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Tech Law Journal |
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10/10. The U.S. Court of Appeals (FedCir) issued its opinion [exe - MS Word] in On-Line Careline v. America Online, affirming two opinions of the USPTO Trademark Trial and Appeal Board (TTAB). On-Line CareLine, an ISP, sought to register the mark ON-LINE TODAY. America Online (Compuserve) previously registered the mark ONLINE TODAY. The court held that there is a likelihood of confusion between the two marks. 10/11. The European Commission approved the merger of AOL and Time Warner after AOL offered to sever all structural links with German media group Bertelsmann AG. See, EU release. European Competition Commissioner Mario Monti had this to say: "The Commission has a duty to prevent creation of dominant positions in all sectors, be they in the old or new economy. In a music market already characterized by a high degree of consolidation, the danger, which has been averted, was that by allowing AOL to team up effectively with three of the five music majors the resulting integrated company could have dominated the on-line music distribution market and music players." 10/11. FCC General Counsel Chris Wright sent a letter [PDF] to AOL and Time Warner stating that the FCC is delaying its consideration of the AOL Time Warner merger. The FCC will delay its proceeding until the FTC, the agency that has statutory authority to conduct an antitrust merger review proceeding, has completed its review. "We are today stopping the clock" said Wright. "Once the Federal Trade Commission has acted, we will promptly publish an anticipated timeline for FCC action." 10/11. The Senate passed HR 3244 by a vote of 95 to 0. This is a crime bill; however, Section 2004 is the Twenty First Amendment Enforcement Act (stand alone bills HR 2031 and S 577). It allows state attorney generals to bring suits in U.S. District Court to enforce state alcohol laws. It is also known as the Internet alcohol sales bill. See also, TLJ Summary of Bills Affecting Internet Alcohol Sales. 10/11. The U.S. Court of Appeals (DCCir) issued its order [PDF] setting the briefing schedule in the Microsoft antitrust case: • Brief for appellant (150 pages max.) Nov. 27, 2000 • Brief(s) for amici in support of appellant (25 pages each) Nov. 27, 2000 • Brief for U.S. (125 pages) Jan. 12, 2001 • Joint brief for the state appellees (25 pages) Jan. 12, 2001 • Brief(s) for amici in support of appellees (25 pages each) Jan. 12, 2001 • Reply brief for appellant (75 pages) Jan. 29, 2001 • Joint appendix Jan. 29, 2001 • Final briefs Feb. 9, 2001 10/11. The Census Bureau released data that shows that state government tax revenues increased 5% from 1998 to 1999. See, release. Also, the data shows that General Sales and Gross Receipts taxes increased from $156,061,702 to $165,717,430. Opponents of the Internet Tax Freedom Act, which imposed a temporary moratorium on new discriminatory taxes on the Internet, asserted that states would lose sales tax revenues. 10/11. The American Enterprise Institute (AEI) hosted a panel discussion titled "Trade Policy and the Presidential Election." Rep. Jim Kolbe (R-AZ) stated that a major difference between Gore and Bush is that Gore wants fast track authority to include labor and environmental issues, while Bush want fast track authority without these social issues. Rep. Sander Levin (D-MI) stated that Republicans tend to believe that "you should not try to shape globalization -- it will shape itself," while Democrats, including Gore, tend to believe that "you have to shape globalization -- problems will not solve themselves" and this includes "labor and environmental issues." Ira Shapiro, a former General Counsel of the USTR, stated that the Clinton/Gore administration has a strong record on free trade. He cited NAFTA, the Uruguay Round, PNTR for China, and the telecom agreement as its major accomplishments. The AEI moderator asked why, if labor and environmental issues are not a part of the WTO process, intellectual property rights should not also be excluded. "IPR are traded items," said Mike Smith, a USTR negotiator from 1979 through 1988. "Human rights are not traded items." 10/11. The House Commerce Committee's Telecom Subcommittee held a hearing on online privacy. Several members stated that no more privacy bills will pass in the 106th Congress, but that this will be an important issue in the next Congress. Subcommittee Chairman Rep. Billy Tauzin (R-LA) criticized the privacy practices of federal government web sites. See, statement. House Internet Caucus Co-Chairman Rep. Rick Boucher (D-VA) stated that he would be part of a "working group" that will work with other Representatives and Senators, government officials, and companies and groups, to develop new privacy legislation before the 107th Congress meets in January. Rep. Chris Cox (R-CA) advocated a system based upon giving individuals a property right in their personal information. See also, prepared statements of witnesses: • Bob Goodlatte (R-VA). • Clay Shaw (R-FL). • Sally Katzen (OMB). • Linda Koontz (GAO). • Roger Baker (Commerc Dept.) • Robert Pitofsky (FTC). • Larry Chiang (MoneyForMail.com). • Glee Cady (Privada). • Parry Aftab (Darby & Darby). • Mike Griffiths (Match Logic). • Andrew Shen (EPIC) 10/11. The Consumer Federation of America and the Consumers Union (CU) released a "digital divide" report [34 pages in PDF] titled "Disconnected, Disadvantaged, and Disenfranchised." It states that "the 'digital divide' that separates those Americans connected to the Internet from those who are not persists and is not likely to disappear any time soon." In a release accompanying the report, CU chief Gene Kimmelman stated that "We should direct tax dollars or subsidies to the people who cannot afford technology ..." 