has 

been the impediment for many of us learning a language is you feel 

you can’t do it. You don’t have a means to practice. You don’t have 

a means to be successful. So the advent of Rosetta Studio and the 

ability from a business perspective to affordably provide native 

42 

speakers to language learners around the world via the Internet is 

an innovation that we rolled out in 2009 and then mass rolled out 

just last September across the U.S. to our consumer business and 

are in the process now of rolling out around the world. By the end 

of this year, it will be live in all of the Rosetta Stone offices in 

Japan, Korea, Germany, the United Kingdom, and hopefully by the 

end of the year China and Brazil. 

Sorry about the technical problem. 

Mr. GOODLATTE. Thank you very much. 

We are going to have to recess in a moment to attend a joint session of Congress where the Prime Minister of Australia will address the Congress. We are required by our House rules to do so. 

But you might use that opportunity to see if you can get that to 

work. 

Dr. Smith, we will try to get your presentation in before we go. 

Mr. SMITH. Okay. 

[Video shown.] 

Mr. SMITH. I am going to show you three different things. These 

are innovations that came out of my work at the University of 

North Carolina at Charlotte. 

The first one is the technology that was used to replace sheet 

metal assemblies in aerospace applications with monolithic 

machinings. So in the top left, you can see an avionics tray that 

came out of the F-18. And on the left part of that figure, you can 

see the pieces that used to be assembled together from folded sheet 

metal components. And on the right, is the monolithic piece that 

was cut down from a solid. Now, you might think that we are 

throwing away a lot of aluminum, and that is true, but that is not 

where the cost was. The cost was in the hand labor and all the special fixtures and tooling that were required to do the assembly. The 

end result of this kind of a switch was huge. On the little avionics 

tray, it was a 73 percent reduction in cost. But all over the F18, 

Boeing estimates more than $1 billion in savings in that program. 

Between the C/D model and the E/F model of the F-18, the plane 

got lighter and less expensive and cheaper, and getting all three of 

those together is really unusual. 

So now the technology has spread over into commercial aerospace. So there are lots of parts like this on jumbo jets, for example. And you can see in the bottom picture this person is machining 

a cargo deck floor for the 777, and this thing is 10 feet by 5 and 

a half feet. It is about 5 inches thick. It starts out as a 2,500 kilogram slab of aluminum, and by the time the machining is all done, 

it is down 113 kilograms. The parts continue to get bigger and bigger because there is cost savings every time that happens. 

Additionally, there are weight reductions because of the assembly. When you put together the sheet metal pieces, you have to 

have two layers of sheet metal and a fastener that goes between 

them. If it is monolithic, you don’t have that. If the sheet metal 

pieces don’t quite fit, then you have to put a shim into the space 

between them to make the fit tight. A typical jumbo jet has something on the order of 2,000 pounds of shims, and you carry those 

shims through the whole life of the aircraft. You pay a weight penalty, a fuel penalty the whole life of the aircraft. So we have a techVerDate Aug 31 2005 10:03 May 10, 2011 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6601 H:\WORK\IP\030911\65075.000 HJUD1 PsN: 65075
43 

nology to make the machining of these monolithic components more 

accurate. 

This one shows a concept. After the machining of something that 

is thin, we switch to a different tool which we use to push the thin 

parts around into a different configuration. So this part is about 

the size of my hand, and it is a heat sink. So a heat sink means 

that it dissipates the heat that something else produces, an electronic component, for example. So this has a lot of surface area, not 

much mass. It means it can dissipate a lot of heat. 

Now, ordinarily something like this is relatively expensive and 

difficult to make. We made this in about 10 minutes on a relatively 

simple three-axis machine that most shops have commercially. 

The last one that I will show you here is a technology that we 

developed for the breaking of chips. There are a lot of manufacturing operations that produce long, stringy chips in the cutting operation. We are shaping the metal from one size to another. As the 

metal peals off, it makes a long, stringy chip that gets tangled up 

on itself. And you can see in the pictures on the top left, the top 

right, the bottom left, these things often make a big snarl. They 

call it a bird’s nest. Sometimes the operator is injured in trying to 

remove this. Sometimes the work piece is damaged. The sponsor for 

this was Oak Ridge Y-12, and their material is pyrophoric. It 

means it can catch on fire from the heat of the cutting. So the snarl 

is very dangerous. 

What we did was to use the axes of the machine tool, the motion 

of the machine itself, to cause the chips to break, and this makes 

the chips break all the time. That is the photograph on the bottom 

left, just above the picture of the team. So this has applications 

across a wide variety of industries, including biomedical and plastics, in addition to the metal ones that I have shown you. 

Mr. GOODLATTE. Thank you very much. 

The Committee will stand in recess. We anticipate that we will 

reconvene at about 11:45 or sometime hopefully not too long thereafter. And we will take questions from the Members of the Committee at that time. 

