| Court Upholds State Spam
Statute Against Commerce Clause Challenge |
1/2. The California
Court of Appeal (1/2) issued its opinion
[PDF] in Ferguson
v. Friendfinders, holding that a California
statute that regulates the use of unsolicited e-mail
advertising does not violate the dormant commerce clause of
the U.S. Constitution. The Court rejected the notion that any
state regulation of the Internet violates the commerce clause.
Proceedings Below. Mark Ferguson, a California
resident, filed a complaint in California Superior Court for
San Francisco County against Friendfinders, Inc. and Conru
Interactive, Inc., two California businesses located in Palo
Alto, California, alleging that they sent unsolicited e-mail
advertisements that did not comply with the requirements set
forth in § 17538.4
of the California Business and Professions Code. He also
alleged trespass, unfair business practices, and unlawful
advertising practices. He sought class action status.
Defendants filed a demurrer, which the trial court granted.
The trial court held, among other things, that
"California Business and Professions Code section 17538.4
unconstitutionally subjects interstate use of the Internet to
inconsistent regulations, therefore violating the dormant
Commerce Clause of the United States Constitution."
The Statute: Requirements for Unsolicited Advertising
E-mail. § 17538.4 provides that no unsolicited
advertising e-mail may be sent in California unless in meets
certain enumerated requirements. Subsection (a) provides that
there must be a return e-mail address for recipients to use to
opt out of receiving further e-mail. Subsection (b) provides
that there must be a notice at the top of the e-mail notifying
the recipient of the right to opt out. Subsection (c) provides
that once a recipient has notified the sender of his decision
to opt out, the sender cannot send that person any further
unsolicited e-mail.
The Statute: Limited to In State Mailers. § 17538.4
also contains restrictions on its scope. Subsection (d)
provides, in part, that "this section shall apply when
the unsolicited e-mailed documents are delivered to a
California resident via an electronic mail service provider's
service or equipment located in this state."
Dormant Commerce Clause. Article I, Section 8, of the
Constitution provides that "The Congress shall have Power
... to regulate Commerce with foreign Nations, and among the
several States ..." The dormant commerce clause is the
judicial concept that the Constitution, by delegating certain
authority to the Congress to regulate commerce, thereby bars
the states from legislating on certain matters that affect
interstate commerce, even in the absence of Congressional
legislation. It is applied to block states from regulating in
a way that materially burdens or discriminates against
interstate commerce. See, Gibbons v. Ogden,
22 U.S. 1 (1824), and Cooley v. Board of Wardens, 53
U.S. 299 (1851). More recent treatments of the concept include
Healy v. The Beer Institute, 491 U.S. 324 (1989), and CTS
Corp. v. Dynamics Corp. of America, 481 U.S. 69 (1987).
Court of Appeal. The Court of Appeal reversed the trial
court. The Court reasoned that the dormant commerce clause
entails a two part enquiry: first, whether the state
regulation discriminates against interstate commerce, and
second, whether the regulation imposes a burden on interstate
commerce that is clearly excessive in relation to the local
benefits.
The Court stated that the first part of the analysis invokes
the strict scrutiny test. However, it noted that the statute
equally affects in state and out of state e-mailers. Hence,
there is no discrimination against out of state e-mailers.
Moreover, the Court reasoned, since the statute only applies
to e-mailers sent via a service provider or equipment located
in California, it cannot be said to regulate commerce wholly
outside of California.
The Court stated that the second part of the analysis involves
a balancing test. It found that protecting its citizens from
the harmful effects of unsolicited e-mail is a legitimate
state interest, and the statute furthers that interest. On the
other side of the scale, the Court found that regulating
unsolicited e-mail does not burden interstate commerce.
Rather, it benefits it by reducing fraud. Moreover, the
requirements imposed upon the senders are slight. Hence, in
applying the balancing test, the benefits of the statute
outweigh the burdens.
Washington Statute. The state of Washington has also
upheld its anti spam statute against a dormant commerce clause
challenge. See, Commercial Electronic Mail Act, Chapter 19.190
Revised Code of Washington, at RCW
19.190.020. On October 29, 2001, the Supreme Court of the
United States denied a petition for writ of certiorari in
this case, Heckel v. Washington. The California Court of
Appeal relied on this Washington precedent. |
|
|
| More Microsoft News |
| 1/2. The U.S.
District Court (DC) issued an order [PDF]
in the Microsoft antitrust case setting a hearing for January
7 on Microsoft's motion
to amend the scheduling order (to delay the trial date). Nine
of the state plaintiffs have not joined in the settlement
agreement negotiated by Microsoft, the Department of Justice,
and the other state plaintiffs. The hearing will be held at
9:15 AM before Judge Colleen Kotelly. This is Civil Action No.