10/11. Chipshot.com filed a Chapter 11 petition in U.S Bankruptcy Court (NDCa). 10/10. Bill Clinton signed HR 4444, a bill extending permanent normal trade relations status to the People's Republic of China. See, statements at signing ceremony by Clinton, Rep. Hastert, Sen. Roth, Rep. Archer, Sen. Moynihan, Rep. Rangel, and Sec. Albright. 10/10. ICANN announced the results of its election of large members. Karl Auerbach won the seat for North America. He works in the Advanced Internet Architectures group at Cisco. He ran a "reform" campaign in which he condemned "the capture of ICANN by special interests - particularly pro-trademark groups and name registries and registrars." He is also a non-practicing attorney, and a member of the Calif. State Bar and its intellectual property section. See also, Auerbach campaign web site. German Andy Mueller-Maguhn won the seat for Europe. He is the Speaker of the Chaos Computer Club. Brazilian Ivan Moura Campos, the CEO of Akwan Information Technologies, won the seat for Latin America and the Carribean. Masanobu Katoh easily won the seat for Asia, Australia and the Pacific. He is Japanese, and works for Fujitsu, but lives in the suburbs of Washington DC. Nii Quaynor won for Africa. See also, elections results page. 10/10. FCC Chairman Wm. Kennard gave a blunt speech titled "What Does $70 Billion Buy You Anyway? Rethinking Public Interest Requirements at the Dawn of the Digital Age" in which he harshly criticized broadcasters on two fronts: delay in deploying digital TV, and failure to carry more debates and election content. He called broadcasters "spectrum squatters." See also, FCC release and TLJ story. 10/10. The Supreme Court of the U.S. denied NextWave's petition for writ of certiorari. See, Orders List [PDF] at page 5. NextWave obtained licenses at the FCC's C-block auctions in 1996, but was unable to make payments, and filed for bankruptcy. The FCC cancelled the licenses, but was blocked by the bankruptcy court. The District Court affirmed. The U.S. Court of Appeals (2nd Cir.) issued its order reversing and remanding the case on Nov. 24, 1999; it issued its opinion explaining its reversal in May 2000. The Supreme Court made no comment. FCC Chairman Wm. Kennard said that "This is another chapter closed. This is an important step in proceeding toward the December 12 auction." See, FCC release. 10/10. The RIAA and NMPA announced that they will license musical compositions for distribution on the Internet. Transactions will be handled by The Harry Fox Agency, a wholly owned subsidiary of the NMPA. "This opens a new era in the licensing of music on the Internet," stated NMPA CEO Edward Murphy in a press release. "Broad utilization by distributors of the licensing resources of HFA will make getting licensed music into the hands of the consumer that much easier. The arrangement will also enable accurate identification of Internet music files, a critical requirement for copyright owners and their songwriter partners." See, RIAA release. 10/10. Mark Simeon Jakob entered a plea of not guilty in U.S. District Court (CDCa) in the Emulex Internet hoax prosecution. 10/10. Microsoft filed three complaints in U.S. District Court (NDGa) against three Atlanta area businesses alleging distribution of counterfeit Microsoft software, including Office 2000, the Windows 98 and Windows NT Workstation operating systems, and BackOffice Server. See, MSFT release. 10/9. Atmel and Information Storage Devices (ISD) settled their lengthy legal disputes, including a lawsuit pending in the U.S. District Court (NDCa). See, ISD release. ISD stated that under the settlement agreement, "Atmel granted ISD a license to certain technology, including U.S. Patent No. 4,511,811, entitled 'Charge Pump for Providing Programming Voltage to the Word Lines in a Semiconductor Memory Array.' All other terms of the agreement are confidential." Atmel filed a complaint in U.S. District Court on June 15, 1995 alleging patent infringement, trade secret misappropriation, and other causes of action. Atmel also filed a complaint with the USITC. Atmel, based in San Jose, Calif., makes advanced logic, mixed-signal, nonvolatile memory, and RF semiconductors. Atmel also provides system-level integration semiconductor solutions using CMOS, BiCMOS, BiPolar and SiGe process technologies. ISD, which is now a wholly owned subsidiary of Winbond Electronics, makes semiconductor voice products, including ChipCorder. See also, Atmel releases of May 26, 2000 and July 2, 1998, and ISD release of Jan. 6, 2000. 10/9. The BSA presented Irish Prime Minister Bertie Ahern with its "Cyber Champion Award." The BSA cited his work in "overseeing legislative adoption of the most modern copyright and electronic signature laws in Europe." 10/9. "The Senate Judiciary Committee held a field hearing in a crowded auditorium at BYU titled "Utah's Digital Economy and the Future: Peer-to-Peer and Other Emerging Technologies." Sen. Orrin Hatch (R-UT) presided. Napster founder Shawn Fanning testified. 10/6. The FTC released a report [PDF] titled "Federal Trade Commission Strategic Plan: Fiscal Years 2000-2005." The report addresses the FTC's plans for enforcing both consumer protection and antitrust laws. "The explosive growth of electronic commerce has greatly affected the FTC's mission," states the report. Also, "the FTC must be alert to practices designed to entrench market power and deny consumers the benefit of new forms of competition, such as ... use of the intellectual property rights in one market to gain unfair competitive advantage in another market." See also, TLJ story. 