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Monday, December 3, 2012, Alert No. 2,481.
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Congressional Leaders Write USTR Regarding PRC Protectionism

11/29. The Chairmen and ranking members of House Ways and Means Committee (HWMC) and Senate Finance Committee (SFC) sent a letter to U.S. Trade Representative Ron Kirk regarding the People's Republic of China (PRC).

The four wrote that "We are concerned that China continues to move away from market-based reforms and is more deeply embracing an economic model dominated by state-owned enterprises (SOEs), World Trade Organization (WTO)-inconsistent subsidies, and economic protectionism."

Sen. Max BaucusSen. Max Baucus (D-MT) (at right), Chairman of the SFC, Sen. Orrin Hatch (R-UT), Rep. Dave Camp (R-MI), and Rep. Sander Levin (D-MI) signed the letter.

They continued that "China's state capitalist model presents a range of issues that impact the future prosperity of the United States and the economic stability of the world. As China undertakes its leadership transition, the United States must utilize every opportunity to address China’s barriers to U.S. trade and investment and encourage China’s efforts to rebalance its economy."

They wrote about numerous issues, including the PRC's record on intellectual property. They wrote that "China fails to effectively enforce intellectual property rights (IPR) and has not put in place proper institutional arrangements to show a serious commitment to protecting IPR.  Forced technology localization continues to rise as U.S. companies are forced to forfeit their IPR to do business in China."

They added that "Next month's meeting of the U.S.-China Joint Commission on Commerce and Trade (JCCT) will provide a valuable opportunity to redouble efforts, and we will be paying close attention to the outcomes."

The JCCT is a periodic series of meetings between senior US and PRC officials regarding trade and economic issues.

There are reasons to expect that the December JCCT meeting will not be productive. The PRC only just selected new leadership. The U.S. Department of Commerce (DOC) has only an acting Secretary of Commerce, Rebecca Blank. USTR Ron Kirk is reputed to be about to leave his post. And, the Obama administration has just completed a long election campaign in which both candidates resorted to heated public criticism of the PRC.

More Trade News

11/30. The Office of the U.S. Trade Representative (OUSTR) announced in a release that USTR Ron Kirk met with Ukrainian Foreign Minister Konstyantyn Gryshchenko. This release states that "Kirk expressed strong U.S. concern about Ukraine's request to alter tariff bindings on more than 350 products that it agreed to when it joined the" World Trade Organization (WTO). See also, Kirk's letter of November 8, 2012 to the Ukraine. And see, November 27 joint statement of the US, Japan, EU, Korea, Canada, Australia, Hong Kong China, and 16 other nations. It states that the Ukraine's actions are protectionist.

11/30. Karel De Gucht, the European Commissioner for Trade, gave a speech in Hamburg, Germany, titled "EU - China: A New Growth Equation".

11/29. The European Commission (EC) announced in a release the commencement of negotiations for a free trade agreement (FTA) between the European Union and Japan. There is no US Japan FTA, or FTA negotiation.

6th Circuit Construes Dormant Commerce Clause

11/29. The U.S. Court of Appeals (6thCir) issued its opinion [28 pages in PDF] in American Beverage Association v. Michigan, a dormant commerce clause case.

This case involves state regulation of beverage containers, not e-commerce. However, the Court's analysis of the dormant commerce clause and extraterritorial effects of state regulation might be applied in future cases involving state regulation of e-commerce.

The dormant commerce clause is sometimes invoked to protect electronic commerce from states that either seek to favor in state brick and mortar businesses at the expense of out of state online competitors, and states that impose regulatory regimes that affect both in state and out state activity. This case pertains to the latter -- extraterritorial regulation.

Article I, Section 8, of the Constitution provides that "The Congress shall have Power ... to regulate Commerce with foreign Nations, and among the several States ..." The dormant commerce clause is the judicial concept that the Constitution, by delegating certain authority to the Congress to regulate commerce, thereby bars the states from legislating on certain matters that affect interstate commerce, even in the absence of Congressional legislation. It is applied to block states from regulating in a way that materially burdens or discriminates against interstate commerce. See, Gibbons v. Ogden, 22 U.S. 1 (1824), and Cooley v. Board of Wardens, 53 U.S. 299 (1851). More recent treatments of the concept include Healy v. The Beer Institute, 491 U.S. 324 (1989), and CTS Corp. v. Dynamics Corp. of America, 481 U.S. 69 (1987).

