| Cal App Rules No
Jurisdiction Over Out of State Poster to Yahoo Message Board |
11/26. The Court
of Appeal of California (2/4) issued its opinion
[PDF] in Nam
Tai Electronics v. Joe Titzer, a case regarding
personal jurisdiction over persons who publish allegedly
defamatory statements in Internet message boards. The Appeals
Court affirmed the trial court's order quashing service and
dismissing the complaint.
Parties. Nam Tai
Electronics makes consumer electronic products. Its stock
is traded on the NASDAQ [ticker: NTAI]. It is incorporated in
the British Virgin Islands, and based in Hong Kong. Joe Titzer
is an individual who anonymously published statements about
Nam Tai stock on a Yahoo message board. He is a resident of
Colorado. Yahoo is a California corporation.
Procedure. Nam Tai filed a complaint in California
Superior Court alleging libel, trade libel, and violations of
the California Business and Professions Code, Section 17200,
against the unknown author of the Yahoo message board
statements. Nam Tai subsequently obtained the identity of the
anonymous poster (Titzer) from Yahoo pursuant to a subpoena,
and amended its complaint. Titzer moved to quash service of
process and dismiss the complaint on the grounds that, as a
resident of Colorado, the California court lacked jurisdiction
over him. The trial court quashed service and dismissed the
complaint. Nam Tai filed this appeal.
Court of Appeal Holding. The Court of Appeal, relying
heavily on Jewish Defense Organization v. Superior Court,
72 Cal.App.4th 1045 (1999), affirmed the trial court. It wrote
that "The issue is not whether the company that makes the
Web sites available is incorporated or based in California. As
the courts recognize, an Internet company of Yahoo!'s type may
be based anywhere in the world. The determinative question is
whether the Web sites themselves are of particular
significance to California or Californians such that the user
has reason to know the posting of a message will have
significant impact in this state. Although we presume
respondent's messages were available to Californians or anyone
else with access to the Internet, appellant presented no
evidence to suggest that respondent's messages or the Web
sites on which they were posted were directed at Californians
or disproportionately likely to be read by residents of this
state. Alternatively, appellant presented no evidence to
suggest that its relationships with residents of California
were of particular importance to its business and likely to be
impacted negatively by the messages posted on the Web
sites."
Choice of Forum Clause. The Appeals Court also rejected
Nam Tai's argument that the choice of forum clause in Yahoo's
terms of service (TOS) provided jurisdiction in California.
The TOS state that the relationship between Yahoo and its
subscribers "shall be governed by the laws of the State
of California without regard to its conflict of law
provisions". The Court reasoned that while choice of
forum clauses are enforceable, they must be unambiguous, and
in this case, the TOS do not unambiguously state that disputes
between Yahoo's subscribers and third parties are covered by
the clause. |
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| District Court Denies
Preliminary Injunction in SunGard Case |
11/21. The U.S.
District Court (DDC) issued its Redacted
Memorandum Opinion [PDF] in USA
v. SunGard Data Systems, denying the
government's motion for preliminary injunction.
On October 22, the Department
of Justice (DOJ) filed a civil complaint in U.S. District
Court (DDC) against SunGard
and Comdisco seeking to
block SunGard's purchase of Comdisco's Availability Solutions
(AS) business for $825 Million. See, DOJ
release. AS provides disaster protection and relief to
keep computer systems accessible in disasters and other
disruptions. Only July 16, Comdisco filed a Chapter 11
bankruptcy petition in U.S. Bankruptcy Court (NDIll).
The Bankruptcy Court ordered that the relevant Comdisco assets
be sold at an auction. SunGard offered the highest of two bids
at an October 11 auction -- $825 Million. See, October 12 Comdisco
release.
The DOJ also sought a preliminary injunction, arguing that the
acquisition would substantially lessen competition in the
market for shared hotsite disaster recovery services for
mainframe and midrange computers, in violation of the Clayton
Act.
The District Court denied the request for an injunction. It
concluded that "In light of the decreasing costs of
equipment and telecommunications and the rapidly evolving
computer technology, the Court cannot accept the government's
overly narrow and static definition of the product market. The
defendants' customers, as well as their computer systems, are
simply too varied and too dissimilar to support any
generalizations. Therefore, the central premise of the
government's case – that there are ``a substantial number of
customers for whom there are no competitive alternatives´´
... has not been proven." (Citation omitted.)
