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Tech Law Journal |
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1/10. Sen. Barbara Boxer (D-CA) announced her opposition to the nomination of former Sen. John Ashcroft to be Attorney General. In a letter to President Elect Bush, she wrote that "the people of this country will not be protected and served as they exercise their civil rights, human rights, consumer rights, their right to choose, their right to be free of gun violence and their right to a clean environment." See also, Boxer release. Ashcroft, who lost his bid for re-election last November, was one of the leading proponents in the Senate of encryption rights, liberalization of encryption export rules, and electronic privacy. See for example, S 2067 (105th Congress), the E-Privacy Act, which Ashcroft introduced on May 12, 1998. Sen. Boxer co-sponsored the bill. 1/10. The Clinton White House press office released a statement that it will revise U.S. export controls on high performance computers, and that it will recommend to the incoming Bush administration that it remove most controls on computer hardware exports. According to the statement, an administration "review found that the ability to control the acquisition of computational capabilities by controlling computer hardware is becoming ineffective and will be increasingly so within a very short time." The announced changes include switching from a 4 tier to a 3 tier system of categorizing countries. Tiers 1 and 2 (most of the Americas, Europe, Japan, S. Korea, and Australia) will be combined. Tier 3 (India, Pakistan, Middle East, former Soviet Union, PRC, and Viet Nam) and Tier 4 (rogue states) will remain the same. The announcement also states that licenses will be required for exports surpassing 85,000 MTOPS to Tier 3 countries. These changes will not take effect until, and unless, the Department of Commerce promulgates implementing regulations. See also, State Dept. release (copy of White House release). 1/10. The USTR published a Notice in the Federal Register regarding software and music piracy in Russia and Brazil. It will conduct a hearing on March 9 on the two countries' eligibility for duty free status under the Generalized System of Preferences (GSP). Pursuant to The Trade Act of 1974, the GSP program grants duty-free treatment to designated eligible articles that are imported from designated beneficiary developing countries, including the Russian Federation and Brazil. The IIPA filed petitions on Aug. 21, 2000, that the duty free status of these, and other, countries be withdrawn. See, for example, petition re Russia [PDF] and petition re Brazil [PDF]. The IIPA stated in a release that "Pirate CDs and CD-ROMs containing recordings, music, entertainment software, business software and literary publications are being copied locally or imported and distributed with virtual impunity." The deadline for submitting comments is Feb. 23, 2001. The USTR declined to review the piracy practices of other nations, including Uruguay. The RIAA also applauded the USTR's move in a release. See, Federal Register, Jan. 10, 2001, Vol. 66, No. 7, at Pages 2034 - 2035. 1/10. Intel and ATI settled their pending patent infringement litigation. The companies also entered into a cross-license agreement which grants each company rights to certain patents owned by the other. ATI makes graphics, video and multimedia products for PCs, Macs, set-top boxes, e-appliances and game consoles. See, Intel release and substantially identical ATI release. 1/10. The U.S. Attorney (NDCal) unsealed an indictment [PDF] of Jerome Heckenkamp, which was returned by a federal grand jury on Dec. 13, 2000. The indictment charges the defendant, who is an employee of the Los Alamos National Laboratory, with accessing and damaging computers, intercepting electronic communications, and witness tampering. The indictment was sealed pending his arrest, which was effected on Jan. 10. The defendant is charged with seven counts of unauthorized access into a computer recklessly causing damage in violation of 18 U.S.C. § 1030(a)(5)(B), eight counts of interception of electronic communications in violation of 18 U.S.C. § 2511(1)(a), and one count of tampering with a witness in violation of 18 U.S.C. § 1512(b)(1) and (b)(2)(A). The companies whose computer networks were affected were eBay, Lycos, Juniper, and Exodus Communications, e-Trade, Cygnus Support Solutions. Defendant Heckenkamp has also been charged in a separate indictment returned by a federal grand jury in San Diego. See also, USA release. Ross Nadel, Chief of the Computer Hacking and Intellectual Property Unit in the U.S. Attorney's Office, is prosecuting this case. 1/10. The Federal Communications Bar Association's Legislation Committee hosted a luncheon at which staff assistants of members of the Senate Commerce Committee addressed the legislative agenda for the 107th Congress. 