10/6. The House passed the conference report on HR 3244 (House Report 106-939), the Trafficking Victims Protection Act, by a vote of 371-1. Section 2004 of this bill is the Twenty First Amendment Enforcement Act, which, before being added to this crime bill, was a stand alone bill (HR 2031 and S 577). It allows state attorney generals to bring suits in U.S. District Court to enforce state alcohol laws. It is also known as the Internet alcohol sales bill. The bill is supported by liquor distributors who seek to limit competition from Internet sales, and some states which seek to collect taxes on all alcohol sales. Supporters describe the bill as a measure to limit the sale of alcohol to minors over the Internet. California wineries opposed the bill. See also, TLJ Summary of Bills Affecting Internet Alcohol Sales. 10/6. The House passed HR 5362, a bill to raise fees for H1B visas from $500 to $1,000, except for certain educational and non-profit employers. Rep. Chris Cannon (R-UT) said that "this bill adds the final piece to the H-1B legislation that we passed earlier this week. There is widespread consensus that the $500 fee for an H-1B visa application should be increased. The money collected in fees goes toward job training for American workers and scholarships for American students studying math and science. These programs will provide the long-term solution to the shortage of information technology workers plaguing our economy." This bill was passed pursuant to an agreement reached for passage of the bill increasing the annual cap on the number of H1B visas earlier in the week. (U.S.C.) See also, TLJ Summary of High Tech Worker Visa Bills. 10/6. The House Government Reform Committee's Government Management, Information, and Technology Subcommittee held a hearing titled "Oversight Hearing on the Management Practices of the Federal Communications Commission: The Chairman Reports." See, prepared statements of Walker Feaster (FCC Inspector General), Adam Thierer (Heritage Foundation), Jeffery Eisenach (The Progress & Freedom Foundation), and William Kennard (FCC Chairman). Thierer and Eisenach criticized the FCC for its over regulation, increasing budgets, and exercise of powers not delegated to it by statute. 10/6. The House Commerce Committee's Telecom Subcommittee held a hearing titled "Part II: The Future of the Interactive Television Services Marketplace: What Should Consumers Expect?" 10/6. A report [PDF] released by Privacilla.org states that the White House for Kids web site violates federal privacy policy. The Children's Online Privacy Protection Act (COPPA), which requires web site operators to obtain parental consent before collecting personal information from children, was enacted into law in late 1998. On June 22, the OMB issued a Memorandum that directs that all government web sites, and their contractors, should also comply with the standards contained in the COPPA. The Privacilla.org report also argues that the COPPA is "overly prescriptive", that "government privacy regulations will carry substantial burdens and have unintended consequences", that "governments, as the biggest collectors and users of personal information, are not good stewards of privacy", and that "loss of privacy is one price of big government". 10/6. The Navy and Marine Corps announced the award of an Intranet contract to EDS. The contract is valued at more than $6.9 Billion over eight years. See, EDS release and Navy release. 10/6. Fox News and TheStreet.com announced that they settled the lawsuit Fox News commenced against TheStreet.com concerning TheStreet.com's television program that ran on the Fox News. See, TheStreet.com release. 10/6. Freei Networks Inc. filed for Chapter 11 bankruptcy in the Western District of Washington. 10/6. Rambus, which is involved in a patent dispute with Hyundai, made three announcements. (1) Rambus filed a motion for a change of venue in Hyundai's patent suit, from the U.S. District Court for the Northern District of California at San Jose, to the Eastern District of Virginia at Alexandria. (2) Rambus will file a counterclaim for patent infringement. (3) Rambus filed a motion to dismiss its complaint with the USITC. See, Rambus release. Hyundai filed a complaint in U.S. District Court on Aug. 29 alleging that certain Rambus patents are invalid, unenforceable, and not infringed by any Hyundai products. See, Hyundai release of Aug. 29. 10/6. The USITC instituted an investigation of certain SDRAM devices and modules used in computers and other electronic devices. Rambus filed a complaint on Sept. 11, 2000, and supplemented it on Sept. 26, which alleges violation of § 337 of the Tariff Act of 1930 for the importation into the U.S., and sale within the U.S., of SDRAM products that infringe U.S. patents owned by Rambus. Rambus requested that the ITC issue a permanent exclusion order and a permanent cease and desist order. The case has been assigned to ITC administrative law judge Sidney Harris. (Inv. No. 337-TA-437) See, ITC release. 10/5. The SEC filed a complaint in U.S. District Court (DHa) against Robert Moore, individually, and doing business as the Kingdom of Enenkio. The complaint alleges that Moore used a web site, e-mail, and Internet bulletin board postings to offer for sale "Enenkio Gold War Bonds" in violation of federal securities laws. Judge Susan Mollway issued a temporary restraining order against further violation of securities laws, and freezing assets. (Case No. CV 0000651 SOM) The Kingdom of Enenkio web site asserts that Wake Island is a sovereign state. The war bonds web page does not specify Enenkio's planned military operations. However, the Kingdom also sells stamps. See also, SEC release. 