[Recess.] 

Mr. GOODLATTE. The subcommittee will reconvene. 

We will go now to our questions, and I will begin with a question 

for Dr. Fulkerson. 

How important is brand protection and copyright enforcement to 

Rosetta Stone’s business, and what proactive steps has your company taken to protect their products overseas and online? 

Mr. FULKERSON. Thank you for that question, Mr. Chairman. 

Obviously, in the technology world, especially in the consumer 

technology world, the power of your brand is in some ways as important as the quality of your product. It sets the initial expectation with customers of what they expect and what they are buying. 

So the power of Rosetta Stone as a brand is tremendously important. We spend a considerable amount of time protecting, both actively and sort of defensively, our product from both copyrighted 

type infringement where people would take our content, repurpose 

it in their own version of a software application. We also work very 

hard to protect just the software itself, in some cases actually to 

the detriment of our customers because we do things like put in adVerDate Aug 31 2005 10:03 May 10, 2011 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6601 H:\WORK\IP\030911\65075.000 HJUD1 PsN: 65075
44 

ditional safeguards to lock the software, which is sort of a nuisance 

to customers, but we have to do it to make it harder for pirates to 

copy it and sell it. 

And then I think the most egregious form that we see is people 

who just flat out pirate our software, who take the code that we 

have written, put it on their own CD’s or DVD’s, advertise it on 

search engines, and then sell it in some cases as our product even 

as Rosetta Stone. So it is not uncommon to find pirates often overseas who have taken our exact website, replicated it 100 percent, 

sitting on servers in a place where it is hard for us to reach them, 

and then selling what looks to be Rosetta Stone software, taking 

unexpecting folks credit cards, sometimes delivering software, 

sometimes not delivering the software. But what we often find out 

when we get copies of that in, it is often not only a pirated copy 

but a copy that actually doesn’t even work. So they are seriously 

hurting our brand from folks who get software that is actually broken. 

I would say the amount of money that we spend to defend 

against that is money that we could be spending on other things. 

We could be spending that same money—the millions of dollars we 

are spending to protect that we should be spending on innovation 

and the next generation products, but instead we are spending that 

money on defense. 

Mr. GOODLATTE. Taking that a step further, there is a general 

shift in the software industry from packaged software to cloud computing. Do you see the future of the software industry in cloud 

computing as a way to clamp down on piracy and push innovation 

to consumers at a much faster pace, or do you see it as a problem? 

Mr. FULKERSON. As in everything, there is a little of both. I think 

in the enterprise computing space, people who are selling software 

to companies, cloud computing is sort of an immediate answer to 

provide better service. In the consumer space—and we are split. 

We have, obviously, customers that are large enterprises and customers that are consumers. Some of the cloud computing and the 

online and streamed kind of products are slower to be adopted by 

consumers. Consumers like the idea of buying it and having it, 

knowing they own it, and knowing if they change computers, they 

can reinstall it. But I think, as you point out, the trend is increasingly toward those kind of cloud computing initiatives. 

I think the free services that we see in cloud computing, obviously, with explosive growth are a different case, but when you are 

actually trying to sell a product or sort of lease a product for a certain amount of time in a cloud environment, that is something that 

consumers, as of today, are not comfortable with. But as you also 

point out, it is a place where it is safer for us because when we 

control the servers and when it is very clear that we can sign those 

in a way that we can sort of validate that this is Rosetta Stone and 

our customers can come to our servers, it is much harder for folks 

to just flat out copy it. People will and there are famous examples 

of where people have copied and cloned cloud services also, but I 

think it is a much safer place and a place where if the consumers 

would appreciate it more and value that kind of service more, we 

would love to move in that direction. 

45 

Mr. GOODLATTE. Dr. Atala, you described this new field of regenerative medicine that uses a person’s own reprogrammed stem 

cells. You mentioned in your remarks about how this could impact 

health care costs. What kind of new industries can you see developing around this field, and what steps have you taken toward 

commercializing your patents? 

Dr. ATALA. So there are many areas that you can actually direct 

these therapies for. For example, a lot of these cells can actually 

be used to help with diagnostic tests. So you can actually use a patient’s own cells with specific disease states. For example, you can 

take patients who have congenital disorders who have a gene-specific disease and pull cells and actually use those cells to help with 

diagnostic kits. 

Another area where these cells can help is not just to use the 

cells to engineer organs, but actually just to inject them for therapy 

in the same patients. And there are many ways to do this. Some 

of the steps that we have taken to actually get this in the path is 

to actually get these technologies to patients. That is really the 

first step. How do we get these technologies to patients? Of course, 

we have to work very closely to go through the typical phase I, 

phase II, and phase III clinical trials that we need to go through 

with regulatory oversight by the FDA. After those clinical trials are 

done, then you can actually start to make that technology available 

to many other patients through industry. That is where these two 

factors come into play. 

