Tech Law Journal Daily E-Mail Alert
December 6, 2001, 9:00 AM ET, Alert No. 322.
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Domain Name Registrants Who Lose Before UDRP Panel May Sue Under ACPA
12/5. The U.S. Court of Appeals (1stCir) issued its opinion in Sallen v. Corinthians, a case regarding whether domain name registrants who have lost in a World Intellectual Property Organization (WIPO) adjudicated Uniform Domain Name Dispute Resolution Policy (UDRP) proceeding may bring an action in U.S. District Court pursuant to § 1114(2)(D)(v) of the Anticybersquatting Consumer Protection Act (ACPA) seeking to reverse the result of the WIPO proceeding by having their status as a nonviolator of the ACPA declared and by obtaining an injunction requiring the transfer of the domain name back to them. The District Court had held that it lacked jurisdiction over such claims brought under the ACPA. The Appeals Court reversed. It held that registrants who lose before a UDRP panel may sue under the ACPA to have the domain names transferred back to them.
Sallen. The appellee, Jay Sallen, is an individual who resides in Brookline, Massachusetts. He registered the domain name corinthians.com in 1998. He then tried to sell it to the Brazilian soccer team "Corinthians".
Corinthians. The appellant, Corinthians Licenciamentos, is a Brazilian corporation, and the exclusive licensee of the intellectual property owned by Sport Club Corinthians Paulista, which owns the popular Brazilian soccer team knows as the Corinthians, and holds a trademark for Corinthiao, which is Portuguese for Corinthians.
WIPO UDRP Proceding. Corinthians Licenciamentos filed a complaint on May 18, 2000 with the WIPO pursuant to its Uniform Domain Name Dispute Resolution Policy (UDRP). On July 17, 2000, the dispute resolution panel issued its decision in favor of Corinthians. It held that the domain name is confusingly similar to the registered trademark of the soccer club, that Sallen had registered the domain in bad faith (for the sole purpose of selling it back to the soccer team), and that Sallen had not made use of the domain name. It ordered that the domain name be transferred. The domain name has been transferred to the soccer club. Corinthians never sued Sallen under the ACPA.
U.S. District Court. After losing before the UDRP panel, Sallen filed a complaint in the U.S. District Court (DMass) against Corinthians seeking declaratory judgment that his registration and use of corinthians.com was not unlawful under the ACPA. The District Court held that it had no jurisdiction, and dismissed.
ACPA. Congress passed the Anticybersquatting Consumer Protection Act (ACPA) in the 106th Congress. It amends the Trademark Act of 1946. 15 U.S.C. § 1114(2)(D)(v) provides that: "A domain name registrant whose domain name has been suspended, disabled, or transferred under a policy described under clause (ii)(II) may, upon notice to the mark owner, file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under this chapter. The court may grant injunctive relief to the domain name registrant, including the reactivation of the domain name or transfer of the domain name to the domain name registrant."
Appeals Court. The First Circuit reversed. It held that the ACPA "grants domain name registrants who have lost domain names under administrative panel decisions applying the UDRP an affirmative cause of action in federal court for a declaration of nonviolation of the ACPA and for the return of the wrongfully transferred domain names."
People and Appointments
12/5. President Bush announced his intent to nominate Kathie Olsen to be Associate Director of the Office of Science and Technology Policy. She has been Chief Scientist at NASA since May, 1999, and Acting Associate Administrator for the Office of Biological and Physical Research since July, 2000. She also worked at the National Science Foundation. See, White House release.
12/5. President Bush nominated Randal Quarles to be a Deputy Under Secretary of the Treasury.
12/5. AOL Time Warner announced that Gerald Levin will retire as CEO in May 2002. It further stated in its release that "Richard Parsons, Co-Chief Operating Officer, will become Chief Executive Officer of the Company, and Robert Pittman, now Co-Chief Operating Officer with Mr. Parsons, will become the sole Chief Operating Officer. Steve Case will continue to have an active role as Chairman ..." (Emphasis added.)
12/5. Verizon named Shaygan Kheradpir its new Chief Information Officer. He will replace Joseph Castellano, who will retire on December 31. Kheradpir is currently President of Verizon's e-business unit. See, release.