10/5. Several intellectual property and technology groups, including the AIPLA, IPO, INTA, BSA, and ITAA, sent a letter to OMB Director Jacob Lew urging the Clinton administration to support USPTO funding at least at the level contained in the Senate's appropriations bill for Commerce, Justice, State and the Judiciary (CJS) for FY2001. The Congress has not yet passed the CJS appropriations bill. The administration has long supported diverting some fees collected by the USPTO to fund other government programs. Intellectual property groups, and Rep. Howard Coble (R-NC), have advocated ending this diversion. The Senate bill diverts only $33 Million. The House version diverts an additional $267 Million. For background, see, TLJ stories regarding House CIP Subcommittee action (March 26), House vote on Coble amendment (June 25), analysis of vote on Coble amendment (June 25),and Senate Appropriations Committee action (July 19). 10/5. The SEC filed a civil complaint in U.S. District Court (NDCa) against Walter Königseder, formerly a VP of Informix. The SEC alleges that Königseder aided and abetted Informix's material overstatement of quarterly and annual revenue and earnings in 1996, and further, that he lied about his knowledge of, and involvement in, the transactions. The complaint alleges violation of antifraud, reporting, record-keeping, and internal control provisions of the Securities Exchange Act of 1934, and seeks injunctive relief. The SEC also announced that its investigation is continuing. See, SEC release. 10/5. The U.S. Attorney (NDCa) obtained a criminal indictment of Königseder for wire fraud and criminal securities violations. 10/5. The Senate Judiciary Committee approved an amendment in the nature of a substitute to S 2448 [PDF], the Internet Integrity and Critical Infrastructure Protection Act of 2000. The original bill would have amended current law regarding sending transmissions intending to cause damage, and intentionally accessing computer and recklessly causing damage, to eliminate the jurisdictional triggers and to criminalize as misdemeanors all such offenses, whether or not they cause $5,000 loss or other specified injury. The amendment adopted by the Committee retains the $5,000 threshhold. See also, Sen Patrick Leahy's (D-VT) statement summarizing the changes made in the amendment. 10/5. The House Commerce Committee approved HR 3011, the Truth in Telephone Billing Act of 1999. The Committee Print [PDF], was adopted by a voice vote, after an Amendment [PDF] offered by Rep. John Dingell (D-MI) was adopted by a voice vote. The bill would require phone companies that are required to assess charges to support the FCC's e-rate program to explain these charges on customers' monthly bills. The bill is supported by the ILECs, and opposed by the FCC. Specifically, it provides that "A telecommunications carrier that is required to contribute to, or that is otherwise assessed for, any support mechanism under section 254, or any other governmental mechanism, fund, tax, or program, shall identify on each subscriber’s bill, in simple, plain language ... the identity of the governmental ... program to which the contribution or assessment is made, and the identity of the governmental authority whose rules require or authorize the contribution or assessment ..." 10/5. The U.S. Chamber of Commerce, the AFL-CIO, and the Communications Workers of America announced their opposition to legislation proposed by Sen. Ernest Hollings (D-SC) that would restrict foreign government ownership of U.S. telecom companies. See, Chamber release and CWA release. Sen. Hollings' bill, S 2793, would provide that no FCC license can be held by a company that is more than 25% controlled by a foreign government -- such as Deutsche Telekom. 10/5. The House Science Committee's Subcommittee on Technology held a hearing titled "Rural Access To Technology: Connecting The Last American Frontier." 10/5. The COPA Commission held the second of two days public meetings regarding the writing of its report to Congress. The COPA Commission is a congressionally appointed panel mandated by the Child Online Protection Act to write a report that identifies "technological or other methods that will help reduce access by minors to material that is harmful to minors on the Internet." 10/5. Microsoft filed its Reply In Support Of Its Motion For An Order Governing Further Proceedings with the U.S. Court of Appeals (DCCir) in the antitrust case. Microsoft seeks a slow briefing schedule, and long briefs. The government seeks a faster briefing schedule and shorter briefs. Microsoft accused the government of seeking "to short-circuit the appellate process by curtailing both the scope of Microsoft’s submissions and the time allowed for their preparation." 10/5. The U.S. Court of Appeals (DCCir) heard oral argument in Eldred v. Reno, a case challenging the constitutionality of the Copyright Term Extension Act. The three judge panel is comprised of Judges Ginsburg, Sentelle and Henderson. 10/5. The USITC voted to institute an investigation of certain WAP compatible wireless communication devices and components, including Internet access capable cell phones and pagers. Geoworks filed a complaint on Sept. 8 alleging that the importation into the U.S. of WAP devices and components infringes its U.S. patent in violation of § 337 of the Tariff Act of 1930. The respondents are Phone.com, Sanyo, and Sanyo's U.S. subsidiary. See, ITC release. WAP is an open, global specification which gives mobile users with wireless devices the opportunity to access and interact with information and services. The protocol is developed by WAP Forum. 10/5. The USITC issued a Notice of Investigation that a complaint was filed with the ITC on Sept. 11, and supplemented on Sept. 26, under § 337 of the Tariff Act of 1930, on behalf of Rambus, which alleges violations of § 337 in the importation into the U.S. of certain synchronous dynamic random access memory devices and modules and products containing the same by reason of infringement of Rambus patents. 