1/10. The USITC instituted a Section 337 investigation of the importation into the U.S. of certain semiconductor light emitting devices. On Dec. 15, 2000, Rohm filed a complaint with the USITC alleging that Nichia Corp., Japan and Nichia America Corp. have imported devices which infringe its U.S. Patents 6,084,899 and 6,115,399. The complaint was filed by Robert Gaybrick of the law office of Morgan, Lewis & Bockius. See, Inv. No. 337-TA-444. 1/10. The FTC announced that it will host (with the Electronic Retailing Association) a one day seminar for Internet retailers, marketers and suppliers on applying offline rules and regulations online. The seminar will be held on Tuesday, Jan. 30, 2001, at the Ritz-Carlton, Tysons Corner, Virginia. To register, contact the ERA at 800-987-6462 or 703-841-1751. See also, ERA registration page. 1/10. The USPTO released its list of the top ten patenting organizations of 2000. IBM tops the list with 2,886 patents. The entire list is as follows: IBM, NEC, Canon Kabushiki Kaisha, Samsung Electronics, Lucent Technologies, Sony, Micron Technology, Toshiba, Motorola, and Fujitsu. See also, IBM release. 1/10. The USPTO published a three page summary [PDF] of items to be tested on the registration examination scheduled for April 18, 2001. 1/10. The U.S. Court of Appeals (FedCir) heard oral argument in Intellectual Property Development v. TCI Cablevision of California. This is an appeal from a final judgment of the U.S. District Court (CDCal) in a patent infringement case. The patent in suit relates to hybrid coax fiber architecture. The trial court dismissed on the grounds that the appellant lacked standing to sue. Both sides appealed. (The basis upon which the suit is dismissed bears upon the application of six years damages window provided by 35 U.S.C. 286). 1/10. Xinhua, the state news service of the PRC, announced that "Beijing will set up its 'E-Government' by the end of the year 2005". See, release. Xinhua also announced that people will "soon" be able to access their kitchen ovens over the Internet. See, release. 1/9. The U.S. Court of Appeals (DCCir) issued its opinion in ASCENT v. FCC vacating the FCC's order in its SBC Ameritech merger proceeding permitting SBC to offer advanced services, such as DSL, through a separate affiliate. Judge Silberman, writing for a unanimous three judge panel, wrote: "... Congress did not treat advanced services differently from other telecommunications services. ... It did not limit the regulation of telecommunications services to those services that rely on the local loop. For that reason the Commission may not permit an ILEC to avoid § 251(c) obligations as applied to advanced services by setting up a wholly owned affiliate to offer those services. Whether one concludes that the Commission has actually forborne or whether its interpretation of "successor or assign" is unreasonable, the conclusion is the same: The Commission's interpretation of the Act's structure is unreasonable. The order of the Federal Communications Commission is vacated." The ASCENT, a national trade association representing telecommunications providers and resellers, opposed the merger application, and filed a petition for review of the FCC order approving the merger of Ameritech and SBC. The order allowed the merged company to avoid statutory resale obligations on certain advanced telecommunications services by providing those services through a subsidiary. The FCC determined that advanced services are telecommunications services like any others and may not be provided by an ILEC unless the ILEC complies with § 251(c). However, FCC relied on the "successor or assign" language of the statute to create an exception for separate affiliates. 1/9. Rep. Frank Wolf (R-VA) will be Chairman of the House Appropriations Committee's Subcommittee on Commerce, Justice, State, and the Judiciary (CJS). This Subcommittee has within its jurisdiction most of the executive branch agencies involved in technology related matters, including the FCC, FTC, Securities and Exchange Commission (SEC), Department of Justice (DOJ), and Department of Commerce (DOC). The FCC is evolving from a New Deal era telecom regulator into a broad communications and Internet regulatory agency. The FTC has antitrust authority, and is increasingly becoming involved in online consumer fraud and online privacy issues. The SEC facilitates online stock trading, and polices Internet securities fraud. The DOJ's Antitrust Division brought the Microsoft antitrust case, and handles other antitrust matters. The DOJ also is the location of the NIPC, which alerts of, and responds to, viruses and other threats. The DOJ also has the CCIPS, which on rare occasions prosecutes computer related crimes and intellectual property crimes. The DOC is home to the NTIA, which has spectrum management authority (including a lead role in identifying and allocating spectrum for 3G wireless services), and which awards grants to facilitate broadband Internet access deployment in underserved areas. The DOC is also home to the USPTO, which is funded solely by user fees. For years the Appropriations Committees, and the Congress, have been diverting some of these fees to subsidize other government programs, over the stringent opposition of the intellectual property communities. In June of 2000 Rep. Wolf voted in favor of Rep. Coble's amendment to reduce the amount of the diversion. Rep. Wolf represents a district in northern Virginia that is home to many high tech workers and tech companies, and can be expected to be more supportive of a high tech agenda than his predecessor. 