One is to make sure that we have the intellectual property necessary so that we can protect these technologies and to make sure 

that those patents are strong, that people can’t contest those patents. 

Second is to make sure that we get those technologies early, that 

we can assure that we have protection early with these technologies so we can go forward. And that is important because otherwise it is hard to get that kind of investment, especially when it 

is so costly. 

And third, once we actually go through that process, the regulatory process is extremely important. And that is also something 

that really needs to be dealt with. We need to somehow help to 

streamline that process and then finally get those technologies out. 

I must comment, though, that the typical technology right now that 

goes through the FDA takes about 14 years, over $1 billion. 

Mr. GOODLATTE. So given that this work started in the mid1990’s, do you have developed technologies that are commercially 

available now, or are you still waiting on FDA approval? Or are 

you not to the point of even requesting FDA approval? 

Dr. ATALA. Yes, we are through the FDA process now actually. 

We are currently involved with the FDA process in some of these 

technologies. Some are already commercial. Some of these regenerative medicine technologies are already commercially available, 

but some of them are still in the regulatory process, and that has 

been actually for two reasons. 

One of them is that we did that on purpose to go slow. We have 

to go slow at first. So the patient that you saw, the clip that you 

saw earlier today, for example—we actually waited until we had an 

experience of up to 8 years of follow-up before we actually even 

46 

published the study. And the reason we did it slowly and carefully 

was because it was a new technology, and we really did not know 

what to expect long-term. There were many unknowns, but that 

was now in 1998 when we put that first technology in. 

So now we can afford to accelerate the technology. We do not 

need to wait—to have a 5-year follow-up in all our patients like we 

did before. We can now afford to do this in a quicker manner and 

to actually translate these technologies in a more accelerated fashion because now we have tissues in patients, and there are many 

different clinical trials for over 14 years in some cases. 

Mr. GOODLATTE. One more question. I will start with Dr. Smith 

and then turn to you, Dr. Atala. 

As you have worked to commercialize your research, how important has the patent process been in securing funding and partnerships with larger companies and other entities? 

Dr. ATALA. Extremely important, extremely important. Of course, 

one of the challenges that we have right now is the major backlog 

of the patents. So we have a lot of intellectual property that we are 

waiting to get a final result on. So that has actually been a challenge for us in the more recent years. All these applications that 

we have in, but not going through in an expedient manner. 

Mr. GOODLATTE. Can you do the patent process and the FDA approval process at the same time, or does one have to begin before 

the other? How does that—— 

Dr. ATALA. Well, the challenge for us is that if you don’t have intellectual property secured, it is very hard for investments to come 

in. So we need intellectual property so industry can trust that they 

will have something that will really give them the protection they 

need to go and make those large investments. So basically you 

can’t have one without the other, which means that you really can’t 

go and start treating patients necessarily through industry unless 

you have that protection. 

Mr. GOODLATTE. Dr. Smith, what has been your experience? 

Mr. SMITH. Well, certainly there is a lot of work that has to happen between the time that an idea has been shown as proof of concept, something that could be patented, and when a commercial 

product is created. There is a lot of work. There is a lot of expense 

that comes after the invention and before the commercialization. 

And the patent provides the protection to those investors. It draws 

the money to the idea because you know that you have protection 

for that hard work. 

Now, certainly I will concur that the backlog in the patent office 

makes this difficult. But it is critical, especially to a startup company where the intellectual property is often the only tangible 

asset that the company has. The company is formed based on an 

idea, and it needs to draw the investment. And the patents are 

what makes that possible. 

Mr. GOODLATTE. Thank you. 

I will now turn to the gentleman from North Carolina. 

Mr. WATT. I guess this is a variation or an extension of Chairman Goodlatte’s question because I was going to ask you about 

your experiences with the patent office. Have they been good? I 

guess both of you all—all three of you possibly—have suffered the 

delay process. Is that correct? Is that true of all three of you? 

47 

Dr. ATALA. Yes. 

Mr. FULKERSON. Yes. 

Mr. SMITH. Yes. 

Mr. WATT. Except for that, how have your experiences with the 

patent office been? Do you find them competent, I mean, well prepared to do it once they get to it? 

Mr. SMITH. I will say in my experience the eventual outcome was 

often quite good. But the backlog is high. So the time to get to the 

outcome was long. And often the first review that we got was relatively perfunctory. It was more or less like a keyword search. And 

I think that this is because of the backlog. So the eventual result, 

after some responses from us to their reviews, was usually quite 

good, but the initial response that we got from them was often not 

satisfactory. 

Mr. WATT. I guess if I followed Mr. Conyers’ entreat, I should 

have been asking these questions in Spanish. [Laughter.] 

