| Divided En Banc 5th Circuit
Reverses in Veeck v. SBCCI |
6/10. The U.S. Court
of Appeals (5thCir) issued it en
banc opinion in Veeck
v. SBCCI, a case involving whether a
copyrighted work loses it protection when adopted into law.
The Court split 9-6.
Background. The Southern
Building Code Congress International (SBCCI) is a
nonprofit organization that develops, promotes, and
promulgates model building codes. Local governments, in turn,
enact its codes into law by reference, in whole, or in part.
SBCCI asserts a copyright in each of its codes. Peter Veeck,
who also uses the name Texoma Regional Web, operates a web site that
contains information about North Texas. Several towns in North
Texas have adopted SBCCI model codes. Veeck purchased from
SBCCI CDs with copies of the building codes. In disregard of
the software license and copyright notice, Veeck copied and
published these building codes into his web site.
District Court. Veeck filed a complaint in U.S.
District Court (EDTex) against SBCCI seeking a declaratory
judgment that his actions did not violate the Copyright Act.
SBCCI counter claimed for copyright infringement. The Court
ruled on cross motions for summary judgment that Veeck had
infringed valid copyrights, and permanently enjoined Veeck
from further infringement.
Appeals Court - Three Judge Panel. A divided three
judge panel affirmed in an opinion
issued on February 2, 2001. The majority wrote that "if
code writing groups like SBCCI lose their incentives to craft
and update model codes and thus cease to publish, the
foreseeable outcome is that state and local governments would
have to fill the void directly, resulting in increased
governmental costs as well as loss of the consistency and
quality to which standard codes aspire. A second glance at the
names of the amici supporting SBCCI's position in this case
provides an idea of the potential sweep of a contrary holding
that the authors of model codes could not enforce copyrights
in their works once the ultimate reason for their very
creation is realized." See also, TLJ story, 5th
Circuits Affirms Judgment of Internet Copyright Infringement,
February 5, 2001.
Appeals Court - En Banc. A divided en banc panel
reversed. Judge Edith Jones wrote the opinion for the majority
of nine.
The Court wrote that "As the organizational author of
original works, SBCCI indisputably holds a copyright in its
model building codes. ... The question before us is whether
Peter Veeck infringed SBCCI's copyright on its model codes
when he posted them only as what they became -- building codes
of Anna and Savoy, Texas -- on his regional website. Put
otherwise, does SBCCI retain the right wholly to exclude
others from copying the model codes after and only to the
extent to which they are adopted as ``the law´´ of various
jurisdictions?"
First, the Court held that Supreme Court precedents of Banks
v. Manchester, 128 U.S. 244, 9 S.Ct. 36 (1888) and Wheaton
v. Peters, 33 U.S. (8 Pet.) 591 (1834) support Veeck. Both
cases involved claims by reporters to hold copyrights in their
published copies of court opinions. The Supreme Court held in
these cases that judges, as public officials, cannot claim to
be authors of their official opinions for the purpose of
copyright protection. The Supreme Court denied copyright
protection to the court reporters.
The Fifth Circuit wrote that it extended this reasoning to the
present case. It wrote that "we hold that when Veeck
copied only ``the law´´ of Anna and Savoy, Texas,
which he obtained from SBCCI's publication, and when he
reprinted only ``the law´´ of those municipalities, he did
not infringe SBCCI's copyrights in its model building
codes."
Second, the Court held that the Copyright Act and the merger
doctrine support Veeck. The Court wrote that "The statute
excludes from copyright protection ideas, procedures,
processes, systems methods of operation, or information in the
public domain. See 17 U.S.C.
§ 102(b) ... If an idea is susceptible to only one
form of expression, the merger doctrine applies and § 102(b)
excludes the expression from the Copyright Act. ... Veeck
copied the building code of the towns of Anna and Savoy,
Texas, based on their adoption of a version of the SBCCI model
code. The codes are ``facts´´ under copyright law. They are
the unique, unalterable expression of the ``idea´´ that
constitutes local law."
Third, the Court wrote that judicial precedent from other
supports Veeck. In particular, the Court distinguished two
cases based on similar facts. In CCC Info. Servs. v.
Maclean Hunter Mkt. Reports, Inc., 44 F.3d 61 (2d Cir.
1994), cert. denied, 516 U.S. 817 (1995), the Second
Circuit upheld the copyright of a privately prepared listing
of automobile values that states required insurance companies
to use. In Practice Mgt. Info. Corp. v. American Med. Ass'n,
121 F.3d 516 (9th Cir. 1997), cert. denied, 522 U.S.
933 (1997), opinion amended by 133 F.3d 1140 (9th Cir.
