9/4. The House approved HR 694 [LOC | WW], the "Minority Serving Institution Digital and Wireless Technology Opportunity Act of 2007" without amendment by a vote of 331-59. See, Roll Call No. 847. All of the votes against the bill were cast by Republicans.

This bill would amend 15 U.S.C. § 3704 to create at the Department of Commerce (DOC) a grant program titled the "Minority Serving Institution Digital and Wireless Technology Opportunity Program". Its purpose would be to assist eligible institutions (minority serving institutions) in acquiring and using "digital and wireless networking technologies to improve the quality and delivery of educational services".

The bill would authorize the appropriation of $250,000,000 for fiscal year 2008, and "such sums as may be necessary for each of the fiscal years 2009 through 2012".

Similar bills have been considered in the House in prior Congresses, without becoming law. See, for example, HR 2183 (108th Congress), the "Minority Serving Institution Digital and Wireless Technology Opportunity Act". See also, stories titled "Rep. Forbes Introduces Bill to Provide Grants for Digital and Wireless Technology for MSIs" in TLJ Daily E-Mail Alert No. 669, May 29, 2003; and "House Science Committee Holds Hearing on MSI Tech Grant Bill" in TLJ Daily E-Mail Alert No. 695, July 10, 2003.

On June 27, 2007, the Senate Commerce Committee (SCC) approved the related Senate bill, S 1650 [LOC | WW], the "Max Cleland Minority Serving Institution Digital and Wireless Technology Opportunity Act". See, SCC release and story titled "Senate Commerce Committee Again Approves Bill to Create MSI Tech Grant Bill" in TLJ Daily E-Mail Alert No. 1,604, June 29, 2007.

The Senate has also long considered MSI tech bills. S 1650 is the 110th Congress's version of S 432 (109th Congress), the "Minority Serving Institution Digital & Wireless Technology Opportunity Act of 2005", and S 196 (108th Congress). Former Sen. George Allen (R-VA) was the sponsor of earlier versions of the bill in the Senate. He lost his bid for re-election in 2006. Former Sen. Max Cleland (D-GA) lost his bid for re-election in 2002. He was the sponsor of an even earlier version of the bill, S 414 (107th Congress), the "NTIA Digital Network Technology Program Act".

8/21. The Federal Communications Commission's (FCC) Office of General Counsel (OGC) and the Department of Justice (DOJ) filed their brief [79 pages in PDF] with the U.S. Court of Appeals (DCCir) in American Radio Relay League v. FCC, a petition for review of a final order of the FCC pertaining to broadband over power line (BPL). Oral argument before the Court of Appeals is scheduled for October 23, 2007.

The American Radio Relay League (ARRL) represents amateur radio operators, who complain about the interference to their operations caused by BPL operations. The FCC has issued rules allowing, and regulating, Access BPL operations as part of its wider attempt to promote the deployment of more broadband internet access platforms to compete with the broadband services offered by cable and phone companies. The ARRL challenges the FCC's order authorizing unlicensed Access BPL operations under Part 15 of its rules.

The FCC's brief provides a detailed history of the FCC's proceedings, and then defends the rules adopted by the FCC.

The FCC issued a Notice of Inquiry (NOI) in 2003, and then a Notice of Proposed Rulemaking (NPRM) in February of 2004.  The FCC released the text [38 pages in PDF] of the NPRM on February 23, 2004.

The FCC promulgated its BPL rules in its Report and Order [86 pages in PDF] adopted on October 14, 2004, and released on October 28, 2004. This R&O established technical standards, operating restrictions and measurement procedures for Access BPL to minimize instances of harmful interference and to facilitate the resolution of such interference where it might occur.

The October 2004 R&O is FCC 04-245 in ET Docket No. 04-37 and ET Docket No. 03-104. See also, story titled "FCC Adopts BPL Report and Order" in TLJ Daily E-Mail Alert No. 997, October 15, 2004, and story titled "FCC Adopts Broadband Over Powerline NPRM" in TLJ Daily E-Mail Alert No. 836, February 13, 2004.

On August 3, 2006, the FCC adopted a Memorandum Opinion and Order (MO&O) that responded to petitions for reconsideration of the rules adopted in the October 2004 rules. That MOO did not make significant changes to the 2004 R&O. That MOO is FCC 06-113 in ET Docket Nos. 04-37 and 03-104. See also, story titled "FCC Adopts MOO Regarding BPL Systems" in TLJ Daily E-Mail Alert No. 1,424, August 3, 2006.

On November 3, 2006, the FCC adopted a MO&O that declares that BPL enabled internet access service is an information service. See, story titled "FCC Declares that BPL is an Information Service" in TLJ Daily E-Mail Alert No. 1,482, November 3, 2006. That item is FCC 06-165 in WC Docket No. 06-10.

This case is American Radio Relay League, Inc. v. FCC and USA, U.S. Court of Appeals for the District of Columbia, App. Ct. No. 06-1343.

There is a bill in the Senate that could provide some relief for amateur radio operators. On June 14, 2007, Sen. Mark Pryor (D-AR) introduced S 1629 [LOC | WW], the "Emergency Amateur Radio Interference Protection Act of 2007".

This bill would require the FCC to conduct a study. It also sets standards for this study. It would then require the FCC to submit a report within 90 days to the House and Senate Commerce Committees "of the interference potential of systems for the transmission of broadband Internet services over power lines".

The bill also provides that this report must include "Options for new or improved rules related to the transmission of BPL service that, if implemented, may prevent harmful interference to public safety and other radio communications systems."

The bill is cosponsored by Sen. Mike Crapo (R-ID). It has not yet received a hearing.

9/4. The Government Accountability Office (GAO) released a report [167 pages in PDF] titled "Homeland Security: U.S. Visitor and Immigrant Status Program’s Long-standing Lack of Strategic Direction and Management Controls Needs to Be Addressed".

The Department of Homeland Security's (DHS) U.S. Visitor and Immigrant Status Indicator Technology (US-VISIT) program is intended to collect, maintain, and share information on foreign nationals who enter and exit the U.S.

The GAO has previously released reports critical of the DHS's implementation of this program. The just released report states that the "DHS has had ample opportunity to address these many issues, but it has not."

"As a result, there is no reason to expect that its newly launched exit endeavor, for example, will produce results different from past endeavors -- namely, DHS will not have an operational exit solution despite expenditure plans allocating about a quarter of a billion dollars to various exit activities."

