| House Passes Bush Tax Bill |
| 3/8. The House passed HR 3,
the Economic Growth and Tax Relief Act of 2001, President
Bush's proposal to reduce tax rates, by a vote of 230 to 198.
See, Roll
Call No. 45. |
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| SEC & the Internet |
3/8. The U.S. District Court (NDIll)
approved a settlement agreement in the SEC's civil
enforcement action against Yun Soo Oh Park, an Internet stock
picker known as Tokyo Joe, and the company that he
controls. Tokyo Joe and his company consented to entry of an
order that enjoins them from violating the antifraud and other
provisions of the federal securities laws, and orders them to
pay $324,934 in ill-gotten gains and $429,696 in civil
penalties. They also agreed to post a hyperlink to the court
order on the home page of their stock picking web site. The SEC had
charged Tokyo Joe and his company with defrauding subscribers
by failing to disclose that he purchased shares of the stock
that he was recommending and that he planned to sell his
shares when the price rose following his recommendations. The
SEC had also charged Tokyo Joe with illegal touting. The Court
had previously rejected Tokyo Joe's argument that he was not
an "investment advisor" within the meaning of the
Investment Advisors Act. Said SEC Enforcement Director Richard
Walker, "This case has established groundbreaking
precedent. Those who are in the business of offering
investment advice on the Internet may take on the same duties
and responsibilities as other investment advisers."
See, SEC
release.
3/2. Acting SEC Chairman
Laura Unger gave a speech
in Washington DC in which she addressed regulation of financial
portals. She stated that "Financial portals provide a
central location where investors can find all types of
financial information and portfolio analysis tools. They can
aggregate their financial account data, and they can also
click on hyperlinks to broker-dealer websites to open
brokerage accounts and enter trades. ... But as portals have
gained in popularity, with Yahoo! Finance and other financial
portals becoming household words, broker-dealers are
increasingly finding themselves competing with the financial
portals for customers. At least one of the questions
broker-dealers ask is why aren't the portals registered? My
first question, though, is: what are the portals doing?
What are their relationships with the broker-dealers they
hyperlink to? What are their business arrangements and
compensation arrangements? How do the hyperlinks work, and
what do they look like? We're all familiar with the various
factors considered in analyzing whether an entity must
register as a broker-dealer. But these are difficult questions
with broad-ranging implications. ... I'm in the process of
organizing a roundtable to discuss some of these issues in
April."
3/2. SEC Commissioner Isaac Hunt gave a speech
in Washington DC in which he suggested re-examination of the
subject of online communications made during a public
offering, especially during the waiting period. He stated
that the "Internet provides a mechanism that would allow
investors and companies to get together on a non-selective
basis to discuss a company's public offering. It is my hope
that the Commission will find a way to allow companies and
investors to take greater advantage of the Internet and thus
... transform the waiting period into the education
period." |
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| Judiciary Markup |
| 3/8. The House
Judiciary Committee approved several tech related bills at
a mark up session. HR 809,
a bill to make minor technical corrections to various antitrust
laws, was approved without debate or amendment. S 320,
a bill to make technical corrections in patent, copyright,
and trademark laws, was adopted quickly with a technical
amendment. HR 741
was also adopted. It amends the Trademark Act of 1946 to
implement the Madrid Protocol, an international
trademark treaty. The Protocol seeks to provide a one-stop
inexpensive method for trademark registration and protection. |
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| More IP News |
2/28. A panel of
the WIPO
Arbitration and Mediation Center issued its opinion
in a domain name dispute resolution proceeding
involving www.yahooasian.com and 4 other domain names which
include the word "yahoo." Yahoo!, the Santa Clara,
California, based Internet giant filed a complaint against the
Thai company formed in 2000 that registered the five
variations on its trademark. The panel found that the five
domain names are confusingly similar to the Yahoo! trademark,
that the respondent has no rights or legitimate interest in
the disputed domain name, and that the disputed domain names
were registered in bad faith. It ordered, therefore, that the
five domain names be transferred to Yahoo!