1/9. Rep. Billy Tauzin (R-LA), the newly selected Chairman of the House Commerce Committee named Ken Johnson to be the Communications Director and Spokesman for the Committee. Johnson has been the press assistant in Rep. Tauzin's office for eight years. Prior to that he worked as a journalist, including as a news director, news anchor and political reporter for TV stations. 1/9. Verizon filed an application with the Pennsylvania Public Utilities Commission in which it stated that it plans to file a Section 271 application with the FCC to offer long distance service in the state. See, release. 1/9. Novell announced that the U.S. District Court (EDCal) awarded it over $600,000 in a case against Chris Bonner for copyright infringement. Bonner used alias accounts on eBay's auction site to sell unlicensed copies of Novell's Net services software. See, release. 1/9. The Copyright Office (CO) published in the Federal Register an announcement of the six month negotiation period for the adjustment of royalty rates and terms for the public performance of copyrighted sound recordings by preexisting subscription services and preexisting satellite digital audio radio services. The announcement also requests parties participating in the negotiations to notify the CO. See, Federal Register, Jan. 9, 2001, Vol. 66, No. 6, pages 1700 - 1701. 1/9. The U.S. Court of Appeals (FedCir) heard oral argument in Sunrise Telecom v. Electrodata, Appeal No. 00-1017. This is an appeal from a final judgment of the U.S. District Court (NDCal) in a patent infringement case. The trial court found infringement of a patent concerning hand held telecom line testers. 1/9. The Software and Information Industry Association (SIIA) urged the Senate to confirm Rod Paige as Secretary of Education. SIIA President Ken Wasch also advocated dedicating "resources to train a new generation of high-tech workers, including through public-private partnerships that provide opportunities and relevant curriculum" See, release. Paige has been the Superintendent of the Houston Independent School District (HISD) since 1994. He was elected to the HISD Board of Education in 1989 and served as its President in 1992. Previously, he was Dean of the College of Education at Texas Southern University. 1/9. Open Market filed a complaint in U.S. District Court (DDel) against Intershop alleging patent infringement. Plaintiff alleges infringement of three patents, U.S. Patent No. 5,708,780 entitled "Internet Server Access Control and Monitoring System," U.S. Patent No. 5,715,314, titled "Network Sales System," and U.S. Patent No. 5,909,492, also titled "Network Sales System." Open Market provides e-business application software and software services for managing and delivering online content, engaging in personalized online marketing and merchandizing campaigns, and conducting commerce via a secure transaction processing and order management system. 1/9. DeAnne Ozaki joined the Los Angeles office of the law firm of Latham & Watkins. She will be Of Counsel in the Venture & Technology Practice Group. She practices copyright, trademark, licensing and Internet law. She was previously a partner in the Los Angeles office of Katten Muchin Zavis. See, release. 1/8. Veronica Lewis joined the Dallas office of law firm of Vinson & Elkins as a partner. See, release. She represented Time Inc., and Warner Communications Inc., and AT&T. She was previously a partner at Thompson & Knight. She has also worked at Lowenstein Sandler in New Jersey, and in the New York office of Cravath Swaine. See, release. 1/8. The Townsend Townsend & Crew, a San Francisco based law firm specializing in intellectual property, antitrust and Internet law, announced the hiring of three associates: Rick Chang, Jeffrey Lefstin and Brian Young. See, release. 