The Court of Appeals considered, but distinguished, the Supreme Court's 2005 opinion Granholm v. Heald, 544 U.S. 460. That case involved Michigan's regulation of internet wine sales. See, story titled "Supreme Court Rules in Internet Wine Sales Case" in TLJ Daily E-Mail Alert No. 1,137, May 17, 2005.

Helgi Walker of the law firm of Wiley Rein, who previously worked at the Federal Communications Commission (FCC), and now represents communications and technology companies, argued the case for amicus curiae Washington Legal Foundation (WLF). See also, WLF brief.

Walker also represented Comcast in its successful challenge to the FCC's 2008 Comcast order. She is now representing Verizon in its pending challenge to the FCC's 2010 rules that regulate broadband internet access service (BIAS) providers.

In the present case, the state of Michigan regulated, and criminalized, business practices of beverage retailers.

The District Court upheld the statute. Court of Appeals reversed.

This case is American Beverage Association v. Rick Snyder, et al., U.S. Court of Appeals for the 6th Circuit, App. Ct. No. 11-2097, an appeal from the U.S. District Court for the Western District of Michigan at Grand Rapids, D.C. No. 1:11-cv-195, Judge Gordon Quist presiding. Judge Clay wrote the opinion of the three judge panel. Judges Sutton and Rice both wrote concurring opinions.

Pew Internet Releases Survey on Teenager Online Privacy

11/20. The Pew Internet and American Life Project released a survey based report [29 pages in PDF] titled "Parents, Teens, and Online Privacy".

Pew surveyed 802 parents of teenaged children by phone and e-mail. Pew asked parents how concerned they are about "how much information advertisers can learn about their child’s online behavior", "how their child interacts online with people they do not know", "how their child’s online activity might affect their future academic or employment opportunities", and "how their child manages his or her reputation online". Pew found high levels of parental concern.

The report finds that 50% of respondents used parental controls or other means of blocking, filtering, or monitoring their child’s online activities.

The report finds that only 44% of parents respond that they have read a privacy policy for a website or social network their child was using.

And, only 39% parents of children who uses social network sites state that they have helped their child with privacy settings for those sites.

FTC Rule Narrows Definition of Creditor in ID Theft Red Flag Rules

11/30. The Federal Trade Commission (FTC) released a notice [14 pages in PDF], to be published in the Federal Register, that announces, describes, recites, sets the effective date for, and sets the deadline to submit comments on, its new rule implementing the identity theft red flag provisions of Section 615 of the Fair Credit Reporting Act (FCRA), which is codified at 15 U.S.C. 1681m(e).

The FTC and other agencies promulgated red flag rules in 2007. They defined covered creditors more broadly than many members of the Congress thought appropriate. Hence, the 111th Congress enacted S 3987 [LOC | WW, the "Red Flag Program Clarification Act of 2010", to narrow the definition of creditor. The new rule provides that "Creditor has the same meaning as in 15 U.S.C. 1681m(e)(4)." That is, the FTC now conforms its rules to the statute.

In this notice the FTC applies the oxymoronic label, "interim final", to this rule. Comments are due by February 11, 2013. This rule takes effect on February 11, 2013.

More News

11/30. The House is scheduled to consider S 3486 [LOC | WW], the "Patent Law Treaties Implementation Act", under suspension of the rules, during the week of December 3, 2012. Sen. Patrick Leahy (D-VT) and Sen. Charles Grassley (R-IA) introduced this bill on August 2. It would implement two patent law treaties, the "Hague Agreement Concerning International Registration of Industrial Designs", concluded in 1999, and the "Patent Law Treaty", concluded in 2000, which the Senate ratified in 2007. The Senate Judiciary Committee (SJC) amended and approved this bill on September 20. See, story titled "Senate Judiciary Committee Approves Patent Law Treaties Implementation Act" in TLJ Daily E-Mail Alert No. 2,452, September 20, 2012. The full Senate passed it by voice vote on September 21.

