2/22. The Center for Democracy and Technology (CDT) released a report [48 pages in PDF] titled "Digital Search & Seizure: Updating Privacy Protections to Keep Pace with Technology".

The report concludes that "Information and communications technologies are changing so rapidly that they are outpacing the law’s privacy protections. Services like online storage of email and location capabilities built into cell phones offer tremendous convenience but also generate large amounts of data revealing our thoughts, associations and whereabouts. Personal information held by service providers is accessible to the government under weak standards based on outdated Supreme Court decisions. The major federal law on surveillance was written in 1986, before the World Wide Web even existed. Courts and Congress should respond. The Internet and communications industry, public interest organizations and the government need to enter into a dialogue aimed at ensuring that the fundamental right of privacy is protected in the face of technological change."

Jerry Berman, the head of the CDT, stated at a news conference on February 22 that "technology changes have eroded privacy protections", that recent statutory changes have given the government increased authority to intrude on communications, and that "we need new privacy protections".

The CDT's Jim Dempsey stated, as he has repeatedly in Congressional testimony and in comments to the Federal Communications Commission (FCC), that while the government agencies assert that the use of new technologies by bad guys has made the government's job harder, on balance, the digital revolution has been a boon for surveillance by the government.

The report addresses three topics, increased use of electronic storage, location technologies, and keystroke loggers and other government spyware. Dempsey addressed a fourth topic at the CDT news conference -- search technology. He cited, as an example, that the government now seeks search logs from Google.

The report enumerates a litany of threats to personal privacy posed by new information and communications technologies. However, Jerry Berman stated that he does not recommend that consumers not use these technologies. He said that "we believe in technology", and that people should use it. However, he argued that companies should disclose the limitations on privacy, and the law needs to be changed.

The authors of the report are Ari Schwartz, Lara Flint, Deirdre Mulligan, Gemma Suh, Indrani Mondal, James Dempsey, and Ben Karpf. See also, CDT release.

2/23. Montgomery County, Maryland, filed a complaint in U.S. District Court (DMd) against the U.S. alleging violation of the Medicare Prescription Drug Improvement and Modernization Act (MMA) in connection with the decision of the US Food and Drug Administration (FDA) to deny Montgomery County's request for a waiver of the ban on certain prescription drug importations.

Douglas Duncan, the Montgomery County Executive, stated in a release that "It is fundamentally unfair that people living in Canada pay a fraction of what Americans pay for the same prescription drugs ... Our lawsuit seeks to correct this inequity and allow seniors and others to get access to more affordable medications."

The Montgomery County release adds that "The County argues that FDA's denial of their importation waiver request is arbitrary because FDA permits numerous other State and local governments to operate Canadian drug importation programs in violation of federal law but refuses to assist the County to import these drugs within the law. Based on FDA’s tacit approval of these illegal programs, one can only conclude that FDA does not really believe that importation of drugs from Canada poses a safety risk to American consumers—despite its public pronouncements to the contrary."

2/24. The Department of Homeland Security's (DHS) Customs and Border Protection (CBP) has cracked down on importation of prescription drugs into the U.S. via mail and express mail delivery services.

TLJ spoke with Lynn Hollinger, spokesman for the CBP. She stated that CBP changed its procedures after imports of prescription drugs in violation of the Federal Food Drug and Cosmetic Act (FDCA) increased. She said that these illegal imports present numerous risks to consumers, including mislabeled drugs. She added that while many consumers purchase drugs from what they believe are licensed Canadian pharmacies, a Food and Drug Administration (FDA) study shows that 85% of drugs ordered from Canadian pharmacies are actually shipped from other countries.

Hollinger stated that it is not a violation of the FDCA to purchase a prescription drug from a pharmacy in another country and bring it back to the U.S. However, she said that this differs from purchasing drugs over the internet, or other remote purchases, from another country. If consumers buy prescription drugs in person, they can observe the business premises of the pharmacy and inspect the product.

She stated that the DHS does not have data on the percentage of illegal drug imports shipments that are purchased via the internet.

TLJ asked if CBP is cracking down on illegal drug imports at the request of pharmaceutical companies. She responded, "Absolutely not." She added that "we cannot be swayed by pharmaceutical companies."