3/6. The European
Patent Office published in its web site PDF copies of 88
decisions of its Board of Patent Appeals from 2000 and
early 2001.
3/8. The U.S.
Court of Appeals (DC Cir) heard oral argument in Platte River
Cellular Limited Partnership v. FCC. |
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| New Documents |
Tauzin:
statement
re EU Privacy Directive, 3/8 (HTML, TLJ).
Hunt:
speech
re initial stock offerings and the Internet, 3/2 (HTML, SEC).
Unger: speech
re SEC regulation of financial portals, 3/2 (HTML, SEC). |
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| Quote of the Day |
"The EU Privacy Directive is the EU's
Helms-Burton."
Jonathan Winer, testimony at House Trade Subcommittee
hearing, March 8. |
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| EU Privacy Directive
Criticized at Hearing |
3/8. The House
Commerce Committee's Subcommittee on Commerce, Trade, and
Consumer Protection held a long hearing titled EU Data
Protection Directive: Implications for the U.S. Privacy Debate.
The event provided several subcommittee members and witnesses
the opportunity to criticize the EU Privacy Directive, as well
as the Safe Harbor.
Committee Chairman Billy
Tauzin (R-LA) was not present, but submitted a scathing
criticism of the EU Privacy Directive for the record. He
called it "an effort to impose the EU's will on the
U.S." It also "could be the imposition of one of the
largest trade barriers ever seen and is a direct reversal of
the efforts we have made in various free trade
agreements." Moreover, "the costs would be in the
multi-billions, and are all costs that will be passed on to
consumers." He also wrote that the Europeans do not
enforce it against themselves; "In fact, a number of
nations have not even bothered to ... enact implementing
legislation." He suggested that EU enforcement against
U.S. companies would therefore constitute a "double
standard." He also pointed out that the EU Privacy
Directive creates a private right of action. This, Tauzin
wrote, would infringe U.S. sovereignty, and subject U.S.
companies to financially crippling class action lawsuits.
Tauzin also criticized the Safe Harbor.
Subcommittee Chairman Cliff
Stearns (R-FL) presided. He stated that "I am
concerned about the potentially regressive impact of the
Directive ... on international commerce and more specifically
on commerce between the European Community and the United
States. I am not convinced ... that the safe harbor provisions
negotiated by Ambassador Aaron in the previous administration
will help mitigate the concern over regressive effects." Rep. Steve Buyer (R-IN)
attacked the EU for trying to set standards for the rest of
the world, and for opposing free trade. He also quipped that
he understands "the good judgment of my ancestors to
leave the continent." Two Democrats had kind words for
the EU Privacy Directive, Rep. Diana DeGette
(D-CO) and Rep. Ed
Markey (D-MA). However, Markey's comments were directed
mostly at the privacy provisions of the Gramm Leach Bliley
bill, which he called "a pathetic joke", the
Republican Party, for denying him floor votes on privacy
amendments, and corporate America, for violating privacy.
Two Europeans testified, Stefano Rodota (Chairman of the EU
Data Protection Working Party) and David Smith (Office of the
UK Information Commissioner). Smith often qualified his
remarks with the statement that he did not speak on behalf of
the EU. Rodota speaks English with difficulty. Moreover, the
two confused subcommittee members with contradictory or
non-responsive responses to questions about EU law and
procedure. See, Rodota
statement and Smith
statement.
Finally, the subcommittee heard from a panel of U.S. and
Canadian witnesses. Jonathan Winer, an attorney with the law
firm of Alston & Byrd,
condemned the EU Privacy Directive in his testimony;
"The stakes are not just protecting privacy, but
simultaneously protecting sovereignty, protecting
Constitutional freedoms, especially the freedom of expression,
and preventing the risk of serious harm to the U.S. and to the
global economy." Former Ambassador David Aaron read a statement
in which he said that "there are a number of fundamental
problems with the European Directive. First, it was conceived
over a dozen years ago when there was no World Wide Web
..." In contrast, Joel Reidenberg, a law professor at
Fordham University, praised the Directive. See, statement.
