4/11. The Department of Justice's (DOJ) Antitrust Division filed a complaint [36 pages in PDF] in the U.S. District Court (SDNY) against Apple and five book publishers alleging violation of Section 1 of the Sherman Act in connection their alleged conspiring to increase the prices that consumers pay for e-books.

The publisher defendants are Hachette (which includes Little Brown), Harper Collins, Simon & Shuster, Holtzbrink (which includes Macmillan), and Penguin

Complaint. The complaint alleges "Apple and Publisher Defendants reached an agreement whereby retail price competition would cease (which all the conspirators desired), retail e-book prices would increase significantly (which the Publisher Defendants desired), and Apple would be guaranteed a 30 percent ``commission´´ on each e-book it sold (which Apple desired)." (Parentheses in original.)

Apple and the publishers "jointly agreed to alter the business model governing the relationship between publishers and retailers. Prior to the conspiracy, both print books and e-books were sold under the longstanding ``wholesale model.´´ Under this model, publishers sold books to retailers, and retailers, as the owners of the books, had the freedom to establish retail prices. Defendants were determined to end the robust retail price competition in e-books that prevailed, to the benefit of consumers, under the wholesale model. They therefore agreed jointly to replace the wholesale model for selling e-books with an ``agency model.´´ Under the agency model, publishers would take control of retail pricing by appointing retailers as ``agents´´ who would have no power to alter the retail prices set by the publishers. As a result, the publishers could end price competition among retailers and raise the prices consumers pay for e-books through the adoption of identical pricing tiers. This change in business model would not have occurred without the conspiracy among the Defendants."

The complaint alleges that "Apple facilitated the Publisher Defendants' collective effort to end retail price competition by coordinating their transition to an agency model across all retailers."

How? The complaint states that "Over three days in January 2010, each Publisher Defendant entered into a functionally identical agency contract with Apple that would go into effect simultaneously in April 2010 ..."

Moreover, these contracts with Apple also provided that "the Publisher Defendants would raise retail e-book prices at all other e-book outlets, too", so that "electronic versions of bestsellers and newly released titles would be priced according to a set of price tiers contained in each of the Apple Agency Agreements ..."

Then, after executing the Apple agency contracts, these publishers "acted to complete the scheme by imposing agency agreements on all their other retailers", who thereby "lost their ability to compete on price".

The effect, the complaint alleges, was to raise prices that consumers pay. Previously, the most popular e-books were sold for $9.99. After the defendants implemented their scheme, these same e-books sold for $12.99 or $14.99.

And, the complaint alleges, this violates federal antitrust law. The complaint states only one claim -- violation of Section 1 of the Sherman Act, which is codified at 15 U.S.C. § 1.

Settlement with Three Publishers. The DOJ simultaneously announced that it reached a settlement with three book publishers (Hachette, Harper Collins, and Simon & Schuster).

The proposed settlement agreement [PDF], which must be approved by the District Court, provides that within seven days of Court approval the defendants "shall terminate any agreement with Apple relating to the Sale of E-books that was executed prior to the filing of the Complaint".

It also prohibits the settling e-book publishers for two years from entering into new agreements that constrain e-book retailers' ability to offer discounts or other promotions to consumers to encourage the sale of the publishers' e-books.

It also prohibits the three settling defendants for five years from agreeing to any kind of most favored nation (MFN) provision that could undermine the effectiveness of the settlement agreement.

Non-Settling Defendants. Apple, Holtzbrink (Macmillan), and Penguin are fighting the lawsuit.

John Sargent, CEO of Macmillan, a unit of one of the publishers that is fighting the DOJ, wrote that "Macmillan did not act illegally. Macmillan did not collude."

He stated in a letter to authors that "the terms the DOJ demanded were too onerous. After careful consideration, we came to the conclusion that the terms could have allowed Amazon to recover the monopoly position it had been building before our switch to the agency model. We also felt the settlement the DOJ wanted to impose would have a very negative and long term impact on those who sell books for a living, from the largest chain stores to the smallest independents."

John Makinson, Ch/CEO of Penguin Group, stated in a release that "alone among the publishers party to the investigations that resulted in today's announcements, we have held no settlement discussions with the DOJ or the states. We have held strongly to this view for two, and only two, reasons."