1998), the Ninth Circuit held that the American Medical
Association did not lose the right to enforce its copyright
when use of its promulgated coding system was required by
government regulations. In the present case, the Court
distinguished the legislative act of reference from the
legislative act of incorporation.
Dissents. Both Judges Patrick Higginbotham and Weiner
wrote dissents. Higginbotham criticized the opinion of the
Court as "federal common law". He added that
"the Congress is best suited" to reach conclusions
such as that of the majority.
He also wrote that the majority misinterpreted the Supreme
Court's holding in Banks: "Banks holds that
judges, as public employees, cannot have a financial interest
in the fruits of their judicial labors. It is a case about
authorship, about the acquiring of copyrights by public
officials, not a case invalidating the copyrights held by
private actors when their work is licensed by lawmakers."
He also rejected the merger argument as mere "word
play".
Weiner wrote a voluminous and adamant dissent joined by five
other judges. He differed with the majority on nearly
everything, except its statement of the facts, which he
nevertheless amply amended. He wrote that the majority
misinterpreted Supreme Court precedent, misinterpreted cases
from other Circuits, and misapplied the doctrine of merger. He
also wrote at length about the policy implications.
He wrote that "Today, the trend toward adoption of
privately promulgated codes is widespread and growing, and the
social benefit from this trend cannot be seriously questioned.
The necessary balancing of the countervailing policy concerns
presented by this case should have led us to hold that, on
these facts, the copyright protection of SBCCI's privately
authored model codes did not simply evanesce ipso facto,
when the codes were adopted by local governments; rather, they
remain enforceable, even as to non-commercial copying, as long
as the citizenry has reasonable access to such publications
cum law -- and subject, of course, to exceptions for implied
or express waiver or consent, fair use, or other recognized
exceptions, when applicable. For these reasons, I cannot join
in the majority's inflexible reasoning and unnecessarily
overbroad holding."
Certiorari. This case may be a likely candidate for
review by the Supreme Court. The Fifth Circuit divided nearly
evenly. This opinion arguably creates a conflict between the
Fifth Circuit, and the First, Second and Ninth Circuits.
Finally, the Supreme Court recently demonstrated an interest
in the copyright clause by granting certiorari in Eldred v.
Ashcroft. |
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|
| BIS/BXA Announces NOI Re
TSR MTOPS |
6/10. The Bureau of
Industry and Security (BIS), formerly known as the Bureau
of Export Administration (BXA), published a notice
in the Federal Register regarding a notice of inquiry (NOI)
regarding "the current limit for use of License Exception
TSR for exports and reexports of technology and software on
the Commerce Control List (CCL) of the Export Administration
Regulations (EAR) under Export Classification Control Numbers
(ECCNs) 4D001 and 4E001".
The notice further states that "These ECCNs control
technology and software that can be used for the development,
production, or use of computers. The goal of this notice of
inquiry is to collect information from industry that will
assist BIS in evaluating whether the current TSR eligibility
level of 33,000 Millions of Theoretical Operations per Second
(MTOPS) for exports and reexports to most countries should be
adjusted, taking into consideration the control level for the
export of computer equipment and the control policies of other
member countries of the Wassenaar Arrangement."
Public comments are due by July 10, 2002. See, Federal
Register, June 10, 2002, Vol. 67, No. 111, at Pages 39675 -
39676. |
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| Rep. Capuano Writes FCC Re
Classification of Cable Modem Service |
6/4. Rep. Michael
Capuano (D-MA) wrote a letter
[PDF] to the Federal
Communications Commission (FCC) regarding its notice of
proposed rulemaking (NPRM) titled "Appropriate Regulatory
Treatment for Broadband Access to the Internet over Cable
Facilities".
He wrote that "It is my understanding that on March 15,
2002, the FCC issued a Declaratory Ruling that found cable
modem service provided on a cable system should be classified
as an ``interstate information service´´. This ruling has
broad implications for the ability of local communities to
regulate this service."
He argued that "the NPRM will drastically impact the
ability of local governments to charge franchise fees based on
cable modem service revenues. This creates economic hardship
for thousands of cities and towns, many already struggling
with revenue shortfalls. In addition, it will also deny these
communities the opportunity to recoup the expense of providing
right of way for cable companies."
The FCC announced its Declaratory
Ruling and Notice of Proposed Rulemaking [PDF] at its
meeting on March 14. It released the 75 page document on March
15. It addresses the legal classification and the appropriate
regulatory framework for broadband access to the Internet over
cable system facilities. The vote was three to one.