Barbara Lawler of Hewlitt Packard explained her company's
participation in the Safe Harbor. Denis Henry of Bell Canada
also testified. |
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| Computer Crime |
3/8. The FBI's NIPC
issued an advisory
and a release
regarding "a series of organized hacker activities
specifically targeting U.S. computer systems associated with
e-commerce or e-banking. Despite previous advisories, many
computer owners have not patched their systems, allowing these
kinds of attacks to continue ..." The advisory
states that "several organized hacker groups from Eastern
Europe, specifically Russia and the Ukraine ... have
penetrated U.S. e-commerce computer systems by exploiting
vulnerabilities in unpatched Microsoft Windows NT operating
systems." They download proprietary information, customer
databases, and credit card information, and then extort money
under the guise of providing security services. Microsoft also commented.
"One of the most troubling aspects of these attacks is
that virtually all of them were carried out via known
vulnerabilities for which patches have been available for
months or, in some cases, years," said Scott Culp,
Security Program Manager of the Microsoft Security Response
Center, in a Security Bulletin. See also, Microsoft companion
article.
3/6. Mark Dipadova and Theresa Ford plead guilty in U.S.
District Court (DSC)
to conspiracy to traffic in counterfeit watches and
other goods, in violation of 18 U.S.C. § 371. They
conducted their criminal operation through a website formerly
located at www.fakegifts.com. This case is being prosecuted by
AUSA
Dean Eichelberger. See, DOJ
release.
3/8. A grand jury of the U.S. District Court (EDCal)
returned an indictment against three individuals for wire
fraud and mail fraud for operating a fraudulent bidding
ring on the eBay auction web site. The indictment alleges
that the defendants created more than 40 User IDs on eBay
using false registration information, and then used those
aliases to place fraudulent bids to artificially inflate the
prices of hundreds of paintings they auctioned on eBay. The
case is being prosecuted by AUSAs
Christopher Sonderby and Michael Malecek. See, DOJ
release.
3/7. Jesus Oquendo was convicted in U.S. District Court (SDNY)
of illegal computer intrusion and electronic eavesdropping.
He is a former computer security specialist whose hacking
began with access to the offices of his first victim. See, DOJ
release. |
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| More News |
3/8. The House
Commerce Committee's Subcommittee on Telecommunications
and the Internet held an information gathering hearing titled Technology
and Education: A Review of Federal, State, and Private Sector
Programs. See, witness statements: Kate
Moore (USAC), David
Spencer (Michigan Virtual Univ.), Dan
Domenech (Fairfax County Pub. Sch.), Dale
McDonald (Nat. Cath. Educ. Assoc.), Judith
McHale (Discovery Comms.), Hal
Krisbergh (WorldGate Comms.), Rae
Grad (PowerUP), Jennifer
House (Classroom Connect), Emlyn
Koster (Liberty Science Center).
3/8. EU Trade Commissioner Pascal Lamy gave a speech
in Washington DC on EU US trade disputes. |
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| Copyright Law & Online Education |
3/7. Sen. Orrin Hatch
(R-UT) and Sen. Patrick
Leahy (D-VT) introduced S 487, the Technology
Education and Copyright Harmonization Act -- TEACH Act. This
bill would amend § 110(2)
of the Copyright Act to expand the educational use
exemption in the copyright law to include online distance
learning.
3/7. Sen. Hatch stated in the Senate that "copyright law
contains a number of exemptions to copyright owners' rights
relating to face-to-face classroom teaching and instructional
broadcasts. While these exemptions embody the policy that
certain uses of copyrighted works for instructional purposes
should be exempt from copyright control, the current
exemptions were not drafted with online, interactive digital
technologies in mind. As a result, the Copyright Office
concluded that the current exemptions related to instructional
purposes are probably inapplicable to most advanced digital
delivery systems ..." He added that "the primary
goal of this legislation is ... to promote digital distance
learning by permitting certain limited instructional
activities to take place without running afoul of the rights
of copyright owners."