It continues that "on the basis of past efforts, there is no reason to believe that the program’s disproportionate investment in management-related activities represents a prudent and warranted course of action. All told, this means that needed improvements in US-VISIT program management practices are long overdue. Both the legislative conditions and our open recommendations are aimed at accomplishing these improvements, and they need to be addressed quickly and completely. Thus far, they have not been, and the reasons that they have not are unclear."

This report also recommends that the DHS "perform a privacy impact analysis" of the US VISIT program.

Also, on September 19, 2007, the Department of Homeland Security's (DHS) Data Privacy and Integrity Advisory Committee will meet. One of the items on the agenda is the US VISIT program. See, notice in the Federal Register, September 4, 2007, Vol. 72, No. 170, at Pages 50686-50687.

9/4. The U.S. Court of Appeals (9thCir) issued its opinion [58 pages in PDF] in McKenzie v. PeaceHealth, vacating the key parts of the judgment of the District Court, and rejecting its analysis, as well as that of the 3rd Circuit en banc in LePage's v. 3M.

Introduction. This is an antitrust dispute between hospitals regarding health care services. However, since the dispute centers around bundling of services at discount prices, which is also characteristic of large companies with large market shares in the telecommunications and information technology sectors, this case may be of interest to telecom and tech sector companies, and the companies and consumers with whom they do business.

In short, the Court of Appeals vacated the jury's verdict in favor of McKenzie on the attempted monopolization, price discrimination, and tortious interference claims. It also vacated the District Court's summary judgment in favor of PeaceHealth on the tying claim. It also vacated the District Court's award of attorneys' fees, costs, and expenses. Finally, it remanded for further proceedings.

More to the point, this Court of Appeals (the 9th Circuit) rejected the approach to bundled discounts taken by the District Court, and the approach to bundled rebates taken by the 3rd Circuit in its en banc opinion [PDF] in 2003 in LePage's v. 3M, upon which the District Court relied. The 9th Circuit adopted a cost based standard for bundling discounts.

One hospital company, formerly known as McKenzie, filed a complaint against another hospital company, known as PeaceHealth, alleging, among other things, a violation of Section 2 of the Sherman Act in connection with PeaceHealth's offering to insurers of bundled discounts. While there are a number of issues on appeal in this case, the application of Section 2 to bundled discounts may have far reaching affects for the telecom and tech sectors, as well as health care.

Telecom companies are providing consumers an ever wider array of services and products. One company might offer a triple play of voice, broadband, and video. Companies are also bundling electronic devices with services. It is common for tech and telecom companies to offer bundles, and at a total price for the bundle that is lower than the sum of the prices for the components of the bundle, when purchased one by one.

Even though this is a health care case, the Court of Appeals wrote in a footnote that "in the telecommunications field, it is common for companies to offer not only phone service, but also Internet access and television service, and many of these companies offer bundled discounts to customers who purchase their entire package".

Companies use discounted bundles to compete with other companies. Competition benefits. Consumers benefit too from lower prices.

However, there is an opportunity for anti-competitive conduct when several conditions are present. For example, if there are two or just a few providers, their bundled product and/or services lines are not the same, and one company has market power with respect to one product or service that it offers as part of a discounted bundle, this company might hypothetically be able to abuse its market power via bundled discounts.

Telecom and IT companies are already offering bundled discounts. Yet, some telecom and IT sectors are characterized by consolidation, overlapping but not identical product mixes, and companies with market power with respect to some products or services. This is increasing the potential for these conditions to be met.

This opinion reflects an attempt by one Court of Appeals to set a precedent that does impose antitrust liability upon the rare anti-competitive bundled discounts, while not also enabling antitrust plaintiffs to prevail in Section 2 cases where the complained of conduct is actually pro-competitive. The approaches of the District Court in this case, and the Third Circuit en banc opinion in LePage's, arguably, and theoretically, enable plaintiffs to prevail against some providers of bundled discounts in the absence of anti-competitive conduct.

However, this 58 page opinion, as long and detailed as it is, recognizes that the topic is complex, that the underlying economic analysis is still developing, and that it will take some time for this area of antitrust law to "percolate" in the courts. This opinion rejects LePage's, offers the foundation for a cost based approach, but leaves many questions unanswered.

Statute and Precedent. Section 2 of Sherman Act, which is codified at 15 U.S.C. § 2, is the applicable statute. However, it provides little, if any, guidance.

Section 2 provides, in part, that "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine ..."

Rather, the law in this areas derives from economic analysis of bundled discounts, and courts' application of this analysis on a case by case basis to build up a body of judicially created principles.

The present opinion follows, and rejects, LePage's, an unfortunate opinion of the U.S. Court of Appeals (3rdCir) applying Section 2 to bundling practices. (It is also reported at 324 F.3d 141.)

That case was a bundled rebate case brought by LePage's against 3M involving 3M's multiple product lines of transparent adhesive tape. LePage's alleged that 3M unlawfully maintained a monopoly in the market for transparent tape, in violation of Section 2 of the Sherman Act through the use of its bundled rebate program for retailers that sold 3M products. The trial jury returned a verdict for LePage's on the monopoly maintenance count. The District Court entered judgment. The divided three judge panel of the U.S. Court of Appeals (3rdCir) reversed the District Court's judgment on that count. However, an en banc panel of the Court of Appeals granted rehearing, and affirmed the judgment of the District Court on the monopoly maintenance count.

The 3rd Circuit held that below cost pricing and a probability of recoupment should not be required when the defendant is a monopolist whose behavior will be unconstrained by the market after it eliminates its lone rival.

The Supreme Court of the U.S. (SCUS) denied certiorari.

In addition, the Office of the Solicitor General filed an amicus brief urging the SCUS to deny certiorari. It wrote that "although the business community and consumers would benefit from clear, objective guidance on the application of Section 2 to bundled rebates, this case does not present an attractive vehicle for this Court to attempt to provide such guidance. Furthermore, there is no pressing need for the Court to address the matter at this time. While bundled rebates may be a common business practice, it is not clear that monopolists commonly bundle rebates for products over which they have monopolies with products over which they do not. The United States submits that, at this juncture, it would be preferable to allow the case law and economic analysis to develop further and to await a case with a record better adapted to development of an appropriate standard."