Also, Sen. Bill Nelson (D-FL) issued a release on Friday, February 24, in which he complained about "stepped-up seizures by U.S. Customs and Border Protection" of prescription drugs purchased from Canadian suppliers by Florida residents.

Sen. Nelson stated that "Complaints like these jumped dramatically over the past week, indicating the federal government has organized a large crackdown on cheaper Canadian prescription drugs".

Sen. Nelson's release adds that his staff "have fielded scores of calls mostly from furious seniors in Florida who say the cheaper prescription drugs they bought from Canada mysteriously vanished in shipment -- leaving some without badly needed or life-sustaining medications".

The FDA did not immediately return a phone call, or respond to e-mailed questions.

2/22. The U.S. Court of Appeals (10thCir) issued its opinion in US v. Rx Depot, holding that the government can obtain disgorgement of profits from Rx Depot for violation of the Federal Food Drug and Cosmetic Act (FDCA).

Rx Depot, Inc. was a company, founded Carl Moore and David Peoples, that previously facilitated the sale of prescription drugs from Canada to customers in the US.

The Court of Appeals summarized its activities. "A customer with a prescription from an American physician could download forms from Rx Depot's website or visit one of Rx Depot's storefront affiliates to order medications. Rx Depot then transmitted the customer's forms, prescription, and payment information to cooperating Canadian pharmacies. A Canadian physician would rewrite the prescription, which was then filled by a Canadian pharmacy and sent directly to the customer in the United States. Rx Depot received a ten to twelve percent commission for each sale they facilitated."

The US Food and Drug Administration (FDA) filed a complaint in U.S. District Court (DOkla) seeking to enjoin Rx Depot for violation of the Federal Food Drug and Cosmetic Act (FDCA). It argued that the importation of drugs from Canada creates a public health risk.

Rx Depot admitted to violation of the FDCA, and consented to a permanent injunction. See, FDA release of August 20, 2004. However, the settlement between the FDA and Rx Depot left to the discretion of the District Court the determination of what other remedies to impose on Rx Depot.

The District Court held that restitution to consumers of Rx Depot was unavailable because they purchased at prices lower than in the US. The FDA sought disgorgement of profits. The District Court held that since the FDCA does not provide for disgorgement of profits, it is not available to the government in this case.

The Court of Appeals reversed the District Court on the disgorgement issue.

The FDA maintains the position that drug importation threatens public safety. For example, on November 8, 2005, it denied the request for a statutory waiver from Montgomery County, Maryland, and its government employees to import prescription drugs from Canada. The FDA's letter explains some of the public health issues involved. See also, related story in this issue titled "Montgomery County, Maryland, Sues FDA Over Importation of Drugs".

Also, Mark McClellan, the then Commissioner of the FDA, gave a more detailed speech on the problems associated with internet drug sales to the Drug Information Association in Ottawa, Canada, on November 11, 2003.

Intellectual Property Rights Regime. However, this case implicates more than just public health. It is, at bottom, also a case about intellectual property rights, and incenting the development of new drugs.

Developing new drugs requires considerable investment, risk, research and time. In order to incent drug companies to undertake all this, the US awards patents on new drugs, enabling these companies to recoup costs from sales and licensing of the drugs they develop. However, many countries, drug purchasing entities, and individual consumers, do not wish to underwrite the cost of developing new drugs. International internet based drug sales present a way for consumers in the US to not only pay less for drugs, but also to avoid underwriting the costs of drug research and development.

The FDA can shut down a US based company like Rx Depot. However, it faces a problem in obtaining further remedies, and in particular, remedies that would deter other internet based drug importers. The remedy of restitution for consumers is not available because most consumers who purchased from Rx Depot actually benefited from dealing with Rx Depot, because they obtained drugs at lower prices.

If there is consumer injury caused by Rx Depot's activities, it would lie in the increased prices that other US consumers pay for drugs, or in the harm caused by the undermining of the intellectual property rights incentive scheme.

The remedy of disgorgement of the profits of the violator is problematic because the FDCA does not enumerate disgorgement as an available remedy.