The original opinion was dated November 14; the public
redacted version was released on November 21. |
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| Supreme Court Denies Cert
in Tereschouk v. USPTO |
| 11/26. The Supreme
Court denied certiorari in Tereschouk
v. USPTO, thereby letting stand the April 4,
2001, opinion
of the U.S. Court of Appeals
(FedCir). The Court of Appeals affirmed a decision of the
U.S. Patent and Trademark Office's Board of Patent Appeals and
Interferences that sustained rejection of all of the claims of
Tereschouk's patent application No. 08/490,903.
Tereschouk petitioned for writ of certiorari. The Supreme
Court denied the petition, without opinion. See, November 26 Order
List [PDF] at page 7. |
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| Computer Criminals
Sentenced |
| 11/26. Geoffrey Osowski and Wilson Tang were
each sentenced in U.S.
District Court (NDCal) to serve 34 months in prison. Both
plead guilty on August 20, 2001, to one count of computer
fraud in violation of 18 U.S.C. § 1030(a)(4). The two
exceeded their authorized access to the computer systems of Cisco Systems in order to
illegally issue almost $8 million in Cisco stock to
themselves. See, Osowski
Plea Agreement [PDF], Tang
Plea Agreement [PDF], and USAO
release. |
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| 7th Circuit Reverses in
Level 3 Insurance Case |
| 11/26. The U.S.
Court of Appeals (7thCir) issued its opinion
in Level
3 Communications v. Federal Insurance, a
diversity suit involving application of a policy of directors'
and officers' liability insurance to shareholder securities
fraud law suits. Reversed and remanded. |
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| Supreme Court Denies Cert
in NAFTA Challenge |
11/26. The Supreme
Court denied certiorari in United
Steel Workers of America v. U.S., thereby
letting stand the February 27, 2001, opinion
of the U.S. Court of
Appeals (11thCir) which invoked the political question
doctrine to reject a challenge to the constitutionality of the
North America Free Trade Agreement (NAFTA).
The United Steel Workers of
America (USWA) filed a complaint in the U.S. District Court (NDAla)
against the United States alleging that the NAFTA should be
declared unconstitutional on the grounds that it was not
ratified as a treaty by a two thirds vote in Senate. The
Clinton administration and the Congress treated the NAFTA as
an executive agreement not requiring Senate ratification as a
treaty, and implemented it by passing legislation by simple
majorities in the House and Senate.
The Appeals Court wrote in February that "We nonetheless
decline to reach the merits of this particular case, finding
that with respect to international commercial agreements such
as NAFTA, the question of just what constitutes a
"treaty" requiring Senate ratification presents a
nonjusticiable political question."
The USWA petitioned for writ of certiorari. The Supreme Court
denied the petition, without opinion. See, November 26 Order
List [PDF] at page 2. |
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| Federal Jurisdiction in
Contract Disputes Involving IPR |
11/26. The U.S.
Court of Appeals (7thCir) issued its opinion
in International Armor
v. Moloney Coachbuilders, a appeal from a case
plead as a Lanham Act claim. The Appeals Court applied the
"arising under" clause of Article III of the
Constitution, and the artful pleading doctrine, to rule that
the federal judiciary lacks jurisdiction in this case.
The Appeals Court concluded that the dispute was a contract
dispute between citizens of the same state. The contract at
issue concerned ownership of trademarks. Judge Easterbrook,
writing for a three judge panel, wrote that intellectual
property rights (IPR) in the form of patents, copyright and
trademarks exist because of federal law. However, when parties
enter into contracts regarding ownership of IPR, and then
dispute the effect of those contracts, the disputes are claims
arising under state contract law, not claims arising under
federal IP law. The Appeals Court vacated the judgment of the
District Court, and remanded with instructions to dismiss for
lack of subject matter jurisdiction. |
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| NTIA Chief Addresses
Spectrum Issues |
11/26. NTIA
chief Nancy Victory gave a speech
to the Latin American Wireless Industry Association (ALACEL)
titled "The Politics of Telecommunications in Times of
Crisis". She addressed the proposed Free Trade of the
Americas Agreement (FTAA), government management of spectrum,
the status of spectrum allocation for Third Generation (3G)
wireless services, and the multitude of U.S. governmental
bodies involved in international spectrum policy making.