The views of the Antitrust Modernization Commission (AMC) are also pertinent. The AMC has completed its study, released its report, and terminated. See, story titled "Antitrust Modernization Commission Releases Report", story titled "AMC Addresses Innovation" and story titled "AMC Seeks End to Duplicative FCC Antitrust Merger Reviews" in TLJ Daily E-Mail Alert No. 1,560, April 4, 2007.

The AMC's views are addressed by the Court of Appeals in the just released opinion. The AMC recommended that "Courts should adopt a three-part test to determine whether bundled discounts or rebates violate Section 2 of the Sherman Act. To prove a violation of Section 2, a plaintiff should be required to show each one of the following elements (as well as other elements of a Section 2 claim): (1) after allocating all discounts and rebates attributable to the entire bundle of products to the competitive product, the defendant sold the competitive product below its incremental cost for the competitive product; (2) the defendant is likely to recoup these short-term losses; and (3) the bundled discount or rebate program has had or is likely to have an adverse effect on competition." (Parentheses in original.)

Litigants. McKenzie and PeaceHealth were the only two providers of hospital care in Lane County, in the state of Oregon.

The Court of Appeals summarized that the "relevant market in this case is the market for primary and secondary acute care hospital services in Lane County. Primary and secondary acute care hospital services are common medical services like setting a broken bone and performing a tonsillectomy. Some hospitals also provide what the parties call “tertiary care,” which includes more complex services like invasive cardiovascular surgery and intensive neonatal care."

McKenzie provided primary and secondary acute care in one hospital, but did not provide tertiary care. PeaceHealth was much larger, operated three hospitals, and provided primary and secondary acute care, as well as tertiary care. PeaceHealth offered health insurance companies bundled and discounted primary, secondary, and tertiary services.

McKensie was a financially failing company. It has since merged with another hospital company.

District Court. McKenzie filed a complaint in U.S. District Court (DOre) against PeaceHealth alleging federal law claims of monopolization, attempted monopolization, conspiracy to monopolize, tying, and exclusive dealing, and state law claims of price discrimination and intentional interference with prospective economic advantage.

In formulating a jury instruction on anti-competitive effects, the District Court followed the 3d Circuit's en banc opinion in LePage's.

The jury instruction contained the following: "plaintiff ... contends that defendant has bundled price discounts for its primary, secondary, and tertiary acute care products and that doing so is anticompetitive. Bundled pricing occurs when price discounts are offered for purchasing an entire line of services exclusively from one supplier. Bundled price discounts may be anti-competitive if they are offered by a monopolist and substantially foreclose portions of the market to a competitor who does not provide an equally diverse group of services and who therefore cannot make a comparable offer."

Notably, this instruction contains no requirement that the jury engage in any cost analysis.

In addition, before commencement of the trial, the District Court granted summary judgment to PeaceHealth on McKenzie's tying claim. Then, the trial jury rendered a verdict in favor of PeaceHealth on McKenzie's claims of monopolization, conspiracy to monopolize, and exclusive dealing. It rendered a verdict in favor of McKenzie on McKenzie's claims of attempted monopolization, price discrimination, and tortious interference.

The jury awarded McKenzie $5.4 Million in damages, which the District Court trebled. The District Court also awarded McKenzie $1,583,185.57 in attorneys’ fees, costs, and expenses.

The present appeal and cross-appeal followed. In addition, the Court of Appeals solicited and received amicus curiae briefs. Microsoft, Verizon, AT&T and Visa all participated as amici.

Court of Appeals. The Court of Appeals addressed in detail the economic theories, and effects upon competition and consumer welfare, of bundled discounts. It wrote that "it is possible, at least in theory, for a firm to use a bundled discount to exclude an equally or more efficient competitor and thereby reduce consumer welfare in the long run."

"For example, a competitor who sells only a single product in the bundle (and who produces that single product at a lower cost than the defendant) might not be able to match profitably the price created by the multi-product bundled discount." (Parentheses in original.)

"This is true even if the post-discount prices for both the entire bundle and each product in the bundle are above the seller’s cost." The Court of Appeals continued that "a bundled discounter can exclude rivals who do not sell as great a number of product lines without pricing its products below its cost to produce them. Thus, a bundled discounter can achieve exclusion without sacrificing any short-run profits."

"McKenzie asserts it could provide primary and secondary services at a lower cost than PeaceHealth. Thus, the principal anticompetitive danger of the bundled discounts offered by PeaceHealth is that the discounts could freeze McKenzie out of the market for primary and secondary services because McKenzie ... does not provide the same array of services as PeaceHealth and therefore could possibly not be able to match the discount PeaceHealth offers insurers."

The Court of Appeals concluded that "bundled discounts, while potentially procompetitive by offering bargains to consumers, can also pose the threat of anticompetitive impact by excluding less diversified but more efficient producers. These considerations put into focus this problem: How are we to discern where antitrust law draws the line between bundled discounts that are procompetitive and part of the normal rough-and-tumble of our competitive economy and bundled discounts, offered by firms holding or on the verge of gaining monopoly power in the relevant market, that harm competition and are thus proscribed by § 2 of the Sherman Act?"

After a lengthy analysis of the purposes of antitrust law, and the economics of bundling discounts, the Court of Appeals determined to draw the line differently from the 3rd Circuit.

It held that "Given the endemic nature of bundled discounts in many spheres of normal economic activity, we decline to endorse the Third Circuit’s definition of when bundled discounts constitute the exclusionary conduct proscribed by § 2 of the Sherman Act. Instead, we think the course safer for consumers and our competitive economy to hold that bundled discounts may not be considered exclusionary conduct within the meaning of § 2 of the Sherman Act unless the discounts resemble the behavior that the Supreme Court in Brooke Group identified as predatory. Accordingly, we hold that the exclusionary conduct element of a claim arising under § 2 of the Sherman Act cannot be satisfied by reference to bundled discounts unless the discounts result in prices that are below an appropriate measure of the defendant’s costs." (Footnotes omitted.)

See, the SCUS's 1993 opinion in Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., which is also reported at 509 U.S. 209.

The Court of Appeals continued that the "next question we must address is how we define the appropriate measure of the defendant's costs in bundled discounting cases and how we determine whether discounted prices fall below that mark."