So hablo espanol un poquito, muy poquito. So I am not going 

there. But that was for Chairman Conyer’s benefit when he looks 

at the record. I did want him to know that if he were here and he 

were challenging me, I would compete with him. Gracias. 

Dr. Smith, we have been hurtling down the road toward doing 

converting from a ‘‘first to invent’’ to a ‘‘first to file’’ system. I am 

led to believe that you have some wisdom to share with us on that. 

So let me allow you to get that wisdom into the record, and if either of the other two witnesses have either pros or cons to say 

about ‘‘first to file’’ versus ‘‘first to invent,’’ I would like to hear 

whatever comments you have on that. 

Mr. SMITH. Okay. I know that this is a somewhat controversial 

issue at the moment. 

I will start by saying I think that the Constitution talks about 

protecting the rights of the inventors, and it seems to me hard to 

argue that the inventor is the one who filed first. I think the inventor is the one who made the invention. So that seems clear to me. 

But beyond that, I would say that ‘‘first to file’’ tends to favor 

those organizations that have large patent staff on board, a large 

funding base and a large number of people to help prepare the patents because the motivation is to file quickly and often. So you file, 

file, file, file, file. I think it is disadvantageous to small companies, 

small universities, small inventors. I think particularly at the university level, I said that we need the protection of the 12-month 

grace period, and it seems difficult to reconcile the 12-month grace 

period with ‘‘first to file.’’ 

Mr. WATT. Any other comments? 

Dr. ATALA. Yes. One of the challenges so that we can face with 

our patent system is that when you look at the patent system 

internationally, it goes through a ‘‘first to file.’’ So in a way, we are 

not consistent with that system, and that becomes a little bit problematic when we go to the international arena because a lot of the 

patents that we file we are not filing just for U.S. protection but 

also for European protection and Asian, basically all over the world 

for the most part, and that in a way may put us at a disadvantage 

not to be in the same system of ‘‘first to file,’’ which is the current 

system that is used pretty much internationally. 

48 

Mr. FULKERSON. I would add in the technology world I think 

things may be different than in manufacturing and biomedical 

where someone can grow a multibillion corporation that was started in the dorm room. That person sitting in their dorm room isn’t 

thinking about the 5-year or the 6-year process and the tens of 

thousands of dollars to get a patent. They are trying to get their 

product to market. And so I think the initial Rosetta Stone innovations don’t have adequate intellectual property protections in some 

ways. At this point, it is moot. But at the time, our Founders were 

trying to get products to market and were trying to raise capital 

by selling and raise revenue by selling products. So I think in that 

situation, clearly we would not have had a filing advantage. 

I believe there is a problem right now with our patent system 

with the concept of trolls, folks who aren’t making products. They 

are trying to generate revenue through the courts with patents. I 

think ‘‘first to file’’ makes that worse. You will have folks that are 

trolling to file first, not innovators, not product companies. So I am 

envisioning what could happen, but to me that is a dangerous situation. 

Mr. WATT. Except for shortening the backlog and speeding up the 

process, are there any other specific procedural changes that either 

of the three of you would suggest to improve the patent process? 

Mr. SMITH. Okay, I will go. 

Mr. WATT. All right. 

Mr. SMITH. Certainly there is an issue that in the current law 

it is one-size-fits-all, and yet there is a range of different kinds of 

products which are being patented. So some of them like software 

have relatively short lifetimes, and some of them like medical products have relatively long development cycles. So in one case the 

lifetime of the product expires before the patent is even examined, 

and in another case the patent protection expires before the product comes to market. And so certainly some kind of a recognition 

of this variation in the products which are being patented might 

be useful. 

I would also say in the current fee structure, there is a two-tier 

system. So even the lower tier is still prohibitive for many small 

entities. Maybe there is a possibility for a third tier, a micro-sized 

company. 

Dr. ATALA. I would have to agree with Dr. Smith that in terms 

of biotechnology, it does take longer to develop these technologies, 

and it does take longer to go through the process of trials. So I do 

agree with the statement that Dr. Smith made in terms of the 

length of the patents. 

One of the challenges is to be sure that one’s patents do get 

issued, that one is certain that we can assure the inventor that the 

invention is actually true, that we can actually retain that patent 

as being one that is solid in terms of its claims. And that is certainly a challenge these days in many areas that we experience 

where patents are being challenged and other types of procedures 

are being done. So it would help us tremendously to assure that 

the patents that in fact are issued are solid and true to what they 

represent. 

Mr. WATT. Dr. Smith, it seems to me that in—well, even I guess 

all three of you—possibly there would be some consideration of 

49 

prior art, if you are basing what you have done on somebody else’s 

invention, research. How has that been a factor in the way you 

have proceeded? 