First, "we have done nothing wrong. The decisions that we took, many them of them costly and difficult, were taken by Penguin alone." Also, the complaint "contains a number of material misstatements and omissions".

Second, "the agency model is the one that offers consumers the prospect of an open and competitive market for e-books".

DOJ Comments. The DOJ also held an event at which Attorney General Eric Holder  gave a speech, and Sharis Pozen, acting Assistant Attorney General in charge of the DOJ's Antitrust Division, gave a speech.

Holder (at left) stated that "publishing company executives discussed confidential business and competitive matters -- including Amazon’s e-book retailing practices -- as part of a conspiracy to raise, fix, and stabilize retail prices. In addition, we allege that these publishers agreed to impose a new model which would enable them to seize pricing authority from bookstores; that they entered into agreements to pay Apple a 30 percent commission on books sold through its iBookstore; and that they promised -- through contracts including most-favored-nation provisions -- that no other e-book retailer would set a lower price".

Pozen (at right) stated that "the antitrust laws are flexible and can keep pace with technology and a rapidly changing industry. This can be seen by our efficient and thorough investigation of this matter as well as the effective remedy we have proposed for three of the publishers."

Both Holder and Pozen noted that the DOJ worked with the European Commission on this matter.

Google Books Case. This is the second major deal involving large book publishers and a large Silicon Valley company to incur the opposition of the DOJ's antitrust enforcers. The other was the proposed class action settlement in the Google books case.

See, story titled "DOJ Files Pleading in Google Books Case" in TLJ Daily E-Mail Alert No. 1,985, September 21, 2009, and story titled  "DOJ Criticizes Amended Google Books Settlement" in TLJ Daily E-Mail Alert No. 2,043, February 12, 2010. See also, stories titled "District Court Rejects Google Books Class Action Settlement" in TLJ Daily E-Mail Alert No. 2,206, March 22, 2011, and "Orphan Works and the Court's Rejection of the Google Book Deal" in TLJ Daily E-Mail Alert No. 2,207, March 23, 2011.

Amazon, whose $9.99 pricing was the target of the defendants, did not return a phone call from TLJ.

This case is U.S. v. Apple, et al., U.S. District Court for the Southern District of New York, D.C. No. 1:12-cv-02826-UA.

4/11. The Department of Justice's (DOJ) complaint against Apple and e-book publishers alleges violation of Section 1 of the Sherman Act, which is codified at 15 U.S.C. § 1.

This section provides, in relevant part, that "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine ..."

The language of this section provides very little guidance for the Court. The outcome of this case will turn on the recent court interpretation of the statute, and economic analysis, as applied to the facts of the case.

The defendants contesting this action have not released statements that contest the DOJ's factual allegations, present their factual allegations, or assert their defenses and legal analysis.

The DOJ complaint is long at 36 pages. It often employs vague wording. It is full of cursory allegations, such as conspiracy. However, it is often short on substantiating factual allegations. For example, there is no allegation that representatives of Apple and the defendant publishers got together in one place at one time and agreed upon the terms that the DOJ now seeks to undo.

The complaint is also full of derogatory accusations, such as that publishers wanted prices to be higher, that they wanted consumers to expect to pay more for books, and that they did not like Amazon's business practices. But, these do not constitute violations of antitrust law.

Also, while the complaint contains many allegations of communications and meetings (such as at posh Manhattan restaurants) between publishers to develop a conspiracy among these horizontal competitors, these allegations make no mention of Apple.

Also, it should be noted, Apple is not a horizontal competitor of the publishers. Apple makes the iPad, and is a retailer of e-books.

Apple's role, the complaint asserts, was to efficiently implement the publishers' agreement to raise e-book prices across all retailers. It had a new platform for retailing e-books, and it wanted to sell e-books and capture market share from Amazon, but it did not want to compete on price with Amazon. Moreover, the complaint continues, Apple was willing to implement the publishers' agreement to raise e-book prices, in return for a 30% commission, and a most favored nation provision. So, Apple negotiated agency contracts with each of the publishers, one on one, but simultaneously, and keeping all publishers informed of all negotiations, and assuring all publishers that its contracts with each would be the same.