Commissioner Michael
Copps wrote strenuous dissent.
This is GN Docket No. 00-185 and CS Docket No. 02-52. See
also, FCC
release.
The FCC concluded "that cable modem service, as it is
currently offered, is properly classified as an interstate
information service, not as a cable service, and that there is
no separate offering of telecommunications service. In
addition, we initiate a rulemaking proceeding to determine the
scope of the Commission's jurisdiction to regulate cable modem
service and whether (and, if so, how) cable modem service
should be regulated under the law ..."
The DR & NPRM further states that "The Communications
Act does not clearly indicate how cable modem service should
be classified or regulated", but nevertheless "conclude[s]
that cable modem service as currently provided is an
interstate information service, not a cable service, and that
there is no separate telecommunications service offering to
subscribers or ISPs."
This declaratory ruling is also the subject of petitions for
review pending in the U.S. Court of Appeals. |
|
|
| SEC Files Suit for
Misstatement of Financial Results |
6/10. The Securities and
Exchange Commission (SEC) filed a civil complaint
in U.S. District Court
(DC) against Kenneth Kurtzman and Brian Bergeron alleging
violation of federal securities laws in connection with the
misstatement of Ashford.com's financial results, by improperly
deferred $1.5 Million in expenses under a contract with Amazon.com.
The complaint alleges violation of §§ 10(b), 13(a),
13(b)(2)(A) and 13(b)(5) of the Exchange Act and Rules 10b-5,
12b-20, 13a-1, 13a-13, 13b2-1 and 13b2-2 thereunder. The
complaint seeks civil penalties.
The SEC also announced that "Kurtzman and Bergeron
consented, without admitting or denying the allegations in the
Commission's complaint, to pay civil penalties of $60,000 and
$25,000, respectively." See, SEC
release.
The SEC also instituted and settled an administrative
proceeding against Kurtzman, Ashford.com, and Amazon.com. See,
Order
Instituting Proceedings. The Order alleges that "The
Amazon.com employees ... should have known that the purpose of
splitting the settlement into two letters was to allow
Ashford.com to delay the recognition of expenses. Amazon.com's
acquiescence in a settlement documented with two letters
facilitated Ashford.com's improper deferral of expenses."
The SEC did not allege a Section 10 violation by Amazon. |
|
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| SEC Official Addresses
Internet Advisers Proposal |
6/6. Paul Roye, Director of the Securities and Exchange Commission's
(SEC) Division
of Investment Management gave a speech
in New York City in which he addressed many topics related to
investment management, including the SEC's Internet advisers
proposal.
He stated that "on April 12th, in response to an
increasing number of investment advisers providing advice
primarily through the Internet, the Commission proposed rule
amendments under the Advisers Act that would permit an adviser
that conducts substantially all of its advisory business
through an interactive Internet website, to register with the
Commission rather than registering with all of the states. As
you may be aware, under the National Securities Markets
Improvement Act's amendments to the Advisers Act, advisers
that have $25 million or more in assets under management
generally register with the Commission, and advisers that have
less than $25 million generally register with the
states."
See, SEC's notice
of this proposed rule. June 6 was the close of the public
comment period. See, electronically
filed comments.
Roye continued that, "However, so-called Internet
advisers typically do not have ``assets under management´´
because they provide intermittent securities advice rather
than ``continuous and regular supervisory or management
services.´´ Therefore, most Internet advisers currently do
not qualify to register with the Commission. Instead, they
potentially must register with all states because, unlike a
``bricks and mortar´´ adviser, Internet advisers cannot
predict from which geographic location their clients will
come."
"The Commission's proposal was driven in part by the
development of Internet technology that was not prevalent in
1997 when the NSMIA split between federal and state
registration was implemented. As part of the Chairman's
modernization effort, I believe that we should revise our
rules, as necessary, in the wake of technological developments
in the marketplace," said Roye. |
|
|
| GAO Reports Info Security
Weaknesses at Corps of Engineers |
6/10. The General Accounting
Office (GAO) released a report [PDF]
titled "Information Security: Corps of Engineers Making
Improvements, But Weaknesses Continue".
The report concludes that "continuing and newly
identified vulnerabilities involving general and application
computer controls continue to impair the Corps' ability to
ensure the reliability, confidentiality, and availability of
financial and sensitive data. These vulnerabilities warrant
management’s attention to decrease the risk of inappropriate
disclosure and modification of data and programs, misuse of or
damage to computer resources, or disruption of critical
operations. Such vulnerabilities also increase risks to other
Department of Defense (DOD) networks and systems to which the
Corps' network is linked." |
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| People and Appointments |
| 6/10. Mary Snapp was named Microsoft's Vice President
of Law and Corporate Affairs, reporting to incoming General
Counsel Brad Smith. See, MSFT
release. |
|
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| More News |
6/10. The Supreme Court denied certiorari in Visa USA v.