11/21. The U.S. Court of Appeals (3rdCir) issued its opinion [55 pages in PDF] in US v. Pavulek, affirming a conviction and life sentence for child porn related offenses. The Court of Appeals affirmed the District Court's denial of a motion to suppress evidence obtained pursuant to court warrants for an e-mail account and work computer. The Court of Appeals held that the Magistrate Judge lacked probable cause to issue the warrants, but that since the officers reasonably relied on the warrants in good faith, it was appropriate to deny the motion to suppress. This case is US v. Paul E. Pavulek, U.S. Court of Appeals for the 3rd Circuit, App. Ct. No. 11-3863, an appeal from the U.S. District Court for the District of Delaware, D.C. No. 1-09-cr-00043-001.

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In This Issue
This issue contains the following items:
 • Congressional Leaders Write USTR Regarding PRC Protectionism
 • More Trade News
 • 6th Circuit Construes Dormant Commerce Clause
 • Pew Internet Releases Survey on Teenager Online Privacy
 • FTC Rule Narrows Definition of Creditor in ID Theft Red Flag Rules
 • More News
Notice
TLJ has been without connectivity since Sunday. A service provider technician has scheduled a service call for Tuesday afternoon. At least until then, e-mail and phone messages may not be promptly answered.
Washington Tech Calendar
New items are highlighted in red.
Monday, December 3

The House will meet at 12:00 NOON for morning hour, and at 2:00 PM for legislative business. Rep. Cantor's schedule for the week states that "No votes are expected in the House" on December 3.

The Senate will meet at 2:00 PM. It will resume consideration of S 3254 [LOC | WW], the "Department of Defense Authorization Act".

12:00 NOON - 1:00 PM. The American Bar Association (ABA) will host an on site and teleconferenced panel discussion titled "The FTC Report That K-Dur Ignored". See, July 16, 2012 opinion of the U.S. Court of Appeals (3rdCir) in In Re K-Dur Antitrust Litigation. The speakers will be Shylah Alfonso (Perkins Coie), Kelly Smith (Arnold & Porter), Michael Kades (FTC), and Joanna Tsai (Charles River Associates). Free. No CLE credits. See, notice. Location: Perkins Coie, 700 13th St., NW.

2:30 - 3:30 PM. The Center for Strategic and International Studies (CSIS) will host an event titled "China in the Multilateral Development System: From a Taker to a Giver". The speakers will be Yu Ye (Shanghai Institutes for International Studies) and Christopher Johnson (CSIS). See, notice. Location: CSIS, 4th floor conference room, 1800 K St., NW.

Deadline to submit to the Federal Communications Commission (FCC) oppositions to the petitions for reconsideration of its First Report and Order [67 pages in PDF] regarding spectrum for the operation of Medical Body Area Networks (MBAN). This R&O is FCC 12-54 in ET Docket No. 08-59. See, petition and petition. See also, FCC Public Notice, and notice in the Federal Register, Vol. 77, No. 222, November 16, 2012, at Pages 68721-68722.

Tuesday, December 4

The House will meet at 10:00 AM for morning hour, and at 12:00 NOON for legislative business. The schedule for the week includes consideration of S 3486 [LOC | WW], the "Patent Law Treaties Implementation Act of 2012" under suspension of the rules. See, Rep. Cantor's schedule for the week.

12:00 NOON - 1:15 PM. The George Mason University's (GMU) School of Public Policy will host book presentation. Robert Atkinson (Information Technology and Innovation Foundation) will discuss his recently published book [Amazon] titled "Innovation Economics: the Race for Global Advantage". Location: GMU, Room 475, Founders Hall, 3351 Fairfax Drive, Fairfax, VA.

1:00 - 2:00 PM. The American Bar Association (ABA) will host a webcast and teleconferenced panel discussion titled "Privacy & Information Security Monthly Update". The speakers will be Mary Ellen Callahan, Michael Borgia, Jennifer Gregory and David Didion (all of Jenner & Block), and Aryeh Friedman. Free. No CLE credits. See, notice.

1:00 - 2:30 PM. The American Bar Association (ABA) will host a webcast and teleconferenced panel discussion titled "Building or Sabotaging the Enterprise? Squaring Cyber Security with Technologies that Undermine It". The speakers will be James Clark (Oasis), Charles Palmer (IBM Research), Candace Jones (Federal Reserve Bank of New York), and Roland Trope (Trope & Schramm). Prices vary. CLE credits. See, notice.