So, the DOJ theory goes, while Apple was not party to the original meetings and conspiracy, it was "a critical conspiracy participant by allowing the Publisher Defendants to signal one another" that they could collectively achieve through this process the goal of the conspiracy of raising prices by all signing identical agency contracts with Apple.

The complaint is replete with factual allegations of communications, cooperation, information sharing among horizontal competitors, with the object of raising prices.

However, the actual mechanism that raised prices was numerous agency agreements signed by publishers with all retailers. But, under the DOJ theory, this was made possible by the publishers having signed substantially identical agency agreements with Apple with MFN provisions. And each of these agreements was the product of a one on one negotiation between Apple and one publisher.

If there is an antitrust violation, the publishers and Apple have gone to great lengths to handle the transition in a manner designed to frustrate antitrust enforcement action.

In response to this DOJ action, some of Apple's defenders have pointed to Amazon as the monopolist, or company with market power, and Apple as the new entrant, and technological innovator. However, the DOJ complaint alleges that the publishers were clear that their concern was that Amazon was the lower priced retailer, and was putting pressure on others to lower prices. Under basis monopoly theory, monopolies are harmful because they lead to higher prices. Yet, the publishers concern was that this alleged monopolist was driving prices down.

In the DOJ's antitrust case against Microsoft filed in 1998 Microsoft did not benefit from the circumstance that while the DOJ alleged that Microsoft had an operating system monopoly, Microsoft did not engage in monopoly pricing of its operating system.

Also, the Supreme Court does not taken the view that all price increases or price fixing are inherently bad or per se unlawful.

It held that certain vertical retail price maintenance is not per se unlawful, but is rather subject to the rule of reason. On June 28, 2007, the Supreme Court issued its opinion in Leegin Creative Leather Products v. PSKS. See, story titled "SCUS Holds That All Vertical Price Restraints Are Subject to Rule of Reason" in TLJ Daily E-Mail Alert No. 1,603, June 28, 2007. Of course, that was vertical case, not a horizontal collusion case. Also, Pozen's predecessor as head of the Antitrust Division, Christine Varney, publicly criticized that opinion. See, story titled "Varney Discusses Antitrust, States AGs, RPM and the Rule of Reason" in TLJ Daily E-Mail Alert No. 1,999, October 8, 2009.

Also, the Supreme Court held in its 1979 opinion in Broadcast Music Inc. v. CBS, 441 U.S. 1, that ASCAP and BMI blanket licenses to copyrighted musical compositions at fees negotiated by them is not price fixing per se unlawful under the antitrust laws.

4/11. Gary Shapiro (at right), head of the Consumer Electronics Association (CEA), stated in a release that "The decision by the U.S. government to sue Apple and book publishers for alleged antitrust violations over the price of electronic books marks another sad milestone in our government's war on American companies. Apple is an American crown jewel that other nations covet, yet our own government leads an attack on its entry into electronic books."

Shapiro (at right) stated that "the legal theory of attacking a new market entrant for anti-competitive pricing is surprising. Apple's iPad hardware and iBooks software have an estimated 10 to 15 percent of the market share in e-books. Our ambiguous antitrust laws are now being used to take on a new market entrant of just over two years as if they have the market power to set prices."

He continued that "This lawsuit combined with the action costing AT&T a $4 billion break-up fee in its attempted merger with T-Mobile, reflects on how our political leadership has ignored the reality that our nation, its businesses and our economy face serious economic challenges. Our government should be defending our leading companies from foreign attack, rather than attacking these companies so foreign governments will follow. Our government's actions are catnip to the European Union and other governments seeking to extract money from successful American companies."

"Sadly, we've seen this before with absurd legal U.S. government challenges to Google, Intel, Microsoft and Qualcomm -- world-class American innovators. Each time, no real harm was found, but our government's attacks enabled others to extract billions in fines or foolish remedies."

Ryan Young of the Competitive Enterprise Institute (CEI) stated in a release that "Given Amazon's much larger share of the e-book market, Apple is hardly in a position to price its products uncompetitively. If consumers feel overcharged, they can easily give their business to Amazon or Barnes & Noble instead -- possibly by using Apple’s own products!"