Mr. SMITH. Certainly when we prepare a patent application, we 

try to disclose the prior art. We disclose everything of which we are 

aware. And when the examiner examines the patent, they look for 

additional prior art that we might not have been aware of. Yet, this 

is a really tall order for the examiner. How can they be aware of 

all of the trade journals, all of the publications, all of the places 

where the prior art might have appeared? It is a demanding task. 

And I think giving third parties the ability to submit written documentation about a patent which has been published but not yet 

granted would be useful. Essentially you get interested parties assisting the patent office in finding the relevant prior art. 

Mr. WATT. Finally, I don’t see lights up there, so I am kind of 

wondering here. 

The technology transfer from the research to the commercialization of it is always a challenge there for universities in particular. 

Is there some way we can streamline that to make it clearer, or 

is it just a different case for every technology commercialization 

and just too hard to develop a set of rules for? 

Mr. SMITH. Well, certainly I will say that it is helpful that the 

university can own the intellectual property even though the research might have been funded by an agency of the Federal Government, for example. The tech transfer office at our university is 

motivated to try to get those technologies commercialized. We view 

that as one of our key missions at the university to get the research work out into commercial practice. 

Dr. ATALA. In terms of the technologies that we develop, it is 

very important that we continue with the protection from the 

Bayh-Dole Act. It is critical because that actually allows us to do 

the research with national initiatives, programs which are designated by the Nation to be of great need. And if we didn’t have 

that ability, we would then be relying mainly on just special interest of specific groups to actually pursue that research. 

Mr. WATT. The Senate has passed a bill, and we may be calling 

on you all’s technology transfer people to take a closer look at what 

they have proposed and what may or may not be in the House 

version of the bill. So I may be calling on—it is nice to have experts 

I can call on, though. So I appreciate you being here. 

Mr. Chairman, I will yield back the balance of my time. 

Mr. GOODLATTE. I thank the gentleman. 

It is my pleasure to recognize the Ranking Member of the full 

Committee, Mr. Conyers from Michigan. 

Mr. CONYERS. Thank you, Chairman Goodlatte. 

Can we get a credit for medical school for the performance and 

the work that was offered here today? 

Mr. GOODLATTE. It will be part medical and part law school. 

[Laughter.] 

Mr. SMITH. Some engineering. 

Mr. CONYERS. Dr. Atala—— 

Mr. WATT. I wanted you to know that I challenge you to do your 

questioning in Spanish. 

Mr. GOODLATTE. Right and your tests will be in Spanish too. 

50 

Mr. WATT. I did mine in Spanish. 

Mr. CONYERS. I should have expected—— 

Mr. WATT. You issued the challenge. I rose to the occasion in 

your absence. 

Mr. CONYERS. Thank you. 

You mentioned heart disease and diabetes as things that we 

need to pay more attention to, but what about cancer where treatment is given more attention than prevention? 

Dr. ATALA. Absolutely. Well, I think that is where regenerative 

medicine really has a role, a very special role, because currently if 

you think about disease, most of the time you are not aware that 

you have that problem until your organ is very far gone. I will give 

you an example. You may be playing tennis once a week, and you 

have never experienced any problem. Yet, one day you play tennis 

and right after you get chest pain. You go to the doctor’s office. 

They do an arteriogram and they find out that your vessel is now 

over 90 percent occluded. Interestingly, that is when you start having symptoms, once you are over the 90 percent range. You didn’t 

have that pain when your vessel was 70 percent occluded or even 

80 percent occluded. So regenerative medicine has the ability to actually start treating you much earlier. By prevention, by you being 

more aware of your body’s functionality over time, you may be able 

to prevent that end stage part of your disease by picking up these 

diseases early and addressing them earlier. 

Mr. CONYERS. Now, what about the annual checkup? Does that 

give us any consolation? 

Dr. ATALA. Well, you know, the annual checkups that you go 

through are good and they are certainly something that should be 

done, but the challenge is that doing a 360 analysis of your body 

currently is not necessarily economically feasible or possible because it is so complex. And so I think a lot of the work that is being 

done currently with genetics where we will be aware of what your 

genetic predisposition is based on your genome so we can actually 

take a small sample of your saliva, for example, and do a genome 

analysis where we know what your traits are, what genes are you 

expressing. We can then take those genes and start correlating to 

disease, and we will know what you are prone to get. And now we 

can start focusing in those specific areas based on your family history and your own genetic code and start preventing diseases that 

you are more prone to have. 

Mr. CONYERS. Well, I don’t want to get too personal but Mel 

Watt and I both try to play tennis at this stage of our life, and 

what I am interested in is that at the 90 percentile, before we get 

a little heartburn after tennis, you are telling me, in effect, that the 

annual checkup will not have us discover that before we get to this 

very advanced circumstance. 