Wal-Mart Stores, No. 01-1464, without opinion. See, Order
List [PDF], at page 9. See also, October 17, 2001, opinion
of the U.S. Court of Appeals (2ndCir).
6/10. The Business Software
Alliance (BSA) stated in a release
that it commissioned a study of international software
piracy rates that concluded that global piracy grew to 40%
last year.
6/10. The U.S.
Court of Appeals (5thCir) issued its opinion
in Tubos
De Acero De Mexico v. American International Investment Corp.,
a case arising out of a lease of ultrasonic testing pipe
inspection equipment used in the offshore oil industry. There
were numerous commercial law issues on appeal, including
application of the Louisiana Uniform Trade Secrets Act (LUTSA). |
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| About Tech Law Journal |
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Privacy
Policy
Notices
& Disclaimers
Copyright 1998 - 2002 David Carney, dba Tech Law Journal. All
rights reserved. |
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| Tuesday, June 11 |
The House will meet at 12:30 PM for morning hour and 2:00 PM
for legislative business. No votes are expected before 6:30
PM. The House will consider a number of measures under
suspension of the rules.
The Supreme Court is on recess until Monday, June 17.
Day two of a two day seminar titled Managing Trade
Compliance In Today's Environment. The seminar is offered
by the U.S. Department of Commerce's Bureau of Industry and Security
(formerly BXA). The price to attend is $325. See, information
page. Location: Marriott at Metro Center, 775 12 Street
NW.
Day three of a three day conference hosted by George Mason
University titled Networked Economy Summit. See, event web site.
Location: Hyatt Regency Reston, Reston, VA.
7:00 AM - 4:00 PM. Day one of a two day conference titled Current
and Emerging Solutions to Public Safety Communications
Interoperability hosted by the NTIA
and the Public Safety Wireless Network (PSWN) Program. Audio
webcast. See, agenda.
See also, notice
in the Federal Register. Location: Ronald Reagan International
Trade Center, 1300 Pennsylvania Avenue, NW.
9:00 AM - 4:00 PM. Day one of a three day meeting of the NIST's
Computer System Security and Privacy Advisory Board. See, notice
in Federal Register. Location: National Security Agency's
National Cryptologic Museum, Colony 7 Road, Annapolis
Junction, MD.
9:00 AM - 2:00 PM. The American
Enterprise Institute (AEI) will host a conference titled The
Future of Telecom Regulation. See, agenda and
registration page. Location: AEI, 12th floor, 1150 17th
St., NW.
9:30 AM. The Senate
Commerce Committee's Subcommittee on Communications will
hold a hearing titled Spectrum Management. Press
contact: Andy Davis 224-6654. Location: Room 253, Russell
Building.
2:00 PM. There will be a press conference to release a report
titled International Music Piracy Report 2002. For more
information, contact Amanda Collins at 202 857-9625 or acollins @riaa.org.
Location: National Press Club,
Murrow Room, 529 14th St. NW, 13th Floor. |
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| Wednesday, June 12 |
The House will likely consider a motion to go to conference
on HR 3005,
the Bipartisan Trade Promotion Authority Act of 2002.
7:00 AM - 3:30 PM. Day two of a two day conference titled Current
and Emerging Solutions to Public Safety Communications
Interoperability hosted by the NTIA
and the Public Safety Wireless Network Program. Audio webcast.
See, agenda.
See also, notice
in the Federal Register.
8:30 AM - 4:00 PM. Day two of a three day meeting of the NIST's
Computer System Security and Privacy Advisory Board. See, notice
in Federal Register.
9:00 AM - 1:00 PM. The President's Council of Advisors on
Science and Technology (PCAST) will hold a public meeting. The
agenda includes four items: (1) the science and technology of
combating terrorism, (2) policies and technologies to improve
energy efficiency, (3) the federal investment in science and
technology research and development, and (4) demand issues
that can speed the deployment of a 21st Century broadband
infrastructure. See, notice
in Federal Register. Location: Colonial Room, Renaissance
Mayflower Hotel, 1127 Connecticut Ave., NW.
10:00 AM. The FCC's Technological Advisory
Council will hold a meeting. See, FCC
notice [PDF]. Location: FCC, Commission Meeting Room, 445
12th St., SW.