"This lawsuit is further evidence of how poorly smokestack-era antitrust policies fit our information age economy. E-book manufacturers and publishers are trying and discarding different business models at a fast rate as they figure out what works and what doesn't. By the time the wheels of justice slowly creak to a verdict, Apple, Penguin, Simon & Schuster, and the other defendants will have long since moved on to some other pricing policy. The Justice Department should admit its mistake and drop the lawsuit."

Bert Foer, head of the American Antitrust Institute (AAI), stated in a release that "The collusion of competitors to impose a business model on a retailer would be an unacceptable form of price-fixing,".

He added that "The practical result of a failure to prosecute this case would be to acquiesce in this scheme to increase the price of e-books. Even though the agency model sought by Apple and the publishers may not in itself be illegal or unethical, to allow manufacturers to collude in the manner alleged would be to undermine the consumer's best protection against the evils of monopolies and cartels".

4/11. The state of Texas, 14 other states, and Puerto Rico filed a complaint [redacted, 56 pages in PDF] in the U.S. District Court (WDTex) against Apple, Simon & Schuster, Macmillan and Penguin alleging violation of state and federal antitrust laws in connection with their alleged conspiracy to restrain trade and raise the retail price of electronic books.

The complaint contains three counts that allege violation of Section 1 of the Sherman Act. First, it alleges violation by book publishers via a horizontal agreement among competing publishers to raise e-book prices. Second, it alleges violation by publishers by agreeing to window (delay publication of) their frontlist e-books. Third, it alleges violation by both publishers and Apple by their agreement to use the agency model as a mechanism to raise retail prices of frontlist e-books.

The fourth and final count alleges that these acts also constitute violations of various state antitrust laws.

This complaint seeks declarations that the defendants have violated state and federal antitrust laws. It seeks injunctive relief enjoining and restraining defendants from continuing the alleged anticompetitve practices.

The complaint seeks treble damages under the federal Clayton Act. The complaint alleges that "As a result of the conspiracy, consumers nationwide, in aggregate, paid substantially more than one hundred million dollars in overcharges on e-books", and that "these overcharges are ongoing".

The complaint also seeks fines, penalties, damages, disgorgements and other monetary relief under various state laws.

Greg Abbott (at right), Attorney General of Texas, stated in a release that "Colluding to fix prices violates antitrust laws and raises costs for customers. In this case, three of the nation’s largest publishing companies worked together to gain control of retail prices and raise the price of e-books. The defendants colluded to use the agency distribution model to effectively eliminate free market competition and allow publishers -- rather than the marketplace -- to set the price of e-books."

This release states that "For years, retailers sold e-books through a traditional wholesale distribution model, under which retailers -- not publishers -- set e-books' sales prices. However, the investigation revealed that Penguin, Simon & Schuster and Macmillan conspired with other publishers and Apple to artificially raise prices by imposing a distribution model in which the publishers set the prices for bestsellers at $12.99 and $14.99."

Then, "When Apple prepared to enter the e-book market, the publishers and Apple agreed to adopt an agency distribution model as a mechanism to allow them to fix prices. To enforce their price-fixing scheme, the publishers and Apple relied on contract terms that forced all e-book outlets to sell their products at the same price. Because the publishers agreed to use the same prices, retail price competition was eliminated."

The plaintiffs in this action are Texas, Alaska, Arizona, Connecticut, Colorado, Illinois, Iowa, Maryland, Missouri, Ohio, Pennsylvania, Puerto Rico, South Dakota, Tennessee, Vermont and West Virginia.

California (home to Apple) and New York (home to many book publishers) are not plaintiffs. For example, the corporate headquarters of Simon & Schuster, Inc. and Penguin Group USA, Inc., are in Manhattan, New York. Macmillan also has operations in Manhattan, blocks from the U.S. District Court for the Southern District of New York, where the DOJ filed its complaint.

The House will not meet on the week of Monday, April 2, through Friday, April 6, or on the week of Monday, April 9, through Friday, April 13, except for pro forma sessions.