The Court of Appeals rejected the aggregate discount rule, advocated by AT&T and others. (See, summary of amicus curiae briefs below). The Court explained that "A competitor who produces fewer products than the defendant but produces the competitive product at or below the defendant's cost to produce that product may nevertheless be excluded from the market because the competitor cannot match the discount the defendant offers over its numerous product lines. This possibility exists even when the defendant’s prices are above cost for each individual product and for the bundle as a whole." Thus, "Under a discount aggregation rule, anticompetitive bundled discounting schemes that harm competition may too easily escape liability."

Instead, the Court of Appeals adopted a "discount attrition" standard. It wrote that "Under this standard, the full amount of the discounts given by the defendant on the bundle are allocated to the competitive product or products. If the resulting price of the competitive product or products is below the defendant’s incremental cost to produce them, the trier of fact may find that the bundled discount is exclusionary for the purpose of § 2. This standard makes the defendant’s bundled discounts legal unless the discounts have the potential to exclude a hypothetical equally efficient producer of the competitive product." (Footnote omitted.)

The Court of Appeals wrote that another advantage of this "discount attribution standard" is that it "provides clear guidance for sellers that engage in bundled discounting practices. A seller can easily ascertain its own prices and costs of production and calculate whether its discounting practices run afoul of the rule we have outlined."

However, it also conceded that "liability under the discount attribution standard has the potential to sweep more broadly than under the aggregate discount rule ..."

The Court of Appeals also wrote that there is "limited judicial experience with bundled discounts", so it would be best to "allow these difficult issues to further percolate in the lower courts". So, it concluded that "Pending further judicial and academic inquiry into the prevalence of anticompetitive bundled discounts, we think it preferable to allow plaintiffs to challenge bundled discounts if those plaintiffs can prove a defendant's bundled discounts would have excluded an equally efficient competitor."

The Court of Appeals summarized: "the primary anticompetitive danger posed by a multi-product bundled discount is that such a discount can exclude a rival is who is equally efficient at producing the competitive product simply because the rival does not sell as many products as the bundled discounter. Thus, a plaintiff who challenges a package discount as anticompetitive must prove that, when the full amount of the discounts given by the defendant is allocated to the competitive product or products, the resulting price of the competitive product or products is below the defendant’s incremental cost to produce them. This requirement ensures that the only bundled discounts condemned as exclusionary are those that would exclude an equally efficient producer of the competitive product or products."

The Court of Appeals then proceeded to the next question, the "appropriate measure of incremental costs in a bundled discounting case".

It observed that "In single product predatory pricing cases, the appropriate measure of incremental costs is an open question in this circuit. ... The Supreme Court has likewise refused to decide the matter."

The Court of Appeals held that "the appropriate measure of costs for our cost-based standard is average variable cost."

That is, variable costs are those that vary with the amount of output, as opposed to fixed costs, which do not. A firm's total costs are the sum of fixed and variable costs. The Court of Appeals suggested that the best measurement would be the marginal cost (that is, "the cost to produce one additional unit and the price that would obtain in the market under conditions of perfect competition") but that this cannot readily be inferred, so average variable cost should be used as the available surrogate for marginal cost.

Hence, with respect to bundled discounts, the Court of Appeals concluded with this. "In summary, we hold the following: To prove that a bundled discount was exclusionary or predatory for the purposes of a monopolization or attempted monopolization claim under § 2 of the Sherman Act, the plaintiff must establish that, after allocating the discount given by the defendant on the entire bundle of products to the competitive product or products, the defendant sold the competitive product or products below its average variable cost of producing them. The district court’s jury instruction on the attempted monopolization claim, which built on the holding of LePage’s that we have rejected, thus contained an error of law." (Footnote omitted.)

The opinion then goes on to address at length the issues of harmless error, price discrimination, and intentional interference with prospective economic advantage.

The Court of Appeals also addressed the District Court's summary judgment for PeaceHealth on McKenzie’s claim that PeaceHealth illegally tied primary and secondary services to its provision of tertiary services in violation of § 1 of the Sherman Act, which is codified at 15 U.S.C. § 1. The Court of Appeals vacated.

Amicus Curiae Briefs. The Court of Appeals received nine amicus curiae briefs. Verizon and Caterpillar filed one, Microsoft filed another, and Pacific Bell and Visa filed a third. A group of five law professors also filed a brief.

The professors argued in their brief [26 pages in PDF] that "Bundled discounts are ubiquitous in our national economy and are almost always procompetitive". They wrote that "the Court should require plaintiff challenging a bundled discount scheme to show -- at minimum -- that the competitive product was priced below average variable cost after discounts are reallocated to the competitive product from non-competitive products."

They added that "care should be taken in framing liability rules for the rare instances were bundled discounts could be anticompetitive. Amici submit that bundled discounts should never be unlawful unless, at minimum, the seller has charged a below-cost price in the competitive market after discounts given in the non-competitive market are reallocated to the competitive market. In determining what costs should be included in ascertaining whether the seller priced below cost, Amici urge the adoption of the average variable cost test."

The five professors were Daniel Crane (Cardozo School of Law), Thomas Lambert (University of Missouri School of Law), Thomas Morgan (George Washington University School of Law), Daniel Sokol (University of Wisconsin School of Law), and Richard Squire (Fordham Law School).

Pacific Bell (with is now part of AT&T) and Visa jointly filed an amicus brief [34 pages in PDF] in which they disclosed that "AT&T frequently bundles its services and offers them at prices discounted from their prices if purchased separately. These bundled discounts are sought after by AT&T's customers and play an important role in fostering competition in the rapidly evolving communications industry."

They urged the Court of Appeals to adopt the "aggregate rule", which "measures anti-competitive effect by examining whether the discounted price of the entire bundle exceeds the monopoly firm's cost of producing the entire bundle", rather than the "conflated discount rule", which "compares the price of a single good or service in the bundle (the same one produced by the plaintiff-rival) reduced by the discount for the entire bundle with the monopoly firm's cost of producing that individual product or service". (Parentheses in original)

They concluded that "This Court should rule that a plaintiff challenging bundled discounts under the Sherman Act must prove (1) that the aggregate price of the bundle is less than the defendants' cost of producing the bundle and (2) that the defendant has a dangerous probability of recouping it losses from those below-cost sales."