11:00 AM. The Cato Institute
will host a panel discussion titled Digital Copy
Protection: Mandate It? Ban It? Or Let the Market Decide?.
The speakers will be Rick Lane (News Corporation), Jonathan
Potter (DiMA), Sarah Deutsch (Verizon), Stewart Verdery (Vivendi
Universal), and Jonathan Zuck (ACT).
Lunch will follow. Webcast. See, online
registration page. Location: Cato, 1000 Massachusetts
Avenue, NW.
12:30 PM. The FCBA's
Global Telecommunications Development Committee and the
International Practice Committee will host a luncheon seminar
titled Three Principles for the Liberalization of
Telecommunications in Latin America: Competition, Competition
and Competition. The speakers will be Henoch Aguiar, a
former Secretary of Telecommunications of Argentina. This
program is free and lunch will be provided. RSVP by faxing or
e-mailing your name, affiliation, and contact information to
Javier Miguel Tizado at 202 639-9355 or jtizado @whitecase.com
by Monday, June 10th. Location: White & Case, 601 13th
St., NW, Suite 600.
POSTPONED. 2:30
PM. The Senate
Judiciary Committee's Subcommittee on Technology,
Terrorism, and Government Information Subcommittee will hold a
hearing on S 2541,
the Identity Theft Penalty Enhancement Act. Press
contact: Mimi Devlin at 202 224-9437.
2:30 PM. The Senate
Commerce Committee's Subcommittee on Science, Technology,
and Space Subcommittee will hold a hearings to examine the ICANN.
Press contact: Andy Davis at 202 224-6654. Location: Room 253,
Russell Building. |
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| Thursday, June 13 |
The House will meet at 10:00 AM for legislative business. No
votes are expected after 6:00 PM. The House will likely
consider HR 4019,
the Permanent Marriage Penalty Relief Act of 2002.
8:30 AM - 3:00 PM. Day three of a three day meeting of the NIST's
Computer System Security and Privacy Advisory Board. See, notice
in Federal Register. Location: National Security Agency's
National Cryptologic Museum, Colony 7 Road, Annapolis
Junction, MD.
9:30 AM. The FCC will hold a
meeting. See, agenda.
Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission
Meeting Room).
10:00 AM. The House
Ways and Means Committee will hold a hearing on the extraterritorial
income regime. Location: Room 1100, Longworth Building.
10:00 AM. The House
Judiciary Committee has scheduled a meeting to mark up
several bills, including HR 4598,
the Homeland Security Information Sharing Act, HR 3215,
the Combatting Illegal Gambling Reform and Modernization Act (Goodlatte
Internet gambling bill), and HR 4623,
the Child Obscenity and Pormography Prevention Act of 2002.
Audio webcast. Location: Room 2141, Rayburn Building.
2:00 - 4:00 PM. The American
Enterprise Institute (AEI) will host a panel discussion
titled The Future of the Distribution of Video Programming.
The speakers will be Harold Furchtgott Roth (AEI), James Ramo
(Movielink), Jerald
Fritz (Albritton Communications), Michael Kupinski (A.G. Edwards), Jonathan
Potter (DiMA), and Donald
Whiteside (Intel). See, agenda and
registration page. Location: AEI, 12th floor, 1150 17th
St., NW.
2:00 PM. The Senate
Judiciary Committee will hold a hearing on pending
judicial nominations. See, notice.
Press contact: Mimi Devlin at 202 224-9437. Location: Room
226, Dirksen Building.
2:30 PM. The House
Judiciary Committee's Subcommittee on Courts, the
Internet, and Intellectual Property will hold an oversight
hearing on titled Copyright Arbitration Royalty Panel
Structure and Process. Location: Room 2141, Rayburn
Building. |
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| Saturday, June 15 |
| Deadline for the FCC to submit
its annual report to Congress regarding progress made in
achieving the objectives of the Open Market Reorganization for
the Betterment of International Telecommunications Act (ORBIT
Act), 47 U.S.C. § 646. See, FCC
notice [PDF]. |
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| Monday, June 17 |
The Supreme Court will return from recess.
2:00 - 3:30 PM. The FCC's International Bureau will
hold a public forum to discuss issues and policies pertaining
to the international satellite network coordination process
and the domestic regulatory aspects of the International
Telecommunication Union's satellite network filing
process. Location: FCC, 445 12th Street, SW, Commission
Meeting Room.
Deadline to submit comments to the FCC regarding
its Notice of Proposed Rulemaking regarding the consequences
of the FCC's classification of cable modem service as an
information service. This is CS Docket No. 02-52. See, FCC
release [PDF] and notice
in Federal Register. |
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