98-1233 (CKK). |
|
|
|
| Bush Relaxes Computer
Export Controls |
1/2. President Bush announced that he is relaxing certain
controls on the export of high performance computers and
microprocessors. This change applies to "Tier 3
countries", which include Russia, Israel, India,
Pakistan, and China. Currently, U.S. exporters are required to
notify the Department of Commerce of proposed exports to Tier
3 countries of computers with the capacity to conduct at least
85,000 Millions of Theoretical Operations Per Second (MTOPS).
President Bush raised this level to 190,000 MTOPS.
This change will become effective after the expiration of a 60
day notice period for the U.S. Congress. Bush wrote a letter
to Congressional leading informing them of the change. He
wrote, in part: "In accordance with the provisions of
section 1211(d) of the National Defense Authorization Act for
Fiscal Year 1998 (Public Law 105-85), I hereby notify you of
my decision to establish a new level for the notification
procedure for digital computers set forth in section 1211(a)
of Public Law 105-85. The new level will be 190,000 millions
of theoretical operations per second (MTOPS). In accordance
with the provisions of section 1211(e), I hereby notify you of
my decision to remove Latvia from the list of countries
covered under section 1211(b)."
See also, White
House release and statement
by the Deputy Press Secretary. |
|
|
| Federal Circuit Reverses in
Linear Technology v. Micrel |
12/28. The U.S.
Court of Appeals (FedCir) issued its opinion in Linear
Technology v. Micrel, a patent infringement
case involving application of the on-sale bar.
Linear Technology
filed a complaint in U.S. District Court (NDCal)
against Micrel alleging
infringement of U.S.
Patent No. 4,755,741, which pertains to adaptive
transistor drive circuitry used in telecommunications, cell
phones and computers. The District Court held the patent
invalid due to the on-sale bar.
35
U.S.C. § 102(b) provides that "A person shall be
entitled to a patent unless ... (b) the invention was patented
or described in a printed publication in this or a foreign
country or in public use or on sale in this country, more than
one year prior to the date of the application for patent in
the United States".
The Appeals Court reversed. The Court stated that in its
recent decision, Group One v. Hallmark Cards, 254 F.3d
1041 (2001), required reversal. In that opinion, which was
handed down after the District Court ruled in this case, the
Court changed the analysis required to determine whether an
offer for sale has occurred. |
|
|
| More News |
1/2. The U.S. Patent and
Trademark Office (USPTO) announced that it
"discovered a programming error that has resulted in
Notices of Allowance mailed on or after November 13, 2001 and
before December 23, 2001 being printed with a zero (0) in the
patent term adjustment field, regardless of whether the
application is entitled to patent term adjustment or
not." See, USPTO
notice.
1/2. The Senate
Government Affairs Committee will hold a hearing regarding
the collapse of Enron, and how it might be exploited for
political purposes. Sen.
Joe Lieberman (D-CT) is the Chairman of the full
Committee. Sen. Carl Levin
(D-MI), Chairman of its Permanent Subcommittee on
Investigations, also announced that his subcommittee is
investigating Enron. See, Levin
release and statement.
1/2. The GAO released a report [PDF]
titled "Purchase Cards: Control Weaknesses Leave Two Navy
Units Vulnerable to Fraud and Abuse". It reviews the
breakdown of internal controls over purchase card activity at
two Navy units in San Diego, California -- the Space and Naval
Warfare Systems Command (SPAWAR) Systems Center and the Navy
Public Works Center. The report found that the two units are
"vulnerable to fraudulent, improper, and abusive
purchases and theft and misuse of government property"
and recited instances of abuse. For example, the GAO could not
verify that certain items, "including laptop computers,
personal digital assistants (PDA) such as Palm Pilots, and
digital cameras, were in the possession of the
government." The GAO also found that PDAs were purchased
"without documented government need", and that flat
panel monitors were purchased at excessive prices. The report
also sets out recommendations for more effective management
control. |
|
|
| SEC Sues Software CEO for
False Financial Statements |
| 1/2. The SEC announced
that it filed a civil complaint
in U.S. District Court (DUtah) against Bruce Acacio alleging
violation of federal securities laws. Acacio is the Ch/CEO of
California Software Corporation, an Irvine, California, based
software company. The complaint alleges, among other things,
that Acacio provided false and misleading information in the
offer and sale of securities, falsified the books and records
of an issuer of securities, and provided false information to
auditors in connection with the audit of financial statements.
Acacio simultaneously consented to entry of an injunction
enjoining him from future violations of federal securities
laws; he also agreed to pay $30,000 in penalties. (See, SEC v.
Acacio, U.S. District Court for the District of Utah, D.C. No.
2:01CV-1010ST.) |
|
|
|
| Friday, Jan 4 |
10:00 AM - 1:00 PM. The FCC's Network
Reliability and Interoperability Council will hold a meeting.