The FDCA provides merely, at 21 U.S.C. § 332(a), that "The district courts of the United States and the United States courts of the Territories shall have jurisdiction, for cause shown to restrain violations ..."

The Court of Appeals held that "when a statute invokes general equity jurisdiction, courts are permitted to utilize any equitable remedy to further the purposes of the statute absent a clear legislative command or necessary and inescapable inference restricting the remedies available."

The Washington Legal Foundation (WLF) filed an amicus curiae brief [PDF] with the Court of Appeals urging affirmance of the District Court. Although, its concern is with limitation of governmental powers, not drug importation issues.

This case is US v. Rx Depot, Inc., Rx of Canada, LLC, Carl Moore, and David Peoples, U.S. Court of Appeals for the 10th Circuit, App. Ct. No. 05-5003, an appeal from the U.S. District Court for the Northern District of Oklahoma, D.C. No. CV-03-616-EA(M).

The House will not meet on Monday, February 20, through Friday, February 24. It will next meet on Tuesday, February 28. See, Republican Whip Notice.

The Senate will not meet on Monday, February 20, through Friday, February 24. See, 2006 Senate calendar.

11:45 AM - 2:00 PM. The American Enterprise Institute (AEI) will host a program titled "The Google Copyright Controversy: Implications of Digitizing the World's Libraries". The speakers will be Robert Hahn (AEI-Brookings Joint Center), Douglas Lichtman (University of Chicago), and Hal Varian (University of California at Berkeley). See, notice. Location: AEI, 12th floor, 1150 17th St., NW.

The House will not meet. See, Republican Whip Notice.

The Senate will return from its Presidents' Day recess at 2:00 PM. It will resume consideration of S 2271, the PATRIOT Act amendments bill.

POSTPONED. 12:30 PM. New York Governor George Pataki will give a speech. See, notice. Location: Ballroom, National Press Club, 529 14th St. NW, 13th floor.

The House will return from its President's Day District Work Period at 2:00 PM. See, Republican Whip Notice.

8:30 AM - 4:45 PM. Day one of a two day conference hosted by the National Telecommunications and Information Administration (NTIA) titled "Improving Spectrum Management through Economic or Other Incentives". See, notice. Deputy Secretary of Commerce Anthony Sampson will give opening remarks. Location: National Academy of Sciences, Lecture Room, 2101 Constitution Ave., NW. The entrance at 2100 C St.

9:30 - 11:30 AM. The American Enterprise Institute (AEI) will host a panel discussion titled "Former SEC Division Directors Give Their Views on Regulatory Reform". The speakers will be Barry Barbash, Kathryn McGrath, Paul Roye, and Marianne Smythe. See, notice. Location: AEI, 12th floor, 1150 17th St., NW.

9:30 AM. The Senate Judiciary Committee (SJC) will hold another hearing "to examine issues relating to wartime executive power and the NSA's surveillance authority". Press contact: Blain Rethmeier (Specter) at 202 224-5225 or Tracy Schmaler (Leahy) at 202 224-2154. Location: Room 226, Dirksen Building.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "USF Contributions". See, notice. Press contact: Melanie Alvord (Stevens) at 202 224-8456, Aaron Saunders (Stevens) at 202 224-3991, or Andy Davis (Inouye) at 202 224-4546. The hearing will be webcast by the SCC. Location: Room 562, Dirksen Building.

12:00 NOON - 1:15 PM. The DC Bar Association will host a panel discussion titled "Patent Law Update: Impact Of Recent Federal Circuit Decisions On Crafting Patent Applications". The speaker will be Dale Lazar (DLA Piper Rudnick Gray Cary). The price to attend ranges from $10-$30. For more information, call 202 626-3463. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

1:00 - 6:30 PM. The Federal Communications Bar Association's (FCBA) will host a continuing legal education (CLE) seminar titled "Communications Law 101". Location: Wiley Rein & Fielding, 1776 K St., NW.

2:30 PM. The Senate Commerce Committee (SCC) will hold a hearing titled "USF Distribution". See, notice. Press contact: Melanie Alvord (Stevens) at 202 224-8456, Aaron Saunders (Stevens) at 202 224-3991, or Andy Davis (Inouye) at 202 224-4546. The hearing will be webcast by the SCC. Location: Room 562, Dirksen Building.