Dr. ATALA. Yes, that is correct. Not all the time. that is the challenge and that is why people come with a chest pain when they do 

with heart disease. I mean, that is the challenge. And really, the 

only way to do that—let us say we want to look at your blood vessels. I mean, you have to go through an arteriogram. So your heart 

disease and your symptoms is what really prompts the physician 

to do that. 

51 

So that is why prevention is so important, and regenerative medicine really does play a major role in that because you have the capacity to actually hold off disease when you first detect it. And so 

better detection and better prevention are totally part of what regular health care should be. 

Mr. CONYERS. Could I get a couple minutes more, Mr. Chairman? 

Mr. GOODLATTE. Without objection. 

Mr. CONYERS. Thank you. 

Dr. Fulkerson, we will be holding a hearing Monday on rogue 

websites and the piracy and so forth. I hope that you will be able 

to follow that along with us and give us your subsequent comments 

and recommendations as a result. 

Now, we have got some legislation called ‘‘Combating Online Infringement and Counterfeits,’’ and we are trying to get that 

through to stop pirates from getting payment. Your comments? 

Mr. FULKERSON. I am not familiar with that exact piece of legislation. But the problem of rogue websites—both their existence and 

the ease that they are found are things that I think that your subcommittee—we would welcome you to think about those problems. 

Related to the intellectual property side, the patent reforming 

law gets a lot of attention. The trademark law and policy, which 

ends up making it easier for these rogue websites to be discovered 

through search engines, is something that we would also love the 

subcommittee to think about, which is all terms in a search engine 

aren’t equal. Some of those terms are trademarks. And when someone types in a trademark’s term, that’s not just like typing anything else. It has special protections in most cases under our laws. 

But trademark law and policy hasn’t caught up in my opinion to 

the modern use of search engines and trademarks. That makes it 

easy for consumers to both find and to be duped by those rogue 

websites. It makes it very easy to type in a term and, bang, you 

are on a site which you may think is the owner of that trademark 

where in fact it is a bunch of people in the back of an alley in a 

place that isn’t Harrisonburg, Virginia. So that is something that 

we would love to see legislative action and investigation from your 

Committee. 

Mr. CONYERS. Dr. Smith, ‘‘first to file’’ is something that businesses and foreign companies recommend, but universities and 

small businesses and garage-type inventors are less enthusiastic 

about it. What are your comments? 

Mr. SMITH. Well, certainly ‘‘first to file’’ provides clarity, and clarity is useful in drawing investment to a company. I understand 

that. I also hear the argument that ‘‘first to file’’ would harmonize 

our patent law with the laws of other countries. I don’t find that 

argument particularly compelling. Certainly there are countries 

that don’t respect intellectual property at all, and we don’t want to 

harmonize our law with them. So I think the issue is protecting the 

rights of the inventor, and clearly the inventor is the one who created the invention. 

I will say I think there is also an issue that ‘‘first to file’’ encourages frequent filing of patents that may be of lower quality than 

if you have time to develop the idea more fully. So I think it makes 

the problem of the backlog at the patent office worse. 

52 

Mr. CONYERS. Is there anybody here more enthusiastic about 

‘‘first to file’’ among the witnesses? 

Dr. ATALA. Well, I mentioned that one of the challenges that we 

have is that if we are not consistent with the international system, 

that may place us at a disadvantage. 

Mr. CONYERS. Thank you very much, Mr. Chairman. 

Mr. CHAFFETZ [presiding]. Thank you. 

I want to talk, Dr. Atala, about—can you walk us through the 

Armed Forces Institute of Regenerative Medicine’s most immediate 

research goals, and are there companies that you are currently 

partnering with? 

Dr. ATALA. Yes. The Armed Forces Institute of Regenerative 

Medicine is really an effort to bring together the best technologies 

that we have for our wounded warriors, and this is in one of four 

major categories, five areas but four major categories, which include burns, craniofacial injuries, limb and digit injuries, including 

compartment syndrome, and scarless wound healing. And it really 

brings together over 30 institutions with every branch of the military supporting this effort to bring these technologies faster. And 

we are developing technologies right now for our wounded warriors. 

The goal of AFIRM was to actually have one technology ready for 

our patient before the 5 years of the initial program were completed. We are now basically just starting year 3, and we have 15 

clinical trials currently at some stage of development. 

Mr. CHAFFETZ. What do you see happening with jobs? Assuming 

that everything continues to progress to the optimism that we all 

hope that this happens, what is going to happen to the job market 

in this sector, if you are able to have that success? 

Dr. ATALA. Hopefully that will increase markedly. And so by having all these technologies at the clinical trial level, we already have 

many commercial partners which we are bringing into the Armed 

Forces Institute for Regenerative Medicine, and these commercial 

partners together with AFIRM investigators being able to bring 

these technologies to industry so that these products can be manufactured here in the U.S. and thus increase jobs and create jobs for 

our citizens. 