More News
12/5. The Supreme Court of the United States heard oral argument in Verizon Maryland v. Public Service Commission of Maryland, a case regarding Eleventh Amendment immunity and federal court review of state public utility commission orders. (Nos. 00-1531 and 00-1711.)
12/5. The Senate Commerce Committee's Subcommittee on Science, Technology, and Space held a hearing on the technology sector in times of crises. See, prepared testimony of witnesses: John Marburger (Office of Science & Technology Policy), Craig McCaw (Eagle River, Inc.), Will Pelgrin (Governor's Office for Technology, State of New York), Roger Cochetti (Verisign), Julie Coppernoll (Intel), Timothy Graham (WinStar), and Stephen Rohleder (Accenture).
12/4. Rep. Jane Harman (D-CA) and others introduced HR 3397, a bill to provide for the expedited and increased assignment of spectrum for public safety purposes. It was referred to the House Commerce Committee.
Trade Promotion Authority Vote Today
12/6. The House is scheduled to debate and vote on HR 3005, the Bipartisan Trade Promotion Authority Act of 2001 on Thursday, December 6. This bill would give the President fast track trade negotiating authority. The House Rules Committee adopted a closed rule late on Wednesday, December 5, for consideration of the bill. The rule provides for consideration of a manager's amendment [PDF], which includes numerous additional provisions, including language pertaining to labor rights, trade in textiles, and agriculture.
Cal App Rules on Liability of Officers and Directors in Securities Fraud Cases
12/5. The California Court of Appeal (6) issued its opinion [PDF] in Kamen v. Lindly, a class action suit alleging securities fraud under California Corporations Code Sections 25400 and 25500. The Court of Appeal held that for corporate officers and directors to be liable, they must both sell and/or offer to sell or buy and/or offer to buy, and make misleading statements for the purpose of inducing the purchase or sale of a security.
Sonic Blue. S3, a publicly traded corporation based in Santa Clara, California, makes the Rio digital audio player, and other digital media, entertainment and consumer electronics products. In 2000 S3 changed its name to Sonic Blue. At relevant times, Dale Lindly was S3's Corporate Comptroller and then Chief Financial Officer.
Complaint. In 1997 investors who brought S3 stock filed a class action complaint in the Superior Court for Santa Clara County against S3, various of its directors and officers, and an accounting firm, alleging violation of California Corporations Code Sections 25400 and 25500. The complaint alleges that officers and directors and the accounting firm made materially false financial statements that overstated revenues, and materially false and misleading statements about operations, products, future business prospects. Lindly, another officer, and the accounting firm, did not sell any S3 securities at relevant times.
Section 25400. This section provides, in part, that "It is unlawful for any person, directly or indirectly, in this state: ... If such person is a ... person selling or offering for sale or purchasing or offering to purchase the security, to make, for the purpose of inducing the purchase or sale of such security by others, any statement which was, at the time and in the light of the circumstances under which it was made, false or misleading with respect to any material fact, or which omitted to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, and which he knew or had reasonable ground to believe was so false or misleading."
Section 25500. This section, in turn, provides that "Any person who willfully participates in any act or transaction in violation of Section 25400 shall be liable to any other person who purchases or sells any security at a price which was affected by such act or transaction for the damages sustained by the latter as a result of such act or transaction."
Trial Court. The Superior Court sustained the demurrer of  Lindly and others, on the grounds that, while the complaint alleged that they made materially false statements, it did not allege that they also sold stock.
Appeals Court. The Court of Appeal affirmed. It reasoned that 25400 prohibits market manipulation, and that 25500 creates a private right of action for violations of 25400. It continued that the requirement of 25500 that a person "willfully participates" means that "civil liability pursuant to section 25500 applies only to a defendant who is either a person selling or offering to sell or buying or offering to buy a security."
FTC Reports on E-Game Industry Advertising
12/5. The Federal Trade Commission (FTC) released a follow up report [5.1 MB in PDF] to its September 2000 report. It is titled "Marketing Violent Entertainment to Children: A Review of Self Regulation and Industry Practices in the Motion Picture, Music Recording & Electronic Game Industries".