3/7. Sen. Leahy stated in the Senate that S 487
"makes three significant expansions in the distance
learning exemption in our copyright law ... First, the bill
eliminates the current eligibility requirements for the
distance learning exemption that the instruction occur in a
physical classroom or that special circumstances prevent the
attendance of students in the classroom. Second, the bill
clarifies that the distance learning exemption covers the
temporary copies necessarily made in networked servers in the
course of transmitting material over the Internet. Third, the
current distance learning exemption only permits the
transmission of the performance of 'non-dramatic literary or
musical works,' but does not allow the transmission of movies
or videotapes, or the performance of plays." |
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| Tech Education Bills |
3/7. Rep. Mark
Udall (D-CO) introduced HR 932, the Science Teacher
Scholarships for Scientists and Engineers Act, a bill to
provide scholarships for scientists and engineers to become
certified as science, mathematics, and technology teachers in
elementary and secondary schools. It was referred to the House Science Committee.
See, release.
3/7. Sen. Mike Crapo
(R-ID) introduced S 473, a bill to amend the Elementary
and Secondary Education Act of 1965 to improve training for
teachers in the use of technology. It was referred to the
Senate Committee on Health, Education, Labor, and Pensions.
3/7. Sen. Pat Roberts
(R-KS) introduced S 478, a bill to establish and expand
programs relating to engineering, science, technology and
mathematics education. It was referred to the Committee on
Health, Education, Labor, and Pensions. He stated that
"the American educational system is not producing enough
students with specialized skills in engineering, science,
technology, and math ... As a result of this shortage of
skilled workers, Congress had to increase the number of H-1B
visas by almost 300,000 from fiscal year 2000 to fiscal year
2002." He also stated that this is a national security
issue. "We don't have the people to do the job to protect
our country in regard to cyber threats ..." |
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| Today |
10:00 AM. The USTR will
conduct a hearing regarding software and music piracy in
Russia and Brazil. It will conduct a hearing on the two
countries' eligibility for duty free status under the
Generalized System of Preferences (GSP). Pursuant to The Trade
Act of 1974, the GSP program grants duty-free
treatment to designated eligible articles that are imported
from designated beneficiary developing countries, including
the Russian Federation and Brazil. The IIPA
filed petitions on Aug. 21, 2000, requesting that the duty
free status of these countries be withdrawn. See, petition
re Russia [PDF] and petition
re Brazil [PDF]. On Jan. 10, 2001, the USTR published a Notice
in the Federal Register regarding this hearing. See, Vol. 66,
No. 7, at Pages 2034 - 2035. Location: Office of the U.S.
Trade Representative, 1724 F Street, NW, Washington DC.
12:00 NOON. FTC Commissioner Thomas Leary will deliver the
keynote address at the 37th Annual Symposium on Associations
and Antitrust, sponsored by the Antitrust and Association Law
Committee of the Bar Association of the District of Columbia.
Location: Hilton Washington & Towers, 1919 Connecticut
Avenue, NW, Washington DC.
Deadline to file reply comments with the FCC in response
to its notice
of proposed rulemaking (NPRM) regarding reallocation of
spectrum for use by Third Generation (3G) wireless services.
3G is intended to provide broadband Internet access to
portable devices. See, Federal Register, Jan. 23, 2001, Vol.
66, No. 15, Pages 7438 - 7443. ET Docket No. 00-258.
10:00 AM. The NTIA
will release a report titled Assessment of Compatibility
between Ultrawideband (UWB) Systems and Global Positioning
Systems (GPS) Receivers. |
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| About Tech Law Journal |
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legislation, litigation, and regulation affecting the computer
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