Mr. CHAFFETZ. Dr. Fulkerson, your company, Rosetta Stone, is 

truly a global company. Tell me about your experience internationally, what market access problem/challenges that you face, the 

competitive markets that you are feeling, and how that relates to 

what we are talking about here today. 

Mr. FULKERSON. Thank you. Sir, right now we have offices in 

four countries internationally and are considering expanding in 

others. Unfortunately right now, some of the world’s largest language learning markets are countries that do have notoriously high 

piracy rates and, in some cases, as we just talked about, disrespect 

for intellectual property. And so even though those are tremendously very large markets for us, the risk and the burden of trying 

to enter those markets such as China is one that—we would love 

to have been there already, but those obstacles have kept us from 

going. 

Mr. CHAFFETZ. But are you selling any product in China? 

Mr. FULKERSON. We say we are huge in China but we don’t generate any revenue in China. 

53 

Mr. CHAFFETZ. Do you have anything to quantify the pervasiveness of the problem in China? 

Mr. FULKERSON. It is hard to quantify. We could certainly send 

you photographs of Rosetta Stone-looking kiosks in Shanghai that 

aren’t run by Rosetta Stone, and it is not Rosetta Stone—— 

Mr. CHAFFETZ. So how do you follow through on that to make 

sure—I mean, you are a company. You got employees. You are trying to do the right thing and somebody is taking your brand, your 

product, selling it in China. What do you do? Who do you call? 

Mr. FULKERSON. It is a great question. In China, there is very 

little that we can do. Working with U.S. Customs and ICE here in 

the United States—and they have been very helpful in helping us 

intercept pirated goods coming in. 

Mr. CHAFFETZ. So what do they tell you when you say, hey, look 

we got a problem in China? What do they say? 

Mr. FULKERSON. I am on the technology side. I should get someone else to answer the specific question of what kind of responses 

we get. But my impression, my layman’s impression, is that they 

basically say there is not much they can do, but they will petition 

the Chinese Government. They will send letters, but my belief is 

that those are just ignored. 

Mr. CHAFFETZ. Well, that would be interesting. I would love to 

follow up how a company who is starting to be successful—how 

they follow up with the enforcement side of things, not just for the 

importation but what is happening in other markets, China and 

others. It is not just China, but certainly that is the one that you 

continue to hear time and time again. 

We have just a few seconds. Dr. Smith, tell us just in the briefest 

words—we always talk about getting more kids engaged and interested in engineering. How do we do that? 

Mr. SMITH. I think you have to show them something exciting. 

There are plenty of exciting activities at our university. We have 

a big tour program. We bring students through a lot. Motor sports, 

for example, is a big draw in North Carolina, and a lot of students 

come through our motor sports shop. I think you have to show 

them something exciting, a real, tangible product. 

Mr. CHAFFETZ. Thank you. 

My time has expired. 

We will now recognize the gentlewoman from Texas, Ms. Jackson 

Lee, for 5 minutes. 

Ms. JACKSON LEE. Let me thank the Committee very much for 

this hearing. 

Let me just, across the board, ask Dr. Fulkerson, Dr. Atala, Dr. 

Smith, how many jobs can this kind of technology create in America. Just give me a wide range. And do you consider this kind of 

technology or technology, period, sort of the work generator of the 

21st century? 

Mr. FULKERSON. I think the easy answer is it is unbounded. I 

think as we become more and more an information society and we 

grow more and more information workers, all Americans at some 

level are potentially engaged in information work. I think we have 

specific numbers in my written testimony from the Business Software Alliance of exactly how many jobs in which type of industries. 

But I believe from a growth perspective, technology has been a 

54 

major driver of growth, obviously, in the last 30 years, but whether 

that is just pure information, computer technology, or any of the 

other—— 

Ms. JACKSON LEE. But jobs could grow every year. You can see 

jobs growing every year with technology inventions. 

Mr. FULKERSON. Oh, yes, ma’am. 

Ms. JACKSON LEE. Dr. Atala? 

Dr. ATALA. The same. In the field of regenerative medicine, basically you have an increasing number of technologies that are being 

used in terms of experimentally, a large number of companies 

which are currently formed for the field. And we do expect—as I 

had mentioned earlier, the current global market for this field is 

estimated to be in the vicinity of $118 billion just by 2013. 

Ms. JACKSON LEE. And you are an American-based company. So you are generating $118 billion that would impact creation of 

American jobs and investment in America. Is that correct? 

Dr. ATALA. Well, I am actually at the Wake Forest Institute for 

Regenerative Medicine which is a nonprofit part of Wake Forest 

University in Winston-Salem, North Carolina. 

Ms. JACKSON LEE. Right. I am aware of that, but out of that 

would come enormous amount of commercial or private sector jobs 

or investment. 

Dr. ATALA. That is right. One of the major benefits is to be able 

to keep these technologies here, keep the innovation here in the 

U.S., manufacture the technologies here, and create jobs here. 