Verizon and Caterpillar wrote in their amicus brief [PDF] the 3rd Circuit's en banc opinion in LePage's "poses the risk that antitrust liability for bundled pricing by dominant firms will hinge on a court's or jury's ad hoc intuitions, unhinged from any reasonable application of antitrust law and economics, discouraging the availability of bundled discounts. Amici and other companies would benefit from use of sensible and predictable rules in this area that do not punish dominant firms because of their ability to offer consumers a broad product line at a discount price." (Footnote omitted.)

This case is Cascade Health Solutions fka McKenzie-Willamette Hospital v. PeaceHealth, et al., U.S. Court of Appeals for the 9th Circuit, App. Ct. Nos. 05-35627, 05-35640, 05-36153, and 05-36202, appeals from the U.S. District Court for the District of Oregon, D.C. No. CV-02-06032-HA, Judge Ancer Haggerty presiding. Judge Ronald Gould wrote the opinion of the Court of Appeals, in which Judges Richard Paez and Johnnie Rawlinson joined.

9/4. The Federal Communications Commission (FCC) released the agenda [4 pages in PDF] for its event scheduled for September 11, 2007, titled "Open Meeting". The FCC Commissioners will announce, and read prepared statements regarding, several actions to be taken by the FCC.

Forbearance Petitions of Broadband Providers. The FCC is scheduled to adopt a Memorandum Opinion and Order (MO&O) regarding requests for forbearance, submitted by AT&T, Verizon and Qwest, pursuant to 47 U.S.C. § 160(c), from Title II and Computer Inquiry requirements with respect to certain broadband services. The relevant FCC proceedings are numbered WC Docket No. 06-125 and WC Docket No. 06-147.

E911 Location Accuracy Rules. The FCC is scheduled to adopt a Report and Order (R&O) regarding the geographic area over which wireless carriers must meet the E911 location accuracy requirements.

This R&O relates to the FCC proceeding titled "Wireless E911 Location Accuracy Requirements" and numbered PS Docket No. 07-114, the FCC proceeding titled "Revision of the Commission's Rules to Ensure Compatibility with Enhanced 911 Emergency Calling Systems" and numbered CC Docket No. 94-102, and the FCC proceeding titled "Association of Public-Safety Communications Officials-International, Inc. Request for Declaratory Ruling; and 911 Requirements for IP-Enabled Service Providers" and numbered WC Docket No. 05-196.

See also, story titled "FCC Extends E911 Location Tracking Rules to Interconnected VOIP" in TLJ Daily E-Mail Alert No. 1,589, May 31, 2007.

800 MHz Band. The FCC is scheduled to adopt a Memorandum Opinion and Order (MO&O) regarding the obligations of licensees involved in 800 MHz band reconfiguration. This proceeding is WT Docket No. 02-55. The FCC is also scheduled to adopt a Public Notice regarding implementation of 800 MHz band reconfiguration.

Video Franchising. The FCC is scheduled to adopt a Second R&O regarding Section 621(a)(1)'s directive that local franchising authorities not unreasonably refuse to award competitive franchises and the application of the FCC's findings in its First R&O to incumbent providers.

Section 621, which is codified at 47 U.S.C. § 541, provides in part that that "A franchising authority may award, in accordance with the provisions of this subchapter, 1 or more franchises within its jurisdiction; except that a franchising authority may not grant an exclusive franchise and may not unreasonably refuse to award an additional competitive franchise".

The FCC adopted its First R&O and Further Notice of Proposed Rulemaking [109 pages in PDF] in this proceeding on December 20, 2006, and released it on March 5, 2007. See, stories titled "FCC Adopts Order Affecting Local Franchising Authorities" in TLJ Daily E-Mail Alert No. 1,510, December 27, 2006, and "FCC Releases Text of Video Franchising Order and Further NPRM" in TLJ Daily E-Mail Alert No. 1,548, March 7, 2007.

This proceeding is titled "Implementation of Section 621(a)(1) of the Cable Communications Policy Act of 1984 as amended by the Cable Television Consumer Protection and Competition Act of 1992" and numbered MB Docket No. 05-311.

Program Access Rules. The FCC is scheduled to adopt a R&O regarding the exclusive contract prohibition in Section 628(c)(2)(D) and modification of the FCC's program access complaint procedures. The FCC is also scheduled to adopt a Notice of Proposed Rulemaking (NPRM) to review its program access rules and to examine programming tying arrangements.

These items relate to the FCC's proceeding titled "Implementation of the Cable Television Consumer Protection and Competition Act of 1992; Development of Competition and Diversity in Video Programming Distribution, Section 628(c)(5) of the Communications Act, Sunset of Exclusive Contract Prohibition" and numbered MB Docket No. 07-29, and its proceeding titled "Review of the Commission's Program Access Rules and Examination of Programming Tying Arrangements".

Must Carry. The FCC is scheduled to adopt a Third R&O and Order and Third Further NPRM regarding mandatory cable carriage of digital broadcast television signals after the conclusion of the digital television (DTV) transition.

This proceeding is titled "Carriage of Digital Television Broadcast Signals, Amendment to Part 76 of the Commission’s Rules" and numbered MB Docket No. 98-120.

See, stories titled "FCC Drops Multicast Must Carry Item" in TLJ Daily E-Mail Alert No. 1,394, June 19, 2006, "FCC Adopts Digital Multicasting Must Carry Order" in TLJ Daily E-Mail Alert No. 1,075, February 11, 2005. See also, story titled "Digital Multicasting Must Carry Developments" in TLJ Daily E-Mail Alert No. 1,073, February 9, 2005.

Antennas in the 10.7 - 11.7 GHz Band. The FCC is scheduled to adopt a Report and Order regarding rules governing the use of smaller antennas by Fixed Service operators in the 10.7 -- 11.7 GHz band. This proceeding is numbered WT Docket No. 07-54 and RM-11043.

This event is scheduled for 9:30 AM on Tuesday, September 11, 2007 in the FCC's Commission Meeting Room, Room TW-C305, 445 12th Street, SW. The event will be webcast by the FCC. The FCC does not always take up all of the items on its published program. The FCC sometimes adds items to the program without providing the "one week" notice required 5 U.S.C. § 552b. The FCC frequently fails to start its events and the scheduled time, and frequently postpones or cancels its events without notice. The FCC usually does not release at its events copies of the items that it adopts at its events. The FCC has not always written the items that it adopts at the time that it announces that it has adopted them.

The House will meet at 10:00 AM for legislative business. See, Rep. Hoyer's calendar [PDF].

