It was a packed house at the Library of Congress' Madison Building yesterday, and while I respect Pat Leahy and David Dreier, the crowd wasn't there to hear them speak. The draw was a different panelist -- Bill Gates was in town, slumping and rumpled as ever. A warning against flash photography was issued to the crowd before Gates came out, then they ushered the two dozen or so professional photographers to the front to snap pictures for a couple of minutes (they were the only ones getting to use a flash, and only in that brief period). I attended with Jim DeLong, and told him that at our next Congressional Seminar I would have the same procedure for photographs of him. I'm not sure if he found that amusing.

Beyond admiring the scene and marveling at the fact that the richest man in the world can't afford a suit that fits his small, lean frame, I thoroughly enjoyed myself. Gates had a lot of interesting things to say. I think my journalist friends were frustrated at the lack of "headline" quotes, but Gates said one thing that clearly resonated with me, and it dealt with, not surprisingly, intellectual property.

The debate involved, naturally, outsourcing and immigration, two hot-button issues that are bound to pop up in any Washington conversation about the high-technology field. Gates had made the completely logical argument that caps on H1-B visas make no sense, because there's no logic to keeping smart people out of the country. Dreier, who sees a justification for caps, tried to shift the argument to outsourcing, wondering if Microsoft might find itself down the road shifting its key operations abroad.

It's a legitimate question, and there likely are some cost savings involved. Gates wouldn't have to worry about H1-B visas, for example, because he could hire these workers in their own countries. Gates had already mentioned Microsoft research facilities in China and India. But he then said this, which I'm afraid is a close quote but may not be exact:

The United States is the market with the most respect for intellectual property rights. That's a good place for us to be, so that's why we'll continue to operate out of the U.S.

That's a pretty powerful endorsement of the role of IP in business decision-making. China's abysmal record on IP is well-known (although Gates said it's good they're in the WTO because it gives us a means to talk with them about IP). We've also seen, in the latest WIPO talks, that India is hostile to IP, despite the fact that some companies in India see the value of IP. Based on Gates' comment, it would seem those Indian companies should incorporate here. Of course, they might have some visa problems.