1:00 - 2:30 PM. The American Bar Association (ABA) will host a webcast and teleconferenced panel discussion titled "Videotaping Police, Wiretapping Laws and the First Amendment CLE Teleconference". Prices vary. No CLE credits. See, notice.

2:30 PM. The Senate Commerce Committee (SCC) will hold a hearing on numerous pending nominations, including Joshua Wright (to be an FTC Commission) and Mignon Clyburn (reappointment to FCC). See, notice. The SCC will webcast this hearing. Location: Room 253, Russell Building.

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

2:30 - 3:30 PM. The Internet Caucus (IC) will host an event at which Alexander Alvaro, VP of the European Parliament, will speak regarding privacy and security. For more information, call 202-638-4370. Location: IC/CDT, 1634 I St.,  NW.

5:30 - 6:30 PM. The Center for Strategic and International Studies (CSIS) will host an event titled "China's Leadership Transition and Looking Ahead at U.S. -China Relations". The speakers will be Bob Schieffer (CBS), Kurt Campbell (Assistant Secretary of State for East Asia and the Pacific), Richard McGregor (Financial Times), and Christopher Johnson  (CSIS). See, notice. Location: CSIS, 1800 K St., NW.

6:00 - 8:15 PM. The Federal Communications Bar Association's (FCBA) International Committee and Wireless Telecommunications Committee will host an event titled "Holiday Program and Networking Reception". No CLE credits. Prices vary. See, notice. Location: House of Sweden, 2900 K St., NW.

6:00 - 9:15 PM. The DC Bar Association will host a program titled "IP Year in Review Series 2012: Part 1: Copyright and Trademark Update". The speakers will be Terence Ross (Crowell & Moring), Andrew Sommer, (Winston & Strawn), Steven Wadyka (Greenberg Traurig), and Bradley Wright (Banner & Witcoff). The price to attend ranges from $129 to $179. 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.

Wednesday, December 5

The House will meet at 9:00 AM for legislative business. See, Rep. Cantor's schedule for the week.

PRESCHEDULED FROM SEPTEMBER 20. 10:00 AM - 12:00 NOON. The House Science Committee's (HSC) Subcommittee on Investigations and Oversight will hold a hearing titled "The Impact of International Technology Transfer on American Research and Development". The HSC will webcast this hearing. Location: Room 2318, Rayburn Building.

10:00 AM - 3:00 PM. The Department of Health and Human Services' (DHHS) Office of the National Coordinator for Health Information Technology's (ONCHIT) HIT Policy Committee will meet. Open to the public. See, notice in the Federal Register, Vol. 77, No. 210, October 30, 2012, at Pages 65691-65692. Location: Dupont Circle Hotel, 1500 New Hampshire Ave., NW.

12:00 NOON - 1:00 PM. The American Bar Association (ABA) will host a webcast and teleconferenced panel discussion titled "Perspectives on Canada's New Copyright Laws: Bill C-11". The speakers will be Jerry Cohen (Burns Levinson), David Kent (McMillan), Sarah Kilpatrick (McMillan), Stephen Zolf (Heenan Blaikie), and Johanna Dennis (Southern University Law Center). Prices vary. No CLE credits. See, notice.

TIME?. The Federal Communications Commission's (FCC) Communications Security, Reliability, and Interoperability Council (CSRIC) will meet. Location: FCC, Commission Meeting Room, Room TW-C305, 445 12th St., SW.

POSTPONED. 6:00 - 8:15 PM. The Federal Communications Bar Association's (FCBA) Transactional Committee will host an event titled "Verizon/SpectrumCo: Issues and Process -- Anatomy of a Transaction". CLE credits. Prices vary. See, notice.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-90 C [50 pages in PDF] titled "Recommendation for Random Bit Generator (RBG) Constructions".

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-90 B [78 pages in PDF] titled "Recommendation for the Entropy Sources Used for Random Bit Generation".