The report states that the electronic game and movie industries have "made commendable progress in limiting their advertising to children of R-rated movies and M-rated games and in providing rating information in advertising." However, the report is critical of the music industry. The report states that "it has continued to advertise explicit content recordings in most popular teen venues in all media ..." See also, FTC release and concurring statement of FTC Commissioner Orson Swindle.
This report was prepared at the request of members of the Senate Commerce Committee. Members of the House Commerce Committee were quick to criticize the music industry. See, response of Rep. Billy Tauzin (R-LA) and Rep. Fred Upton (R-MI). Hillary Rosen, CEO of the RIAA, issued a statement in which she defended her members.
Correction
The December 4, 2001, issue of the TLJ Daily E-Mail Alert (No. 320) contained a story about the U.S. Court of Appeals (1stCir) opinion in Summit Packaging v. Kenyon & Kenyon. The hyperlink to the case was incorrect. See, correct link.
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Thursday, Dec 6
The House is scheduled to debate and vote on HR 3005, the Bipartisan Trade Promotion Authority Act of 2001.
9:00 AM - 5:00 PM. Day one of a two day conference hosted by the NTIA regarding its grant program named "Technology Opportunities Program", or TOP. See, agenda. NTIA officials and grant recipients will speak on the first day. The second day will focus on how to write TOP grant applications. The price to attend is $65. Location: Renaissance Hotel, 999 Ninth Street NW.
9:00 AM - 9:45 AM. Bernadette Rivera (Assoc. Admin. of the NTIA), Nancy Victory (head of the NTIA), and Stephen Downs (Director of the TOP Grant program) will speak at the NTIA's conference on TOP grants.
9:00 AM - 5:00 PM. Day three of a three day meeting of NIST's Computer System Security and Privacy Advisory Board (CSSPAB). See, notice in Federal Register. Preregistration is required to attend; to register, contact Elaine Frye by November 30, 2001, at elaine.frye@nist.gov or 301 975-2819. Location: NIST, Administration Building, Lecture Room B, in Gaithersburg, MD.
9:00 AM - 12:00 NOON. Day two of a two day open business meeting of the U.S. National Commission on Libraries and Information Science. See, notice in Federal Register. Location: Conference Room, NCLIS Office, 1110 Vermont Avenue, NW, Suite 820.
9:30 AM. The The U.S. Court of Appeals for the District of Columbia Circuit will hear oral argument in Channel 32 Hispanic v. FCC, No. 00-1527. Judges Edwards, Henderson and Garland will preside. Location: 333 Constitution Ave., NW.

10:00 AM. The House Judiciary Committee's Subcommittee on Commercial and Administrative Law and Subcommittee on Courts, the Internet, and Intellectual Property will hold a joint hearing on the proposed settlement agreement between NextWave, the FCC, the DOJ, and the Auction 35 winning bidders. Location: Room 2141, Rayburn Building.

10:00 AM. The Senate Judiciary Committee will hold another hearing in its ongoing series of hearings titled "DOJ Oversight: Preserving Our Freedoms While Defending Against Terrorism." These hearings began on December 28. Attorney General John Ashcroft is scheduled to testify. Sen. Patrick Leahy (D-VT) will preside. Location: Room 106, Dirksen Building.
11:00 AM. The House Science Committee will meet to mark up HR 3400, the Networking and Information Technology Research Advancement Act, sponsored by Rep. Sherwood Boehlert (R-NY), and HR 3394, the Cyber Security Research and Development Act, sponsored by Rep. Nick Smith (R-MI). Location: Room 2318, Rayburn Building.
11:00 AM. George Washington University's Democracy Online Project will host press conference. Location: National Press Club, 529 14th St., NW, 13th Floor.
12:00 NOON - 4:00 PM. George Washington University's Democracy Online Project will host a debate titled "Privacy & Online Politics: Is online profiling doing more harm than good for citizens in our political system?" The scheduled participants include Scott Harshbarger (Common Cause), Jeffrey Eisenach (Progress & Freedom Foundation), and Marvin Kalb. RSVP to dop@gwu.edu or 202 994-3219. Location: Holeman Lounge, National Press Club, 529 14th St., NW, 13th Floor.