10/5. The EPIC published in its web site JPEG copies of documents which it obtained from the FBI about its Carnivore e-mail surveillance system, as a result of its FOIA request and lawsuit. 10/5. FCC Chairman Wm. Kennard gave a speech to the Telecommunication Industry Association in Washington DC. "We are in danger of suffering a “spectrum drought” in our country. And from my vantage point, everybody seems to have a different solution to this problem," said Kennard. "The band manager auction is an important start. But much more must be done. As the Internet migrates from the personal computer into web-enabled wireless devices, spectrum scarcity has emerged as a major “gating factor” in the New Economy. Some estimate that we will need as much as 300 MHz of additional spectrum to meet the bandwidth demands of the wireless web." He offered several suggestions, including "secondary markets for underused spectrum". He also state that "software defined radios can be used to manage spectrum more efficiently. They allow users to operate over wide areas of spectrum in efficient ways. Let us harness software defined radio technology to head off a spectrum drought." See also, FCC release. 10/5. EMI and Time Warner informed the European Commission that they have decided to terminate their merger agreement. See, EU release and Time Warner release. 10/4. The House Judiciary Committee released its report on HR 5018, the Electronic Communications Privacy Act of 2000. See, Rept. 106-932. See also, TLJ Summary of HR 5018. 10/4. The FCC issued an Order [PDF] suspending its "political editorial and personal attack" rules for 60 days. The order, which also asks for broadcasters to submit information regarding the rules, is the FCC's latest action in this ancient proceeding regarding the regulation of political speech of broadcasters. The rules require broadcasters to give free air time to if they make campaign endorsements or personal attacks. Broadcasters do not like the rule, and have challenged its constitutionality. On Aug. 3, 1999, the U.S. Court of Appeals (DCCir) issued its Opinion in RTNDA case. The Court ruled that "Without a clear explanation for the rules, the court is not in a position to review whether they continue to serve the public interest, and whether they burden First Amendment interests too severely. The court, therefore, cannot affirm the FCC's order, but neither can it conclude that the FCC could not on remand justify the rules consistently with principles of administrative law. Accordingly, rather than enjoining enforcement of existing rules that the FCC might be able to justify, we must remand the case for the FCC to further explain its decision not to repeal or modify them." The FCC then did nothing for 14 months. Now it asks for more information. FCC Commissioners Tristani and Ness support the rules. Commissioner Powell wrote a scathing dissent which attacked both the delaying tactics of the FCC, and the underlying merits of the rules. (His dissent is attached to the FCC Order). Commissioner Furchtgott-Roth also wrote a vigorous dissent. 10/4. The COPA Commission held the first of two days public meetings to write its report to Congress. The COPA Commission is a congressionally appointed panel mandated by the Child Online Protection Act to write a report that identifies "technological or other methods that will help reduce access by minors to material that is harmful to minors on the Internet." 10/4. The CATO Institute hosted a panel discussion titled "Will the FSC Dispute Ignite a Transatlantic Trade War?" The speakers were Rep. Phil English (R-PA), John Richardson (European Commission), Willard Berry (European American Business Council), and Gary Hufbauer (Institute for International Economics). Richardson condemned the FSC (which the WTO found to be an illegal export subsidy), and its replacement, HR 4986 (which has passed the House, but not the Senate). Rep. English defended U.S. tax policy. The FSC benefits U.S. companies that sell products abroad, such as Microsoft. If a retaliatory trade war occurs, U.S. high tech companies may be targeted. 10/4. The U.S. District Court (DUt) awarded Novell over $2 Million in damages from Myung Je. Novell filed a complaint against Myung Je, a Korean company, in May 1998, alleging breach of its OEM agreement with Novell, trademark infringement, and copyright infringement. See, Novell release. 10/4. Alan Fried filed a petition for writ of certiorari with the Supreme Court of the U.S. In 1996 Fried started radio broadcasting dance music in Minneapolis at 20 watts. He had no FCC license. The FCC seized his equipment. The FCC recently adopted rules for the licensing of low power FM stations. However, as a prior unlicensed broadcaster, Fried is ineligible. Also, the House has passed a bill limiting the FCC's authority to issue low power FM licenses. That bill is pending in the Senate. Fried raises First Amendment and other Constitutional issues. He is represented by the Institute for Justice. See, release. 10/4. John Nannes was named Acting Principal Deputy Assistant Attorney General for the Antitrust Division. He replaces Doug Melamed, who moved up to Acting Assistant Attorney General after Joel Klein's departure. Nannes went to work at the DOJ in 1998; he previously was a partner in the law office of Skadden Arps. See, DOJ release. Jeff Blattner, in turn, was named a Deputy Assistant Attorney General. He is a former political aide to Sen. Ted Kennedy (D-MA) who was brought into the Antitrust Division to work on Microsoft matters. See, DOJ release. 