Deadline to submit comments to the Copyright Office (CO) regarding creating a "resale royalty right" for visual artists. See, original notice in the Federal Register (FR), Vol. 77, No. 182, September 19, 2012, at Pages 58175-58179, and extension notice in the FR, Vol. 77, No. 200, October 16, 2012, at Page 63342. See also, story titled "Copyright Office Requests Comments on Creating a Resale Royalty Right for Visual Artists" in TLJ Daily E-Mail Alert No. 2,464, October 18, 2012.

Thursday, December 6

Rep. Cantor's schedule for the week states that "no votes are expected".

8:15 AM - 3:30 PM. The Computer and Communications Industry Association (CCIA) and George Washington University's (GWU) Institute for International Economic Policy (IIEP) will host an event titled "Can Trade Policies and Agreements Advance Internet Freedom?". Free. Open to the public. Location: GWU, Elliot School of International Affairs, Lindner Commons, 6th floor, 1957 E St., NW.

9:00 AM. The House Intelligence Committee (HIC) will hold a closed meeting. See, notice. Location: Room HVC-304, Capitol Visitor Center.

8:00 or 9:00 - 11:00 AM. The President's Export Council will meet. The Department of Commerce (DOC) has advertised the start time as both 8:00 AM and 9:00 AM. See, notice and notice in the Federal Register, Vol. 77, No. 224, November 20, 2012, Pages 69591-69592. Location: undisclosed.

9:30 AM - 12:15 PM. The Phoenix Center for Advanced Legal & Economic Public Policy Studies will to host an event titled "Conference to Examine Impact of Election on U.S. Broadband Policy". The speakers will be Rep. Marsha Blackburn (R-TN), Ajit Pai (FCC Commissioner), Michael McCurry, Rich Galen, Kathy Brown (Verizon), and James Cicconi (AT&T). Location: Phoenix Center, Suite 440, 5335 Wisconsin Ave. NW.

10:00 AM. The Senate Judiciary Committee (SJC) will hold an executive business meeting. The agenda includes consideration of S 1223 [LOC | WW], the "Location Privacy Protection Act of 2011", sponsored by Sen. Al Franken (D-MN).The agenda also again includes consideration of the nominations of Katherine Failla (USDC/SDNY), Troy Nunley (USDC/EDCal), Sheri Chappell (USDC/MDFl), Pamela Ki Mai Chen (USDC/EDNY), and Mark Barnett (U.S. Court of International Trade). See, notice. Location: Room 226, Dirksen Building.

12:00 NOON - 1:30 PM. The National Economists Club will host a lunch. The speaker will be Robert Atkinson (ITIF). Prices vary. See, notice and registration page. Location: ITIF/ITIC, Suite 610A, 1101 K St., NW.

12:00 NOON - 2:00 PM. The Federalist Society will host a lunch and panel discussion titled "Private Attorneys and the War on Terror". The speakers will be Nitsana Leitner (Israel Law Center), Steven Bradbury (Dechert), and Stephen Vladeck (American University law school). See, notice and registration page. Free. No CLE credits. Location: National Press Club, 13th Floor, 529 14th St., NW.

2:00 - 2:30 PM. The Information Technology and Innovation Foundation (ITIF) will hold a news conference by teleconference to release and discuss the ITIF's report titled "2012 State New Economy Index". The speakers will be Rob Atkinson (ITIF) and Luke Stewart (ITIF). For call in information, contact Alexis Fearon at afearon at itif dot org or 202-524-4390.

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

Friday, December 7

Rep. Cantor's schedule for the week states that "no votes are expected".

8:30 AM. The Department of Labor's (DOL) Bureau of Labor Statistics (BLS) is scheduled to release its November 2012 unemployment data.

Monday, December 10

9:00 AM - 5:30 PM. The Department of Justice's (DOJ) Antitrust Division and the Federal Trade Commission (FTC) will hold a workshop titled "Patent Assertion Entity Activities". See, notice and agenda. Location: FTC, Satellite Building and Conference Center, 601 New Jersey Ave., NW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [57 pages in PDF] regarding cable TV technical rules. The FCC adopted and released this item on August 3, 2012. It is FCC 12-86 in MB Docket No. 12-217. See, notice in the Federal Register Vol. 77, No. 195, October 9, 2012, at Pages 61351-61375. See also, TLJ story titled "FCC Adopts NPRM Regarding Cable TV Technical Rules" in TLJ Daily E-Mail Alert No. 2,421, August 5, 2012.