10:00 AM. The House Homeland Security Committee (HHSC) will hold a hearing titled "Holding the Department of Homeland Security accountable for Security Gaps". Michael Chertoff (Secretary of Homeland Security) will testify. This hearing will be webcast by the HHSC. For more information, contact Dena Graziano or Adam Comis at 202-225-9978. Location: Room 311, Cannon Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Digeo, Inc. v. Audible, Inc., App. Ct. No. 2007-1133, an appeal from the U.S. District Court (WDWash), D.C. No. C05-464JLR, a patent case involving digital music. Location: Courtroom 201, 717 Madison Place, NW.

10:05 AM. The House Judiciary Committee (HJC) will meet to mark up a resolution establishing the Task Force on Antitrust and Competition Policy. See, notice. Location: Room 2141, Rayburn Building.

10:15 AM. The House Judiciary Committee (HJC) will hold a hearing titled "Hearing on Warrantless Surveillance and the Foreign Intelligence Surveillance Act: The Role of Checks and Balances in Protecting Americans’ Privacy Rights". See, notice. Location: Room 2141, Rayburn Building.

2:30 PM. Sen. Arlen Specter (R-PA) will hold a news conference regarding the nomination of Leslie Southwick to be a Judge of the U.S. Court of Appeals (5thCir). Location: Room 124, Dirksen Building.

Federal Communications Commission's (FCC) self imposed deadline to conclude its rulemaking and release an order in its video franchising proceeding. See, Report and Order and Further Notice of Proposed Rulemaking [109 pages in PDF], at ¶ 140. This item is FCC 06-180 in MB Docket 05-311. This FNPRM pertains to extending the requirements of the order to incumbent cable operators.

9:00 AM - 5:00 PM. Day two of a three day meeting of the Architectural and Transportation Barriers Compliance Board's (ATBCB) Telecommunications and Electronic and Information Technology Advisory Committee (TEITAC). See, notice in the Federal Register, August 23, 2007, Vol. 72, No. 163, at Pages 48252-48253. For more information, contact Timothy Creagan at 202-272-0016 or creagan at access dash board dot gov. Location: National Science Foundation, Room 555, 4121 Wilson Boulevard, Stafford Place II, Arlington, VA.

The House will meet at 10:00 AM for legislative business. See, Rep. Hoyer's calendar [PDF].

8:30 AM - 5:15 PM. Day one of a two day meeting of the Department of Commerce's (DOC) National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB). The agenda includes "Computer Security Division (CSD) Update", "NIST Metrics Projects Briefing", "NIST Research Priorities for the Future", "Best Practices in Security at NSA", "Telecommuting Security Issues", "OMB Privacy Update", "Privacy Technology Update", and "ISPAB Work Plan". See, notice in the Federal Register, August 24, 2007, Vol. 72, No. 164, at Page 48619. Location: Room 400, George Washington University Cafritz Conference Center, 800 21st St., NW.

9:00 AM - 5:00 PM. Day three of a three day meeting of the Architectural and Transportation Barriers Compliance Board's (ATBCB) Telecommunications and Electronic and Information Technology Advisory Committee (TEITAC). See, notice in the Federal Register, August 23, 2007, Vol. 72, No. 163, at Pages 48252-48253. For more information, contact Timothy Creagan at 202-272-0016 or creagan at access dash board dot gov. Location: National Science Foundation, Room 555, 4121 Wilson Boulevard, Stafford Place II, Arlington, VA.

9:30 AM. The U.S. International Trade Commission (USITC) will hold a hearing in its proceeding titled "China: Description of Selected Government Practices and Policies Affecting Decision-making in the Economy". This is Investigation No. 332-492. See, USITC release. Press contact: Peg O'Laughlin at 202-205-1819. Location: USITC, Main Hearing Room, 500 E St., SW.

10:00 AM. The House Homeland Security Committee (HHSC) will hold a hearing titled "Turning Spy Satellites on the Homeland: the Privacy and Civil Liberties Implications of the National Applications Office". The witnesses will be Charles Allen (DHS Chief Intelligence Officer), Hugo Teufel (DHS Chief Privacy Officer), Dan Sutherland (DHS Civil Rights and Civil Liberties Officer). This hearing will be webcast by the HHSC. For more information, contact Dena Graziano or Adam Comis at 202-225-9978. Location: Room 311, Cannon Building.

10:00 AM. The Senate Judiciary Committee (SJC) may hold an executive business meeting. The agenda includes consideration of S 1845 [LOC | WW], an untitled bill that would limit communications between the staffs of the White House and the Department of Justice (DOJ). The agenda also includes consideration of Richard Jones to be a Judge of the U.S. District Court (WDWash). It also includes consideration of Jennifer Elrod to be a Judge of the U.S. Court of Appeals (5thCir). The SJC frequently fails to obtain a quorum for its meetings. The SJC rarely follows the agendas for its meetings. Location: Room 226, Dirksen Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Elbex Video, Ltd. v. Sensormatic Electronics Corp., App. Ct. No. 2007-1097, an appeal from the U.S. District Court (SDNY). Location: Courtroom 201, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Research Corporation Technologies, Inc. v. Microsoft Corporation, App. Ct. No. 2006-1275, an appeal from the U.S. District Court (DAriz). Location: Courtroom 203, 717 Madison Place, NW.

12:00 NOON - 1:30 PM. The National Economists Club (NEC) will host a lunch titled "U.S. Productivity: Past, Present and Future". The speaker will be Robert Atkinson (head of the Information Technology and Innovation Foundation). Location: Chinatown Gardens Restaurant, 618 H St.,  NW.

3:00 PM. The House Rules Committee will meet to adopt a rule for consideration of HR 1908 [LOC | WW] the "Patent Reform Act of 2007". Location: Room H-313, Capitol Building.

Deadline to submit comments to the Department of Education (DOE) regarding its notice of proposed rulemaking (NPRM) regarding its regulations for the Academic Competitiveness Grant (ACG) and National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) programs. See, notice in the Federal Register, August 7, 2007, Vol. 72, No. 151, at Pages 44050-44065.

The House will meet at 9:00 AM for legislative business. The House may consider HR 1908 [LOC | WW] the "Patent Reform Act of 2007". See, Rep. Hoyer's calendar [PDF].