10/4. The Kansas Corporation Commission approved Southwestern Bell’s request to offer long distance service in Kansas. See also, SBC release and AT&T reaction. 10/4. MP3.com, a company which has been sued for copyright infringement, hired Luntz Research Cos. to conduct a poll of Internet users regarding copying music files on the Internet. The poll found that Internet users support positions taken by MP3.com. See, release. 10/3. pac.com, a California based political action committee that receives contributions from high tech companies and executives, renewed its July 28 request for an advisory opinion from the Federal Election Commission (FEC). pac.com receives money contributions, as well as in kind contributions of corporate stock -- both in companies whose stock is traded on exchanges such as the NASDAQ, NYSE, and AMEX, and companies whose stock is not traded on any public exchange. pac.com seeks a determination from the FEC that for contribution reporting purposes, the fair market value of stock contributions, for stock that is not traded on any public exchange, is "the price per share of such stock for which its purchase was offered to investors at the most recent round of financing ..." pac.com is represented in this matter by Ronald Turovsky of the law office of Manatt Phelps & Phillips. (AOR No. 2000-30.) 10/3. The Senate passed S 2054, the American Competitiveness in the Twenty-first Century Act of 2000, by a vote of 96 to 1. The bill increases the annual cap on H1B visas, which enable aliens with tech skills to work in the U.S. for high tech companies. S 2045 increases the number of non-immigrant alien workers annually allowed into the country on an H1B visa from the current level of 115,000 to 195,000 over the next three years. The current cap of 115,000 visas for FY 2000 was filled in less than six months. The visa limit drops to 107,500 visas for FY 2001, which began on Oct. 1, and to 65,000 visas in FY 2002. The bill also raises application fees from $500 to $1,000. The House Judiciary Committee passed a different H1B bill, HR 4227, the Technology Worker Temporary Relief Act, sponsored by Rep. Lamar Smith (R-TX). That bill would have temporarily removed the cap on H1B visas, but included several American worker protection provisions. See, Tech Law Journal Summary of H1B Bills. 10/3. The House passed S 2045, without further amendment, by a voice vote, after a brief debate. Bill Clinton will sign the bill. 10/3. The Children’s Advertising Review Unit (CARU) of the Council of Better Business Bureaus announced that the Walt Disney Internet Group (WDIG), a division of the Walt Disney Company, created "a mechanism by which all children under 13, even those who have permission to chat, will be prevented from entering any unmoderated WDIG chat rooms." See, CARU release. The Congress passed the Children's Online Privacy Protection Act in late 1998; the Act went into effect in April. The Act prevents web site operators for collecting personal information from children without parental consent. 10/3. The Senate Judiciary Committee passed its H1B bill in March, and the House Judiciary Committee passed its H1B bill in May. Further consideration was delayed, as Democrats in the Senate insisted on attaching unrelated immigration proposals to the H1B bill. Al Gore released a statement. Quote: "I am disappointed that the Senate bill does not include the Latino Immigration Fairness Act." Rep. David Dreier (R-CA) said, "it’s regrettable that Democratic gamesmanship held up this high-tech priority for months." See, release. 10/3. The House passed HR 3850, the Independent Telecommunications Consumer Enhancement Act of 2000, sponsored by Rep. Barbara Cubin (R-WY). The bill would provide regulatory relief for local exchange carriers with fewer than 2% of the subscriber lines in the U.S. 10/3. The House passed HR 3484, sponsored by Rep. Bill McCollum (R-FL), the Child Sex Crimes Wiretapping Act of 1999. The bill would provide that certain sexual crimes against children are predicate crimes for the interception of communications. 10/3. Rep. Howard Berman (D-CA) introduced HR 5364, the Business Method Patent Improvement Act of 2000. See, Tech Law Journal story. 10/3. Rep. Chris Cox (R-CA) introduced HR 5365, the Financial Accounting for Intangibles Reexamination (FAIR) Act. It would delay for one year the proposed elimination of the pooling of interests method of accounting for mergers. It provides that a final decision by the Financial Accounting Standards Board (FASB) must await the results of a comprehensive study of the appropriate methods of accounting for intangibles. Background: The House Commerce Committee's Finance Subcommittee, of which Rep. Cox is a member, held a hearing on this issue on May 4. See, hearing documents. 10/3. The Senate Commerce Committee held yet another hearing on Internet privacy. Several bills are pending, including S 2928, the Consumer Internet Privacy Enhancement Act, a bill introduced by Committee Chairman Sen. John McCain (R-AZ). Senators conceded that it is too late in the 106th Congress to pass privacy legislation. Sen. McCain stated that "I look forward to engaging in this process as move toward the next Congress and I commit to reporting legislation from the Committee and working for its passage on the floor." See, statement [PDF]. See also, prepared testimony of witnesses [PDF]: • George Vradenburg (AOL). • Simson Garfinkel (author). • Marc Rotenberg (EPIC). 10/3. The government filed its response [PDF] to Microsoft's motion regarding the briefing schedule in the U.S. Court of Appeals (DC) in the Microsoft antitrust case. It asked for a faster briefing schedule, and shorter briefs. Under the government's proposed schedule, Microsoft's principal brief would be due by Nov. 1, and be limited to 24,000 words. The opposition brief would be due Dec. 8, and be limited to 24,000 words. Finally, Microsoft's reply brief would be due by Dec. 22, and be limited to 7,000 words. (Response to Microsoft's Motion for an Order Governing Further Proceedings, U.S.C.A. Nos. 00-5212 and 5213.) The SIIA released a statement supporting the government's request. 