The Senate will not meet on the week of Monday, April 2, through Friday, April 6, or on the week of Monday, April 9, through Friday, April 13, except for pro forma sessions.

12:00 NOON - 6:00 PM. Day one of a two day meeting of the National Science Foundation's (NSF) Advisory Committee for Engineering. See, notice in the Federal Register, Vol. 77, No. 61, Thursday, March 29, 2012, at Page 19036. Location: NSF, 4201 Wilson Boulevard, Suite 1235, Arlington, VA.

12:30 - 2:00 PM. The Federal Communications Bar Association's (FCBA) Homeland Security and Emergency Communications and Engineering and Technical Practice Committees will host a brown bag lunch titled "An Interoperable Public Safety Broadband Network: The Challenge of Standards Development". The speakers will be Dereck Orr (NTIA's Public Safety Communications Research Program), Jeffrey Bratcher (NTIA/PSCRP), Jesus Trujillo Gomez (Cisco Systems), Jean-Paul Emard (Alliance for Telecommunications Industry Solutions), Thomas Hengeveld (Harris Corp.), Ajit Kahaduwe (Nokia Siemens Networks), and Vint Cerf (Google). For more information, contact Gina Harrison at 202-482-2695 or rharrison at ntia dot doc dot gov. Location: National Association of Broadcasters, 1771 N St., NW.

12:30 - 2:00 PM. The DC Bar Association's Media Law Committee will host a closed brown bag lunch meeting to discuss media and communications law developments. Free. No CLE credits. Reporters are barred from covering this event. For more information, contact the DC Bar at 202-626-3463 or Kurt Wimmer (Covington & Burling) at kwimmer at cov dot com or Jim McLaughlin at mclaughlinj at washpost dot com. See, notice. Location: Covington & Burling, 1201 Pennsylvania Ave., NW.

6:00 - 9:15 PM. The DC Bar Association will host an event titled "Open Source Licensing: Legal Strategies and Risks". The speakers will be Victoria Hall (solo practice), Daniel Berlin (Google), and Jay Westermeier (Finnegan Henderson). CLE credits. The price to attend ranges from $89 to $129. See, notice. For more information, call 202-626-3488. The DC Bar has a history of barring reporters from its events. Location: DC Bar Conference Center, 1101 K St., NW.

Deadline for communications carriers, handset manufacturers, and operating system developers to respond to letters sent by House Commerce Committee (HCC) Democrats regarding regarding what they are doing to combat theft of smart phones, and protect consumers from theft of personal and financial information. See, story titled "House Commerce Committee Democrats Question Companies Regarding Smart Phone Theft" in TLJ Daily E-Mail Alert No. 2,356, March 25, 2012.

8:00 AM - 2:00 PM. Day two of a two day meeting of the National Science Foundation's (NSF) Advisory Committee for Engineering. See, notice in the Federal Register, Vol. 77, No. 61, Thursday, March 29, 2012, at Page 19036. Location: NSF, 4201 Wilson Boulevard, Suite 1235, Arlington, VA.

9:00 - 10:30 AM. The Information Technology and Innovation Foundation (ITIF) will host a panel discussion titled "Grand Innovation Challenges of the 21st Century". The speakers will be Thomas Kalil (Deputy Director for Policy of the White House Office of Science and Technology Policy, Rick Valencia (Qualcomm Life), and Robert Atkinson (ITIF), See, notice. Location: ITIF/ITIC: Suite 610, 1101 K St., NW.

5:30 - 2:00 PM. The DC Bar Association will host a program titled "Ethics and E-Discovery Searches". The speakers will be Ellen Pyle (McDermott Will & Emery), Bennett Borden (Williams Mullen), and Maura Grossman (Wachtell Lipton). The price to attend ranges from $89 to $129. CLE credits. See, notice. For more information, call 202-626-3488. The DC Bar has a history of barring reporters from its events. Location: DC Bar Conference Center, 1101 K St., NW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking (FNPRM) regarding jurisdictional separations, the process by which incumbent local exchange carriers (ILECs) apportion regulated costs between the intrastate and interstate jurisdictions. The FCC once again proposes to extend the current freeze, through June 30, 2014. This item is FCC 12-27 in CC Docket No. 80-286. See, notice in the Federal Register, Vol. 77, No. 56, Thursday, March 22, 2012, at Pages 16900-16902.