8:00 AM - 4:15 PM. Day two of a two day meeting of the Department of Commerce's (DOC) National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB). The agenda includes "Computer Security Division (CSD) Update", "NIST Metrics Projects Briefing", "NIST Research Priorities for the Future", "Best Practices in Security at NSA", "Telecommuting Security Issues", "OMB Privacy Update", "Privacy Technology Update", and "ISPAB Work Plan". See, notice in the Federal Register, August 24, 2007, Vol. 72, No. 164, at Page 48619. Location: Room 400, George Washington University Cafritz Conference Center, 800 21st St., NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Systems Division, Inc. v. Teknek, App. Ct. No. 2007-1162. Location: Courtroom 203, 717 Madison Place, NW.

12:00 NOON - 2:00 PM. The Architectural and Transportation Barriers Compliance Board will hold meetings on September 5-7, 2007. Its Electronic and Information Technology Ad Hoc Committee will meet on September 7 at 12:00 NOON. See, notice in the Federal Register, August 20, 2007, Vol. 72, No. 160, at Page 46438. Location: Madison Hotel, 1177 15th St., NW.

12:15 - 1:30 PM. The Federal Communications Bar Association's (FCBA) Cable Practice and Mass Media Committees will host a brown bag lunch titled "Consumers, Cable Operators, Broadcasters, Who's DTV Transition Is It?". The speakers will be Diane Burstein (NCTA) and David Donovan (Association for Maximum Service Television). For Further Information: Contact William Cook at William_Cook at aporter dot com, Steven Morris at Smorris at NCTA dot com, Jessica Rosenworcel at Jessica_Rosenworcel at commerce dot senate dot gov, or Ryan Wallach at rwallach at willkie dot com. RSVP to Ryan Wallach. Location: Willkie Farr & Gallagher, Suite 200, 1875 K St., NW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response its Public Notice [32 pages in PDF] regarding the competitive bidding procedures for the 700 MHz band auction. The FCC released the Public Notice on August 17, 2007. It is DA 07-3415 in AU Docket No. 07-157. This auction is Auction No. 73. It is scheduled to commence on January 16, 2008. See, notice in the Federal Register, August 23, 2007, Vol. 72, No. 163, at Pages 48272-48285. See also, story titled "FCC Adopts 700 MHz Band Order" in TLJ Daily E-Mail Alert No. 1,619, July 31, 2007, and story titled "FCC Sets Date for 700 MHz Auction" in TLJ Daily E-Mail Alert No. 1,624, August, 20, 2007.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its Draft Special Publication 800-111 [37 pages in PDF] titled "Guide to Storage Encryption Technologies for End User Devices".

TIME CHANGE. 9:00 - 11:00 AM. The Department of Commerce's (DOC) Bureau of Industry and Security's (BIS) Deemed Export Advisory Committee will meet in open session. See, original notice in the Federal Register, August 16, 2007, Vol. 72, No. 158, at Page 46035, and revised notice in the Federal Register, August 27, 2007, Vol. 72, No. 165, at Page 48985. For more information, contact Yvette Springer at 202-482-2813. Location: DOC, main auditorium Herbert Hoover Building, 14th St. & Pennsylvania Ave., NW.

11:00 AM - 4:30 PM. The Department of Commerce's (DOC) Bureau of Industry and Security's (BIS) Deemed Export Advisory Committee will meet in closed session. See, notice in the Federal Register, August 27, 2007, Vol. 72, No. 165, at Page 48985. For more information, contact Yvette Springer at 202-482-2813. Location: __?

2:00 - 3:30 PM. The U.S. Chamber of Commerce's Coalition Against Counterfeiting and Piracy (CACP) will meet. For more information, contact counterfeiting at uschamber dot com or 202-463-5500. Location: U.S. Chamber, 1615 H St., NW.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding Draft Federal Information Processing Standard (FIPS) Publication 198-1 [11 pages in PDF], titled "The Keyed-Hash Message Authentication Code (HMAC)".

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding Draft Federal Information Processing Standard (FIPS) Publication 180-3 [29 pages in PDF], titled "Secure Hash Standard (SHS)".

Deadline to submit comments to the Securities and Exchange Commission (SEC) in response proposal to change its rules to provide two exemptions from the registration requirements of the Securities Exchange Act of 1934 for compensatory employee stock options. See, notice in the Federal Register, July 10, 2007, Vol. 72, No. 131, at Pages 37607-37624.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding proposed rules to ensure bidirectional compatibility of cable television systems and consumer electronics equipment. The NPRM also seeks comment on whether these rules should apply to non-cable Multichannel Video Programming Distributors (MVPDs) and whether there are technological solutions that are network agnostic and deployable across all MVPD platforms, including DBS, IP, and QAM/IP. The FCC adopted this item on June 27, 2007, and released the text on June 29, 2007. It is FCC 07-120 in CS Docket No. 97-80 and PP Docket No. 00-67. See, notice in the Federal Register, July 25, 2007, Vol. 72, No. 142, at Pages 40818-40824.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to the Wireline Competition Bureau's (WCB) notice requesting comments to refresh the record on the issues raised by the FCC's 2004 Further Notice of Proposed Rulemaking (NPRM) regarding its universal service subsidy programs titled "Lifeline" and "Linkup". The WCB issued its notice on March 12, 2007. It is DA 07-1241. The FCC issued its NPRM on June 22, 2004, in WC Docket No. 03-109. See, notice in the Federal Register, July 25, 2007, Vol. 72, No. 142, at Pages 40816-40818.

9:00 AM. The Executive Office of the President's (EOP) Office of Science and Technology Policy's (OSTP) President's Council of Advisors on Science and Technology (PCAST) will meet. The agenda [PDF] includes a panel on nanotechnology and a panel on partnerships between universities and non-government entities in support of research. See, notice in the Federal Register, August 24, 2007, Vol. 72, No. 164, at Pages 48639. Location: Room 100, Keck Center of the National Academies, 500 5th St., NW.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in American Bird Conservancy v. FCC, App. Ct. No. 06-1165. Judges Henderson, Randolph and Brown will preside. Location: Courtroom 22 Annex, Prettyman Courthouse, 333 Constitution Ave., NW.

POSTPONED. 12:15 - 1:45 PM. The Federal Communications Bar Association's (FCBA) Mass Media Practice Committee will host a brown bag lunch regarding the FCC's Media Bureau (MB). The speakers will be Bureau Chief Monica Desai and other representatives of the MB. For more information, contact Kerry Loughney at kerry at fcba dot org. Location: Holland & Knight, Lower Level Conference Room, 2099 Pennsylvania Ave., NW.