10/3. The FTC extended the time for filing comments on information privacy rules for financial institutions under Section 501(b) of the Graham Leach Bliley bill until October 24. See, Federal Register Notice [PDF]. Under § 501 the FTC and other federal agencies are required to establish appropriate safeguards standards for financial institutions to protect certain customer nonpublic records and information. For background, see original March 1, 2000 Federal Register Notice [PDF] requesting public comment. 10/2. The FTC filed a complaint in U.S. District Court (SDNY) against Verity International alleging unfair or deceptive trade practices in violation of §5 of the Federal Trade Commission Act. Defendants operate a porn web site that fraudulently billed users for telephone calls to Madagascar that did not take place. The FTC obtained a temporary restraining order. See, release. 10/2. Microsoft filed its Motion for an Order Governing Further Proceedings with the U.S. Court of Appeals (DC). It requested "that each side be given 60 days to prepare its principal brief and that Microsoft be given 30 days to prepare its reply brief." It also requested that principal briefs may be overlength -- up to 56,000 words. 10/3. Pseudo Programs, which provided streaming media, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the (SDNY). 10/3. Network Solutions announced that the NSI Registrar will begin registering domain names in Chinese (simplified and traditional), Japanese and Korean. See, release. 10/3. ICANN published a list of applications for new TLDs. 10/3. The SEC announced six promotions in its Division of Corporation Finance. It named named Paula Dubberly Chief Counsel. She replaces Catherine Dixon. The SEC also named Barbara Jacobs Asst. Director in charge of the Office of Computers and Online Services. She replaces James Daly. See, release. 10/2. Rep. Lamar Smith (R-TX) introduced HR 5350, a bill to exempt agreements relating to voluntary guidelines governing telecast material, movies, video games, Internet content, and music lyrics from the applicability of the antitrust laws. 10/2. The USTR announced results of its ongoing reviews of Canada and Peru under § 1377 of the Omnibus Trade and Competitiveness Act of 1988, regarding the operation and effectiveness of U.S. telecom trade agreements. The USTR criticized Canada for maintaining a universal service system which impedes competition. See, USTR release. 10/2. U.S. Philips Corp. filed a complaint in U.S. District Court (SDNY) against Analog Devices and five other semiconductor companies alleging infringement of patent rights in inter-integrated circuit bus technology. Philips makes consumer electronics, lighting, and semiconductor products. Analog, based in Norwood, Mass., makes integrated circuits used in analog and digital signal processing applications. 10/2. The House rejected HR 4049, the Privacy Commission Act, on a roll call vote of 250-146. The bill was considered under a suspension of the rules, meaning that a 2/3 majority was required for passage. It fell 14 votes short. The bill, which is sponsored by Rep. Asa Hutchinson (R-AR) and Rep. James Moran (D-VA), would create a 17 member commission to study a broad range of privacy issues, involving both the government and private sector, and including medical and financial records. See, statement by Rep. Hutchinson. A companion bill is pending in the Senate. The Congress is on the verge of recessing. 10/2. The House Government Reform Committee's Government Management, Information, and Technology Subcommittee held a hearing titled "FirstGov.gov: Is it a Good Idea?" The site is a portal for government information. Its primary function is a search engine. Eric Brewer, Chairman of the Federal Search Foundation (and co-founder of Inktomi) stated that the site has indexed 27 Million documents in government web sites. Witnesses from OMB and GSA praised the web site. The GAO witness offered several criticisms: the site lacks adequate security, the site can be used for malicious electronic searches, and, there are questions about the relationship between the government and private parties involved. 10/2. The Gartner Group released the summary of a study [PDF] regarding a "digital divide" which found that 50% of U.S. households have Internet access. It also projects that by 2005 75% of U.S. households will be connected. See, release. 10/2. The U.S. Court of Appeals (9th Cir.) heard oral argument in Napster v. A&M Records. See also, statement of RIAA CEO Hillary Rosen. 10/2. Napster CEO Hank Barry released a statement about attempts to settle with record companies. "Napster has made serious proposals to each of the major record companies and their publishing affiliates that involve payments of substantial percentages of expected company revenues to compensate artists and rights holders - proposals whose most conservative estimates would result in payments of over $500 million to the industry in just the first year alone. Every one of these proposals has been rejected, and the record companies have made no counterproposals. Just as we will continue to press our case in court and on Capitol Hill, we will continue to seek an agreement with the recording industry because we believe that our 32,000,000 users deserve nothing less." 10/2. The Supreme Court of the U.S. denied the petition for writ of certiorari in Sony Computer Entertainment v. Connectix. See, S.C.U.S. Docket No. 00-11. San Mateo, CA, based Connectix produces cross platform technologies, including Virtual PC for Microsoft Windows, Virtual PC for Red Hat Linux, and Virtual Game Station. Sony filed a complaint in U.S. District Court in Jan. of 1999 alleging that the Virtual Game Station, which allows users to run PlayStation games on PCs, infringes Sony copyrights. The District Court issued a preliminary injunction of sale of the Virtual Game Station. In Feb. 2000, the U.S. Court of Appeals (9th Cir.), issued it opinion lifting the District Court injunction. [Appeal No. 99-15852.] Other legal claims are also pending in the District Court. Sales of the Virtual Game Station continue. 