RESCHEDULED FROM MARCH 30. 12:00 NOON - 1:00 PM. Federal Communications Commission (FCC) Commissioner Robert McDowell will speak. Free. Brown bag lunch. The FCBA states that this is an FCBA event of its Young Lawyers Committee. Location: FCC, 8th floor South Conference Room, 445 12th St., SW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [14 pages in PDF] regarding allowing Economic Area (EA) based 800 MHz Specialized Mobile Radio (SMR) licensees to exceed a channel spacing and bandwidth limitation. The FCC adopted this NPRM on March 7, 2012, and released the text on March 9. It is FCC 12-25 in WT Docket No. 12-64; WT Docket No. 11-110. See, notice in the Federal Register, Vol. 77, No. 61, Thursday, March 29, 2012, at Pages 18991-18996.

Passover ends at sundown.

The House will return from its two week recess at 12:00 NOON. Votes will be postponed until 6:30 PM.

The Senate will return from its two week recess. It will resume consideration of S 2230 [LOC | WW], a tax bill.

8:00 AM - 5:00 PM. The American Bar Association (ABA) will host a conference titled "Public Utility, Communications and Transportation Annual Spring Program 2012". The price to attend ranges from $75 to $450. See, notice. Location: Pepco Holdings, 701 9th St., NW.

8:30 AM - 5:00 PM. The Department of Commerce's (DOC) Bureau of Industry and Security's (BIS) Emerging Technology and Research Advisory Committee (ETRAC) will hold a closed meeting. The BIS agenda for this meeting is undisclosed. See, notice in the Federal Register, Vol. 77, No. 62, Friday, March 30, 2012, at Page 19179. Location: Room 6527, DOC Hoover Building, 14th Street between Pennsylvania and Constitution Avenues, NW.

1:00 - 2:00 PM. The American Bar Association (ABA) will host an on site and telecast panel discussion titled "Asia Pacific Economic Cooperation: Cross Border Privacy Rules Introduction And Spotlight on Canada". The speakers will be Daniele Chatelois (Canadian government's Industry Canada) and Josh Harris (U.S. Department of Commerce's Office of Technology and Electronic Commerce). Free. No CLE credits. See, notice. Location: Fulbright & Jaworski, 801 Pennsylvania Ave., NW.

TIME? The American Bar Association (ABA) will host a telecast panel discussion titled "Legal Issues Stemming from the Impending Shortage of Wireless Spectrum". The speakers will be Tarak Anada (Jones Walker), Babette Boliek (Pepperdine University School of Law), Michael Goggin (AT&T Mobility), and Daniel Brenner (Hogan Lovells). Different ABA notices provide different times. One states 3:00 - 4:00 PM. The other states 4:00 - 5:00 PM. See, notice.

The Executive Office of the President's (EOP) President's Council of Advisors on Science and Technology (PCAST) will hold a partially closed meeting. The agenda includes a discussion of a report on the PCAST's Advanced Manufacturing Partnership (AMP). The public portion of the meeting will be teleconferenced from 4:30 - 5:00 PM. The deadline to register to register is 12:00 NOON on April 12. See, notice in the Federal Register, Vol. 77, No. 60, Wednesday, March 28, 2012, at Pages 18798-18799.

5:00 PM. Deadline to submit comments to the Office of the U.S. Trade Representative (OUSTR) following its March 29 hearing to assist it in preparing its 2011 Annual GSP Product Review. See, original notice in the Federal Register, Vol. 77, No. 34, Tuesday, February 21, 2012, at Pages 10034-10036. See also, notice of change of date in the Federal Register, Vol. 77, No. 52, Friday, March 16, 2012, at Page 15841.