See, notice
in Federal Register, November 13, 2001, Vol. 66, No. 219, at
Page 56823. Location: FCC, Commission Meeting Room, Room
TW-C305, 445 12th St. SW., Washington DC.
12:15 PM. The Federal
Communications Bar Association's Wireless
Telecommunications Practice Committee will host a luncheon.
The speakers will be advisors to the FCC Commissioners: Peter
Tenhula (Powell), Bryan Tramont (Abernathy), Paul Margie (Copps),
and Monica Desai (Martin). The price to attend is $15.00. RSVP
to Wendy Parish at wendy@fcba.org.
Location: Sidley Austin Brown
& Wood, 1501 K Street, NW Conference Room 6-E,
Washington DC.
Deadline to submit oppositions and comments to the FCC in
response to Cingular Wireless', Nextel's, and Verizon
Wireless' petitions for reconsideration of certain provisions
of the FCC's October 12 orders addressing and conditionally
approving requests for waivers and approval of revised
deployment plans for wireless Enhanced 911 (E911) services.
See, FCC
Notice. (CC Docket No. 94-102.) |
|
|
| Monday, Jan 7 |
9:15 AM. The U.S.
District Court (DC) will hold a hearing on Microsoft' motion
to amend the scheduling order (to delay the trial date) in the
government antitrust lawsuit. Nine of the state plaintiffs
have not joined in the settlement agreement negotiated by
Microsoft, the Department of Justice, and the other state
plaintiffs. See, order [PDF].
This is Civil Action No. 98-1233 (CKK), Judge Colleen Kotelly
presiding.
10:00 AM. The U.S. Court of
Appeals (FedCir) will hear oral argument in Bowers v.
Baystate Technologies, No. 01-1108. Location: Courtroom
402, 717 Madison Place, NW, Washington DC.
Deadline to resubmit comments with the U.S. Department of
Justice (DOJ) regarding the proposed settlement in the
antitrust case titled U.S. v. 3d Systems Corp. and DTM Corp.
(D.C. No. 1:01CV01237). The original comment period closed on
November 26, 2001. However, because of disruption of the U.S.
Mail in Washington DC, the DOJ requests that comments be
resubmitted. The deadline is 15 after publication of a notice
in the Federal Register on December 21, 2001, which would fall
on Saturday, January 5. See, notice
in Federal Register, December 21, 2001, Vol. 66, No. 246, at
Page 65992. |
|
|
| Tuesday, Jan 8 |
|
The Supreme
Court will hear oral argument in Festo Corporation v.
Shoketsu Kinzoku Koygo Kabushiki, No. 00-1543, a case
regarding the doctrine of equivalents in patent law. |
|
|
| Wednesday, Jan 9 |
10:00 AM. The U.S. Court of
Appeals (FedCir) will hear oral argument in Fantasy
Sports v. Sportsline.com, No. 01-1217, an appeal from the
U.S. District Court (EDVa). This is a patent infringement case
regarding U.S.
Patent 4,918,603, titled "Computerized Statistical
Football Game". (D.C. No. 99-CV-2131103; opinion at F.
Supp. 2d 886 (E.D.Va. 2000).) Location: Courtroom 402, 717
Madison Place, NW, Washington DC.
10:00 AM. The U.S. Court of
Appeals (FedCir) will hear oral argument in ManTech
Telecommunications v. US, No. 01-5090. Location: Courtroom
402, 717 Madison Place, NW, Washington DC.
12:15 PM. The Federal
Communications Bar Association's Telecom Competition
Issues Committee will host a brown bag lunch. Michael Katz,
a Deputy Assistant Attorney General for the DOJ's Antitrust
Division, and former Chief Economist of the FCC, will speak
about his observations on the similarities and differences
that characterize the two agencies' approach to competition
issues. Location: CTIA, 1250 Connecticut Ave., NW, 8th floor
conference room, Washington DC. |
|
|
| About Tech Law Journal |
Tech Law Journal publishes a free access web site and
subscription e-mail alert. The basic rate for a subscription
to the TLJ Daily E-Mail Alert is $250 per year. However, there
are discounts for entities with multiple subscribers. Free one
month trial subscriptions are available. Also, free
subscriptions are available for law students, journalists,
elected officials, and employees of the Congress, courts, and
executive branch, and state officials. The TLJ web site is
free access. However, copies of the TLJ Daily E-Mail Alert and
news items are not published in the web site until one month
after writing. See, subscription
information page.
Contact: 202-364-8882; E-mail.
P.O. Box 4851, Washington DC, 20008.
Privacy
Policy
Notices
& Disclaimers
Copyright 1998 - 2002 David Carney, dba Tech Law Journal. All
rights reserved. |
|
|