10/2. Former rivals Microsoft and Corel announced a strategic alliance. Microsoft has purchased 24 million non-voting convertible preferred shares of Corel at a total purchase price of $135 Million. The companies will also work together to support the development, testing and marketing of new products related to Microsoft's .NET platform. Microsoft's and Corel's release also referenced that "both companies have agreed to settle certain legal issues between Corel and Microsoft", but did not specify what the legal issues were, or how they were settled. 10/2. The NIST announced that its new Advanced Encryption Standard will be Rijndael. This is developed by Belgian cryptographers Joan Daemen of Proton World International and Vincent Rijmen of Katholieke Universiteit Leuven. The proposed selection of Rijndael as the AES will be formally announced in the Federal Register in several months, and then NIST will receive public comments for 90 days. Under Sec. for Technology Cheryl Shavers said in a statement that "This is a proposed standard that will be used by federal civilian agencies -- if adopted by the Secretary of Commerce after the public comment process." She added that "those in the private sector may use any encryption technique they choose." See also, statement by NIST Director Ray Kramer. 10/2. The EU and the USTR reached an agreement regarding procedures for reviewing whether the Foreign Sales Corporation (FSC) repeal and replacement legislation, currently pending in Congress, is WTO consistent. See, EU release and USTR release. The FSC scheme allows a portion of a U.S. taxpaying firm's foreign-source income to be exempt from U.S. income tax. It benefits software companies, among others. The EU filed a complaint about the FSC scheme with the WTO, alleging that it is a prohibited export subsidy. A WTO dispute settlement panel sided with the EU last fall, and the WTO Appellate Body upheld its findings in February. The EU also objects to the pending replacement bill, HR 4986, the "FSC Repeal and Extraterritorial Income Exclusion Act of 2000", sponsored by Rep. Bill Archer (R-TX). For background, see May 2, 2000 press briefings by Lamy and Eizenstat and by Eizenstat and Talisman. 10/2. The EPIC announced that the FBI released 565 pages from government files on the Internet monitoring program known as Carnivore, in response to its Freedom of Information Act (FOIA) request, and law suit. EPIC filed a Complaint in U.S. District Court (DC) on July 31 under the FOIA to compel production of Carnivore records. EPIC noted in a release that "Of the material released, nearly 200 pages were withheld in full and another 400 pages were redacted, many completely except for the page numbers. The source code to the Carnivore system was withheld." EPIC Exec. Dir. Marc Rotenberg stated: "We intend to pursue the litigation until the relevant documents are disclosed." For background, see EPIC's Brief in Support of Motion for TRO. 10/2. Commerce Sec. Norman Mineta gave a speech to the NAM's "Get Tech" event regarding high tech workers. He stated that "the Commerce Department has been focusing on ways to help industry meet the demand for technology workers. We have held town meetings, worked with business and community leaders, and tried to determine why more young people aren't training for these good, high paying jobs. One of the most important reasons given was this: students are not getting information about new economy jobs early enough to effectively guide their educational and career decisions." 10/2. Alan Larson, Under Secretary of State for Economic Affairs gave a speech at the "Net Diplomacy 2000 Conference on the Internet & Diplomacy" in Washington DC. He stated: "If you look at the websites of even some of the most major US e-commerce merchants -- GAP.com, JCrew.com, Nike.com, Walmart.com and others -- you will find that they are refusing to ship overseas. Shipping difficulties and the magnitude and unpredictability of taxes and tariffs are constraints on international e-commerce. ... A major international effort must be made to help developing countries assess their readiness for electronic commerce and to provide help to those who wish to improve policies that are deficient." He offered several recommendations, including: "competition in the telecommunications market", "enable goods to move efficiently through customs", adopt "open skies civil aviation agreements", "open postal and delivery service regimes to competition", and "examine the regulatory environment". 10/2. ICANN announed its review procedure for applications for new TLDs. (The application deadline was Oct. 2.) 10/2. Bill Clinton announced his intent to nominate Philip Bredesen to the National Commission on Libraries and Information Science. Bredesen is a former Mayor of Nashville, TN. See, release. 10/1. The Commerce Department's Bureau of Export Administration combined its Exporter Counseling Division and Export Seminar Staff into a new unit called the Outreach and Educational Services Division (OESD). |
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