8:30 AM - 3:30 PM. The Department of Commerce's (DOC) Bureau of Industry and Security's (BIS) Emerging Technology and Research Advisory Committee (ETRAC) will hold an open meeting. The agenda for this meeting includes a discussion of "Nanotechnology--Nanocoated Materials". See, notice in the Federal Register, Vol. 77, No. 62, Friday, March 30, 2012, at Page 19179. Nanocoating has many applications in ICT, including protecting electronics devices from moisture caused corrosion, producing flat panel displays, and adding antireflection coating to optical products. Location: Room 3884, DOC Hoover Building, 14th Street between Pennsylvania and Constitution Avenues, NW.

1:00 - 2:30 PM. The American Bar Association (ABA) will host a webcast and telecast panel discussion titled "The New World of Licensing Songs and Sound Recordings". The speakers will be Jeff Brabec (BMG Chrysalis), Todd Brabec, Henny Root (Lapidus Root). Prices vary. CLE credits. See, notice.

1:30 - 4:30 PM. The Department of Homeland Security's (DHS) National Infrastructure Advisory Council (NIAC) will meet. See, notice in the Federal Register, Vol. 77, No. 62, Friday, March 30, 2012, at Pages 19300-19301. Location: 1310 N. Courthouse Road, Suite 300, Arlington, VA.

2:30 PM. The Senate Intelligence Committee (SIC) will hold a closed meeting. See, notice. Location: Room 219, Hart Building.

6:00 - 9:15 PM. The DC Bar Association will host the first part of a two part program titled "Preserving Intellectual Property Rights in Gov't Contracts". This first part is subtitled "A Beginner's Guide". The speakers will be David Bloch (Winston & Strawn), Richard Gray (Department of Defense), John Lucas (Department of Energy), and James McEwen (Stein McEwen). The price to attend this part ranges from $89 to $129. CLE credits. See, notice. For more information, call 202-626-3488. The DC Bar has a history of barring reporters from its events. Location: DC Bar Conference Center, 1101 K St., NW.

9:00 AM - 3:00 PM. The Department of Health and Human Services' (DHHS) Office of the National Coordinator for Health Information Technology's (ONCHIT) HIT Standards Committee will meet. See, notice in the Federal Register, Vol. 77, No. 52, Friday, March 16, 2012, at Page 15760. Location: Renaissance Hotel, 999 9th St., NW.

10:00 AM. The Senate Judiciary Committee (SJC) will hold a hearing titled "Nominations to the Privacy and Civil Liberties Oversight Board". See, notice. The SJC will webcast this hearing. Location: Room 226, Dirksen Building.

12:30 - 2:00 PM. The American Intellectual Property Law Association (AIPLA) will host a webcast presentation titled "Are You the Weakest Link?  Making Certain that In-House and Outside Counsel Protect Their Client’s Trade Secrets". The speakers will be Mark Halligan (Nixon Peabody) and Janet Craycroft (Intel Corporation). CLE credits. CD, MP4 download, archived webcast, and other formats available. Prices vary. See, registration page.

1:00 - 2:30 PM. The American Bar Association (ABA) will host a audio webcast and telecast panel discussion titled "Remote Sales Tax and Nexus Issues: The Latest on Taxation of Internet Sales". The speakers will be Edward Bernert (Baker & Hostetler), George Isaacson (Brann & Isaacson), and Bruce Johnson (Utah State Tax Commission). Prices vary. CLE credits. See, notice.

2:00 PM. The House Science Committee's (HSC) Subcommittee on on Technology and Innovation will hold a hearing titled "Avoiding the Spectrum Crunch: Growing the Wireless Economy through Innovation". The witnesses will be Richard Bennett (Information Technology and Innovation Foundation) and Mary Brown (Cisco Systems). The HSC will webcast this event. See, notice. Location: Room 2318, Rayburn Building.

2:30 PM. The Senate Intelligence Committee (SIC) will hold a closed meeting. See, notice. Location: Room 219, Hart Building.