12:15 PM. The FCBA's Online Communications Practice Committee will host a brown bag lunch. Tod Cohen, Washington Counsel and Director of Governmental Affairs for Ebay, will give an address titled "Broadband, When?" RSVP to Diane Raley. Location: Covington & Burling, 1201 Pennsylvania Avenue, NW, 11th Floor.
12:30 PM. The FCBA's FCC Enforcement Committee will host a brown bag lunch. The speaker will be David Solomon of the FCC's Enforcement Bureau. Location: Wiley Rein & Fielding, 1750 K Street, NW, 10th Floor.
The Bureau of Export Administration will host a course titled "Essentials of Export Controls". The price to attend is $100. For more information, contact Douglas Bell at 202 482-2642. Location: Ronald Reagan International Trade Center.
6:30 ­ 7:30 PM. There will be a panel discussion on Cyber Security. The speakers will be Richard Forno (CTO of Shadowlogic), Mark Rasch (CEO of Predictive Systems), Amit Yoran (CEO of Riptech), and Declan McCullagh (Wired News). In addition, Richard Clarke (Office of Homeland Security) has been invited. A reception will follow. The event is free for National Press Club members, and $10 for others. For reservations, contact 202 662-7501 or pnelson @press.org. Location: National Press Club, 529 14th St. NW, 13th Floor.
Friday, Dec 7
The House will meet at 9:00 AM for legislative business.
8:30 AM - 12:30 PM. Day two of a two day conference hosted by the NTIA regarding its grant program named "Technology Opportunities Program", or TOP. See, agenda. The second day will focus on how to write TOP grant applications. The price to attend is $65. Location: Renaissance Hotel, 999 Ninth Street NW.
The Bureau of Export Administration will host a course titled "How To Classify My Item".  The price to attend is $50. For more information, contact Douglas Bell at 202 482-2642. Location: Ronald Reagan International Trade Center.
12:15 PM. The FCBA's Wireless Telecommunications Practice Committee will host a luncheon. Julius Knapp, Deputy Chief of the FCC's Office of Engineering and Technology will be give an overview of current and future technologies using unlicensed spectrum, including Bluetooth, Wi-Fi and other products that could be used in the unlicensed bands. The price to attend its $15.00. RSVP to Wendy Parish. Location: Sidley Austin Brown & Wood, 1501 K Street, NW Conference Room 6-E.
5:00 PM. Deadline to submit nominations to the FCC to fill three vacancies on the FCC's Local and State Government Advisory Committee (LSGAC). See, FCC notice.
Monday, Dec 10
9:00 AM. National Telephone Cooperative Association (NTCA) will host a press breakfast at which it will discuss the various technologies currently deployed by NTCA members, including broadband based applications. RSVP to Donna Taylor at 703 351-2086 or dtaylor@ntca.org. Location: NTCA Headquarters, Conference Room, 4121 Wilson Blvd., 10th floor, Arlington, VA.
TIME? There will be a continuation of the hearing begun on November 27 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: U.S. District Court, Baltimore, Maryland.
12:15 PM. The FCBA's Legislative Practice Committee will host a discussion of the Congressional budget process and its influence on spectrum policy. The speakers will be Jim Hearn (Senate Budget Committee staff) and David Moore (Congressional Budget Office). RSVP to Liz Henderson. Location: Wilmer Cutler & Pickering, 2400 N St. NW, Washington DC.
1:30 - 3:30 PM. The American Enterprise Institute (AEI) will host a panel discussion titled "Should the WTO Determine U.S. Tax Policy?" The speakers will be Michael Finger (AEI), Gary Hufbauer (Institute for International Economics), Dave Brumbaugh (Congressional Research Service), John Meagher (PriceWaterhouse Coopers), Kevin Hassett (AEI). See, online information and registration page. Location: Wohlstetter Conference Center, AEI, 1150 17th Street, NW.