12:30 PM. The Association for Competitive Technology (ACT) will host a lunch titled "The Growing Threat to American Competitiveness: Is Antitrust Policy Being Used as a New Form of Protectionism?" The speakers will be Rep. Robert Wexler (D-FL), Robert Atkinson (Information Technology and Innovation Foundation), Steve DelBianco (ACT), and Ronald Cass (Center for the Rule of Law). RSVP to rsvp at actonline dot org or 202-420-7484. Location: Room 2200, Rayburn Building.

6:00 - 9:15 PM. The DC Bar Association will host a continuing legal education (CLE) program titled "Patent Damages: Discovery, Pre-trial and Litigation Strategies". The speakers will be Charles Fish (Time Warner Corporate Patent Group), Clifton McCann (Venable), and Andrew Aitken (Venable). The price to attend ranges from $80 to $115. For more information, call 202-626-3488. See, notice. Location: DC Bar Conference Center, B-1 Level, 1250 H St., NW.

TIME? Day one of a two day meeting of the President's Council of Advisors on Science and Technology (PCAST). The PCAST web site states that this meeting will take place on September 11-12, 2007. Location?

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding changes to its rules that govern the 4.9 GHz band and the Wireless Medical Telemetry Service which shares spectrum. This NPRM is FCC 07-85 in WP Docket No. 07-100. The FCC adopted this NPRM on May 9, 2007, and released it on May 14, 2007. See, notice in the Federal Register, June 13, 2007, Vol. 72, No. 113, at Pages 32582-32589.

Extended deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding Section 612 of the Communications Act, which is codified at 47 U.S.C. § 532, which requires cable operators to set aside channel capacity for commercial use by video programmers unaffiliated with the operator, and Section 616 of the Communications Act, which is codified at 47 U.S.C. § 536, which prohibits a cable operator or other multichannel video programming distributor (MVPD) from requiring a financial interest in any program service as a condition for carriage of such service, from coercing a programmer to grant exclusive carriage rights, or from engaging in conduct that unreasonably restrains the ability of an unaffiliated programming vendor to compete fairly by discriminating against such vendor on the basis of affiliation or nonaffiliation. The FCC adopted this item on March 2, 2007, and released the text on June 15, 2007. This NPRM is FCC 07-18 in MB Docket No. 07-42. See, notice in the Federal Register, July 18, 2007, Vol. 72, No. 137, at Pages 39370-39377, and Public Notice [PDF] (DA 07-3736) extending comment deadlines.

Rosh Hoshana begins at sundown.

8:00 AM. The Information Technology Association of America (ITAA) will host an event titled "2007 Telework Exchange Town Hall Meeting". For more information, contact Mark Uncapher at muncapher at itaa dot org. Location: Ronald Reagan Building & Trade Center.

9:00 AM - 12:00 NOON. The Department of Commerce's (DOC) Measuring Innovation in the 21st Century Economy Advisory Committee will meet. A purpose of this committee is to determine how to quantify the national innovation rate, to measure innovation in a manner similar to the way the Gross Domestic Product (GDP) measures economic output. See, notice in the Federal Register, August 6, 2007, Vol. 72, No. 150, at Pages 43628-43629. Location: Auditorium, DOC, 1401 Constitution Ave., NW.

12:00 NOON. The Law Library of Congress will host a panel discussion titled "National Security and the Constitution". The speakers will be Louis Fisher (Library of Congress), Brian McKeon (Chief Counsel for the Senate Foreign Relations Committee), and Michael O’Neill (Minority Chief Counsel and Staff Director for the Senate Judiciary Committee). The event is free, but reservations are required. Contact Alisa Carrel at acar at loc dot gov. Location: Law Library’s Multimedia Room, Room 240, James Madison Building, 101 Independence Ave., SE.

TIME? Day two of a two day meeting of the President's Council of Advisors on Science and Technology (PCAST). The PCAST web site states that this meeting will take place on September 11-12, 2007. Location?

8/31. The Consumer Federation of America (CFA), Consumers Union (CU), Electronic Frontier Foundation (EFF), Knowledge Ecology International (KEI), Public Knowledge (PK), and U.S. Public Interest Research Group (USPIRG) sent a letter [3 pages in PDF] to House Judiciary Committee (HJC) leaders expressing support for HR 1908 [LOC | WW] the "Patent Reform Act of 2007".

The HJC amended and approved this bill on July 18, 2007. See, story titled "House and Senate Judiciary Committees Approve Patent Reform Bills" in TLJ Daily E-Mail Alert No. 1,613, July 20, 2007.

The House Rules Committee is scheduled to meet on Thursday, September 6, 2007, to adopt a rule for its consideration by the full House. The House could take up the bill on Friday, September 7.

The letter of the six groups states that "Numerous flaws have emerged within the current patent system that can foster poor quality patents and invite uncertainty that inflates the risk and cost of litigation, especially in the areas of software and online services. As a result, innocent innovators may face unwarranted threats of liability and spend valuable resources on unnecessary litigation and licensing instead of on innovation. The poor quality of these issued patents also discourages follow-on innovation and distorts competition, which ultimately harms consumers and the general public. H.R. 1908 takes a significant first step towards improving patent quality and reducing the costs and uncertainties of litigation."

The letter praises the provisions in the bill regarding post grant reviews, third party submissions, apportionment of damages, and willful infringement standards. This letter does not comment upon the Senate version of the bill.

The Senate Judiciary Committee (SJC) approved the Senate version of bill on July 19, 2007. It S 1145 [LOC | WW]. It is also titled the "Patent Reform Act of 2007". The full Senate has not yet taken up this bill.

9/4. The Senate confirmed former Rep. Jim Nussle (R-IA) to be Director of the Office of Management and Budget (OMB) by a vote of 69-24. All of the votes against were cast by Democrats.

8/31. The U.S. District Court (DConn) sentenced Eli El to serve 30 months in prison following his plea of guilty to one count of conspiracy to commit criminal copyright infringement. The Department of Justice (DOJ) stated in a release that he participated "in the distribution of approximately 20,000 copyright works over the Internet through the warez scene -- an underground online community of individuals and organized groups who use the Internet to engage in the large-scale, illegal distribution of copyrighted software".

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