3:30 - 5:00 PM. The Federal Communications Commission (FCC) will hold an event titled "Inside the FCC: Tips on Effective Written Advocacy from FCC Staff". For more information, contact Brendan Carr (Wiley Rein) at bcarr at wileyrein dot com or Justin Faulb (Lampert O'Connor & Johnson) at faulb at lojlaw dot com. The FCBA states that this is an event of its Young Lawyers Committee. Location: FCC, Commission Meeting Room, 445 12th St., SW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Public Notice (PN) that seeks comment regarding whether to fund Rural Health Care Pilot Program participants who will exhaust funding allocated to them before or during funding year 2012 (July 1, 2012 - June 30, 2013). The FCC's Wireline Competition Bureau (WCB) released this PN on February 27, 2012. It is DA 12-273 in WC Docket No. 02-60. See, notice in the Federal Register, Vol. 77, No. 47, Friday, March 9, 2012, at Pages 14364-14366.

4/11. Venue matters. It is particularly important in high profile federal cases against well known persons and companies. On April 11, 2012, the federal government and states filed similar lawsuits, advancing similar Section 1 Sherman Act allegations, against many of the same defendants. However, the federal government filed in the Manhattan, in New York City, while the states filed in Austin, the capitol of the state of Texas.

Litigation in Manhattan works to the advantage of the e-book publishers, and indirectly, Apple. Litigation in Austin works to the disadvantage of e-book publishers. Apple's most preferred forum would be the Northern District of California, San Jose Division, but neither action was filed there.

Manhattan is a publishing center. It is home to many hard copy and e-book publishers. Executives at Penguin and Macmillan will be able to walk to the courthouse. Simon & Schuster executives can take a limo.

In contrast, Austin is an educated, literate, university town -- site of the huge University of Texas at Austin. It is the home of hundreds of thousands of e-book purchasers. It is also the location of the Texas government, including its Attorney General, the lead plaintiff in this action. Moreover, "New York City" is a pejorative in Austin.

Statutes. The general civil venue provision, codified at 28 U.S.C. § 1391, provides in part that "A civil action may be brought in ... a judicial district in which any defendant resides ... a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred ..."

However, there is also an antitrust venue provision, codified at 15 U.S.C. § 22. It provides, in full, that "Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found."

That is, the DOJ, and the Texas AG, can sue corporate e-book publishers and Apple under the federal antitrust laws wherever they want.

DOJ Forum Selection. The DOJ has a history of aggressive forum shopping to obtain the judges, juries and circuit law most favorable to its objectives, and to inflict the greatest inconvenience upon defendants.

For example, it sued, prevailed, and inflicted harm upon Microsoft in its 1998 antitrust action. The DOJ filed that action in Washington DC, even though that district had no connection to the proceeding, other than that consumers there owned computers with Microsoft software.

In contrast, the DOJ filed its antitrust action against Oracle in 2004 in its home court -- the Northern District of California. That forum had the most connection to the action, and judges with the best experience. The DOJ suffered a fast and humiliating defeat. See, stories titled "Antitrust Division Sues Oracle to Enjoin Its Proposed Acquisition of PeopleSoft" in TLJ Daily E-Mail Alert No. 846, March 1, 2004, and "DOJ Loses Oracle Case" in TLJ Daily E-Mail Alert No. 974, September 10, 2004.

When the SEC decided to bring its 2008 securities action against Henry Samueli, it choose the most fair and logical forum, the Central District of California. That court dismissed the case and questioned the conduct of the DOJ attorneys. See, story titled "SEC Drops Case Against Samueli" in TLJ Daily E-Mail Alert No. 2,047, February 17, 2010.

When the DOJ targeted former Sen. Ted Stevens, it filed in Washington DC, rather than the district in which the case arose. The DOJ then made misrepresentations to the court to keep the case in its chosen forum. The DOJ won a conviction (temporarily) and unseated the Senator.

In the just filed e-book antitrust case, the DOJ filed in the District in which many of the events giving rise to the action occurred, and in which many parties and witnesses are now located. It is the most fair and convenient forum for the publisher defendants. Yet, the DOJ has opted not to follow its frequent tactic of forum shopping.

Nevertheless, there is a pattern. The DOJ is more like to loose when it follows principles of fairness and convenience to the defendants than when it forum shops to a district that is unfriendly and inconvenient to the defendants.

The states have wisely and rationally chosen Texas as their lead plaintiff, and Austin as their forum.

However, with substantially similar claims brought in widely divergent districts, located in different appellate circuits, there is the possibility of inconsistent judgments.

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