Spectrum Management. She stated that certain basic
principles regarding spectrum management have become apparent.
"First, spectrum policy must recognize that it is not
practical to try to anticipate consumer demand or
technological development -- policies should be flexible to
allow service growth and evolution."
"Second, spectrum policy must recognize the
practicalities of running a business - certainty and
predictability of regulation is essential to a company's
ability to grow and succeed. The continued development of
wireless services in the region requires that additional
spectrum be offered in a non-discriminatory, transparent
manner in order to secure further and sustained
investment."
"Third, spectrum policy must recognize the practicality
of limited government resources that cannot respond as quickly
as the market - policies and requirements that are not
necessary should not be imposed or should be eliminated if
they exist."
"And finally, spectrum policy must recognize the
practicalities of current spectrum use and the difficulties of
changing the hand that we've been dealt," said Victory.
3G Wirless. She reiterated that the NTIA, Department of
Defense, FCC, and others, are conducting an assessment of the
viability of making certain identified spectrum available for
3G services. She said that this assessment will focus on the
1710-1770 and 2110-2170 MHz bands by NTIA and the FCC,
respectively. She said that "We expect to complete this
assessment by the late spring of 2002."
She also stated that "the need to harmonize our decisions
within the region is a key component of our domestic
discussions." |
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| Tuesday, Nov 27 |
The Senate will reconvene from its Thanksgiving recess at
10:30 AM.
The House will reconvene at 2:00 PM. There will be no votes
before 6:30 PM. The House will consider many items under
suspension of the rules (no amendments and 2/3 majority
required for passage). The agenda includes HR
1259, the Computer Security Enhancement Act, and HR
3189, the Export Extension Act, a bill sponsored by Rep.
Henry Hyde (R-IL) to extend the Export Administration Act
until April 20, 2002.
9:30 AM. There will be a hearing before the U.S.
District Court (DMD) in In re Microsoft Corp. Antitrust
Litigation, Multi District Litigation No. 1332. This is a
hearing on Settlement
Agreement, which proposes a settlement of the private
antitrust class action lawsuits against Microsoft alleging
that it overpriced its products. Location: Courtroom 1A, first
floor, U.S. District Court, Baltimore, MD.
8:30 AM - 5:00 PM. The North American Numbering Council will
meet. Location: FCC, Room TW-C305 (Commission Meeting Room),
445 12th Street, SW.
1:30 PM. The U.S. International Telecommunication Advisory
Committee (ITAC) will hold a meeting. See, notice
in Federal Register. Location: State Dept.
6:00 - 8:15 PM. The Federal
Communications Bar Association (FCBA) will host as CLE
seminar titled "The Economics of FCC Decisionmaking."
From 6:00 to 7:00 PM David Sappington (FCC Chief Economist)
will speak on "Economic Principles of Telecommunications
Regulation." From 7:15 to 8:15 PM there will be a panel
discussion titled "Economists Roundtable: Of Caps,
Limits, and the Free Market." The speakers will be Robert
Pepper (Chief of the FCC's Office of Plans and Policy), Jim
Bird (head of the FCC's antitrust merger review office), Walt
Strack (Chief Economist in the FCC's Wireless Bureau), and
Jonathan Levy (Deputy Chief of the FCC's Office of Plans and
Policy). RSVP to wendy@fcba.org.
Location: Dow Lohnes &
Albertson, 1200 New Hampshire Ave., NW, Suite 800. |
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| Wednesday, Nov 28 |
8:30 AM - 12:00 NOON. The North American Numbering Council
will meet. Location: FCC, Room TW-C305 (Commission Meeting
Room), 445 12th Street, SW, Washington DC.
10:00 AM. The Supreme
Court of the United States will hear oral argument in
Ashcroft v. ACLU, No. 00-1293. This case involves the
constitutionality of the 1998 Child Online Protection Act
which makes it illegal to provide to minors over the web
material that is harmful to minors.