Ms. JACKSON LEE. Thank you. I want to hear more, but my time 

is short. 

Dr. Smith, how many jobs do you think out of this kind of arena 

could one create in the 21st century? 

Mr. SMITH. Well, for the technologies that I showed, the number 

of jobs that were directly created are at the moment small. These 

are start-up companies. But because the technologies that I showed 

are directed specifically at productivity, the number of jobs that are 

created is quite large. 

There is a lot of talk about the manufacturing sector in the 

United States having trouble competing internationally with the 

wage difference. And I think that is the wrong question. I think the 

right question is given that there is a wage difference, how do you 

remain competitive, and I think the ways that you remain competitive are you innovate, you make things that other people can’t 

make, you improve your productivity. If you want to maintain a 

wage difference, you have to maintain a productivity difference. I 

think if we get it right, what would matter is proximity to market 

more than the cost of the labor. 

Ms. JACKSON LEE. We need to market what our best talents are. 

Let me ask my two questions so that you can be in the middle 

of answering if my time runs out. 

First of all, we all know as kids, when you heard a shriek on the 

playground, it was somebody saying you are not playing fair, or 

maybe when you heard a little rumble in the back yard somebody 

was not playing fair. I abhor an uneven playing field. I think it is 

just ludicrous. 

So I need you to tell me with your greatest passion, even though, 

Dr. Fulkerson, you said that is not your area, what Congress can 

55 

do to stop this piracy and this stealing of intellectual property. Just 

give it to us from your gut. 

Dr. Fulkerson, I just want to know can I learn Spanish, French, 

and anything else. How long will it take me on the Rosetta Stone? 

[Laughter.] 

Ms. JACKSON LEE. But my last point, Dr. Atala, if you could tell 

me whether or not you have got any partnerships or are working 

with any minority and women doctors, researchers, and scientists 

and cultivating any small businesses from the minority and 

women-owned business community. 

But if you could quickly go on what Congress can do to stop this. 

Mr. FULKERSON. We obviously have to continue enforcement of 

the folks who are actually doing the piracy. But I continue to believe that the single biggest thing we can do is make it harder to 

find the pirates. 

Ms. JACKSON LEE. Make it? 

Mr. FULKERSON. Make it harder for consumers to find the pirates. If a pawn shop was selling pirated goods, local police will 

shut that down. If an international search engine is making it easy 

to find pirated sites, there is no way to shut that down. They will 

cooperate at times, but it is just too easy for pirates to get into our 

living rooms, to get into our laptops, and sell us stuff. I believe in 

a free Internet, but there are things we need to do around trademark enforcement and protection to make that harder. 

Also, I would like to just add—I can get you the job number. The 

Business Software Alliance, of which we are a member—and we 

can provide you this information—estimates that in the U.S. over 

the next 2 years, we will create 282,000 jobs in information technology. 

Ms. JACKSON LEE. Excellent. 

Dr. Atala? 

Dr. ATALA. Yes. As part of the institute, we are proud to report 

that we have people that come with us from 23 different countries 

and many nationalities and many different minority groups. So 

that has been a good thing for us. 

When we do the clinical trials actually, we have to abide by all 

the regulations in terms of making sure that all patients also participate in the clinical trials. 

And when it comes to industry, of course, again we are not connected at that level with industry as part of my role at the institute, but when we do commercialize these technologies and we do 

bring these technologies to a commercial venue, we certainly make 

sure that all of the appropriate rules are followed in that direction. 

Ms. JACKSON LEE. Dr. Smith? Stop piracy. 

Mr. SMITH. Stop piracy. This is difficult. I mean, I think it is 

even difficult inside of the U.S. If you are a small company and you 

believe that you are being infringed, it is often difficult to prevail 

because you don’t have the funds that are required to last long 

enough in court. And I think overseas this is even a more complicated problem. 

In regard to your question about minorities, one of the most successful start-ups spun out of UNC Charlotte by my graduate student actually is a female-owned company. 

Ms. JACKSON LEE. Excellent. 

56 

Thank you, Mr. Chairman. I thank all of you. 

Mr. CHAFFETZ. Thank you. 

At this time, we are going to draw a conclusion to this hearing. 

We appreciate all the time, effort, and resources that you take to 

be here. We truly do appreciate your making time for the Committee and offering your expertise. And at this time, the Committee 

stands adjourned. 

Oh, yes. I would make a note for the record that all Members 

will have 5 legislative days to enter information into the record, 

and we also extend that to you. If you have additional comments 

or things that you would like to see inserted into the record, we 

allow for 5 additional days. 

And with that, I thank the witnesses and the Committee will 

stand adjourned. 

[Whereupon, at 12:48 p.m., the subcommittee was adjourned.] 

Æ