5:00 PM. Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division regarding its Draft Special Publication 800-73-1, titled "Interfaces for Personal Identity Verification". See also, summary [3 pages in PDF] titled "Proposed Changes to SP 800-73".

6:30 - 8:30 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host an event titled "Happy Hour".  For more information, contact Jason Friedrich at  jason dot friedrich at dbr dot com or Natalie Roisman at natalie dot roisman at fcc dot gov. Location: Restaurant Kolumbia, 1801 K Street, NW.

8:30 AM - 5:00 PM. Day two of a two day conference hosted by the National Telecommunications and Information Administration (NTIA) titled "Improving Spectrum Management through Economic or Other Incentives". See, notice. Location: National Academy of Sciences, Lecture Room, 2101 Constitution Ave., NW. The entrance at 2100 C St.

8:30 AM - 1:00 PM. The Information Technology Association of America (ITAA) will host an event titled "Enterprise VoIP: From Communication to Collaboration". For more information, contact Eerik Kreek at ekreek at itaa dot org. See, notice. Location: Ritz Carlton Pentagon City, Arlington, VA.

10:30 AM. The Senate Appropriations Committee's Subcommittee on the Legislative Branch will hold a hearing on the FY 2007 budget for the Library of Congress (LOC), Government Accountability Office (GAO), and other entities. Location: Room 138, Dirksen Building.

2:00 PM. The House Appropriations Committee's Subcommittee on Science, the Departments of State, Justice, and Commerce, and Related Agencies will hold a hearing on the FY 2007 budget for the Federal Communications Commission (FCC). Location: Room H-309, Capitol Building.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to the notice of proposed rulemaking (NPRM) portion of its Report and Order (R&O) and NPRM of August 5, 2005 regarding regulation of information services. The R&O classified wireline broadband internet access services as information services. The NPRM proposes to impose new regulatory burdens on information services. This item is FCC 05-150 in WC Docket No. 05-271, CC Docket No. 02-33, CC Docket No. 01-337, CC Docket Nos. 95-20 and 98-10, and WC Docket No. 04-242. See, story titled "FCC Classifies DSL as Information Service" in TLJ Daily E-Mail Alert No. 1,190, August 8, 2005. The FCC released the text [133 pages in PDF] of this item on September 23, 2005. See, notice in the Federal Register, October 17, 2005, Vol. 70, No. 199, at Pages 60259 - 60271.

10:00 AM. The House Appropriations Committee's Subcommittee on Science, the Departments of State, Justice, and Commerce, and Related Agencies will hold a hearing on the FY 2007 budget for the National Science Foundation (NSF). Location: Room H-309, Capitol Building.

10:00 AM. The House Appropriations Committee's Subcommittee on Labor, Health and Human Services, Education, and Related Agencies will hold a hearing on the FY 2007 budget for President Bush's American Competitiveness Agenda. Location: Room 2358, Rayburn Building.

MOVED TO MARCH 14. 10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "Wireless Issues / Spectrum Reform". See, notice. Press contact: Melanie Alvord (Stevens) at 202 224-8456, Aaron Saunders (Stevens) at 202 224-3991, or Andy Davis (Inouye) at 202 224-4546. The hearing will be webcast by the SCC. Location: Room 562, Dirksen Building.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "Voice over Internet Protocol". See, notice. Press contact: Melanie Alvord (Stevens) at 202 224-8456, Aaron Saunders (Stevens) at 202 224-3991, or Andy Davis (Inouye) at 202 224-4546. The hearing will be webcast by the SCC. Location: Room 562, Dirksen Building.

12:00 NOON. The Federal Communications Bar Association's (FCBA) Wireless Committee will host a lunch. The topic will be "Consumer Litigation in the Wireless Industry". The speakers will be Laura Buckland (T-Mobile USA), Sue Haller (Sprint), and Michael Altschul (CTIA). The price to attend is $15. Registrations and cancellations are due by 12:00 NOON on February 28. See, registration form [PDF]. Location: Sidley Austin, 1500 K Street, 6th Floor.

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