10:00 AM. The Senate
Judiciary Committee will hold a hearing titled "DOJ
Oversight: Preserving Our Freedoms While Defending Against
Terrorism". Sen.
Patrick Leahy (D-VT) will preside. Location: Room 226,
Dirksen Building.
12:00 PM. Exostar will
host a press luncheon. For more info, contact Karen Halligan
at 703 793-7715. Location: Lisagor Room, National Press Club, 529 14th
St. NW, 13th Floor.
12:30 PM. Mitch Daniels, Director of the Office of Management and
Budget (OMB), will speak at a luncheon. Location:
Ballroom, National Press Club,
529 14th St. NW, 13th Floor. |
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| Thursday, Nov 29 |
8:00 AM - 5:00 PM. Day one of a two day meeting of the National Science Foundation's
Advisory Committee for Cyber Infrastructure. See, notice
in Federal Register. Location: Room 1150, National Science
Foundation, 4201 Wilson Boulevard, Arlington, VA.
10:00 AM. The Senate
Judiciary Committee is scheduled to hold an executive
business meeting. Location: Room 226, Dirksen Building.
10:00 AM. The House
Government Reform Committee's Subcommittee on National
Security, Veterans Affairs, and International Relations will
hold a hearing titled "Risk Communication: National
Security and Public Health". Location: Room 2154, Rayburn
Building.
12:00 NOON - 2:00 PM. Jane Mago,
General Counsel of the FCC, will speak at a brown bag lunch
hosted by the District of Columbia Bar Association and the FCBA. To
register, contact the DC Bar at 202 626-3463.
12:15 PM. The FCBA's
International Committee will host a brown bag lunch. Jeanette
Chan and Michael Reede of the Hong Kong office of Paul Weiss
will speak on recent regulatory developments in Hong Kong,
China and India. Location: Paul Weiss, 1615 L Street, 13th
floor.
2:00 PM? The U.S. International Telecommunication Advisory
Committee (ITAC) will hold a meeting regarding preparations
for the 2002 World Telecommunication Development Conference (WTDC).
See, notice
in Federal Register. Location: State Department, Room 1408.
Deadline Extended. Deadline
to submit comments and Notices of Intention to Participate
with the Copyright
Office (CO) regarding royalty payments for retransmission
of over the air broadcast signals. The CO notice
"directs all claimants to royalty fees collected under
the section 119 statutory license in 2000 to submit comments
as to whether a Phase I or Phase II controversy exists as to
the distribution of those fees, and a Notice of Intention to
Participate in a royalty distribution proceeding." |
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| Friday, Nov 30 |
8:00 AM - 5:00 PM. Day two of a two day meeting of the
National Science Foundation's Advisory Committee for Cyber
Infrastructure. See, notice
in Federal Register. Location: Room 1150, National Science
Foundation, 4201 Wilson Boulevard, Arlington, VA.
10:00 AM - 12:00 NOON. The American
Enterprise Institute (AEI) will host a panel discussion
titled "The PCS C Block Mess: The FCC as Auctioneer and
Banker". The panelists will be Robert Hahn (AEI
Brookings), Rudy Baca (Precursor Group), Harold Furchtgott-
Roth (AEI), George Reed- Dellinger (Washington Analysis), John
Thorne (Verizon), and Thomas Hazlett (AEI). See, online registration
page. Location: AEI, Wohlstetter Conference Center,
Twelfth Floor, 1150 17th Street, NW.
Deadline to submit comments to the Federal Trade Commission (FTC)
in its a notice of proposed rulemaking (NPRM) regarding
extending its Children's Online Privacy Protection Rule.
It proposes to extend the time period during which web site
operators may use an e-mail message from the parent, coupled
with additional steps, to obtain verifiable parent consent for
the collection of personal information from children for
internal use by the web site operator. The current rule
expires on April 21, 2002. The FTC proposes to extend this
until April 21, 2004. See, FTC release,
and notice.
Deadline to submit comments to the Bureau of Export Administration
(BXA) regarding its annual review of the foreign policy based
export controls in the Export Administration Regulations to
determine whether they should be modified, rescinded, or
extended. See, for example, Export Administration Regulations
(EAR), Section 742.12, pertaining to high performance
computers. See, BXA
notice. |
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