1/8. Axcelis filed a complaint [PDF] in U.S. District Court (DMass) against Applied Materials alleging patent infringement regarding an invention for making semiconductor devices. Both Axcelis and Applied make ion implantation equipment. Axcelis owns U.S. Patent No. 4,667,111, titled "Accelerator for Ion Implantation", which claims an invention for high energy ion implantation devices using rf LINAC technology. Axcelsis alleges that Applied's recently launched ion implanter called "SWIFT" infringes this patent. Count 1 alleges infringement of the patent in suit. Count 2 alleges tortious interference with contract. Axcelsis alleges that the inventor, Hilton Glavish, signed a contract to "do everything legally possible to aid" Axcelsis and to "obtain and enforce patent protection in all countries", and that Applied caused Glavish to breach this contract, by having him assist in the development of the infringing machine. Count 3 alleges tortious interference with prospective advantageous business relationships. Count 4 alleges unfair competition and unfair trade practices. Axcelsis seeks a declaration that Applied has infringed its patent, a preliminary and permanent injunction against infringement, an injunction against interfering with contractual business relationships and unfair competition, and money damages. Axcelsis is represented by Thomas Holt of the Boston office of the law firm of Kirkpatrick & Lockhart. See also, Axcelis release. 1/8. Jackson Day, Deputy Chief Accountant of the SEC gave a speech titled "Current Activities of the Office of the Chief Accountant" in which he discussed revenue recognition and other hot issues at the SEC. 1/8. The USPTO's Office of Enrollment and Discipline extended from Jan. 5, 2001, to Friday, Jan. 12, 2001, the deadline for filing complete applications for admission to the registration examination being given on April 18, 2001. See, notice [PDF]. 1/8. The House Republican Conference released a list of committee assignments [PDF] for Republican members for the 107th Congress. Several new members have been appointed to the Commerce Committee and the Judiciary Committee, which have jurisdiction over most of the technology related legislation in the House. The new members of the Commerce Committee are Tom Davis (VA), Steve Buyer (IN), George Radanovich (CA), Joseph Pitts (PA), Mary Bono (CA), Greg Walden (OR), and Lee Terry (NE). The new members of the Judiciary Committee are John Hostettler (IN), Mark Green (WI), Ric Keller (FL), Darrell Issa (CA), Melissa Hart (PA), and Jeff Flake (AZ). Subcommittee assignments have not yet been made; nor have subcommittee chairman been selected. However, Howard Coble (NC) will continue as Chairman of the Courts and Intellectual Property Subcommittee. This CIP Subcommittee will receive many new members, since Mary Bono departed to take a seat on the Commerce Committee, James Rogan (CA) lost his re-election bid, and Ted Pease (IN) retired. 1/8. The U.S. Court of Appeals (9thCir) released its opinion in Konop v. Hawaiian Airlines, a case holding that viewing a secure web site under false pretenses may constitute a violation of the Wiretap Act and the Stored Communications Act. Konop, a pilot for Hawaiian Airlines (HA), maintained a web site that contained statements that were critical of both his employer and the pilots' union. The web site was password protected, and required registration and consent not to disclose the contents of the web site. An HA VP named Davis accessed the web site on numerous occasions under false pretenses: logging in as pilots who had registered. Konop argued that HA intercepted an electronic communication in violation of the Wiretap Act, as amended by the Electronic Communications Privacy Act, and accessed an electronic communications facility in violation of the Stored Communications Act. The trial court dismissed Konop's claims on summary judgment. The Appeals Court reversed on the grounds that there were triable issues of fact. The Appeals Court held that "The contents of secure websites are 'electronic communications' in intermediate storage that are protected from unauthorized interception under the Wiretap Act. Konop has raised material issues of fact whether Davis had appropriate consent to view Konop's website." It further held that "the Wiretap Act protects electronic communications from interception when stored to the same extent as when in transit." [Appeal No. 99-55106. Appeal from U.S.D.C. No. CV-96-04898-SJL(JGx). Opinion by Boochever. Reinhardt and Paez participated.] 1/8. The Supreme Court of the U.S. denied certiorari in Urofsky v. Gilmore, No. 00-466. See, Jan. 8 Order List at page 7. Six professors employed by public colleges and universities in Virginia filed suit in U.S. District Court (EDVA) challenging the constitutionality of Virginia Code § 2.1-804 to -806, which restricted state employees from accessing sexually explicit material on computers that are owned or leased by the state. District Court Judge Leonnie Brinkema found the statute unconstitutional, and ordered a large award of attorneys fees. The U.S. Court of Appeals (4thCir) issued its opinion reversing the trial court, and upholding the statute, on Feb. 10, 1999. This case is the only significant loss of the ACLU and other groups which have otherwise successfully challenged the constitutionality of several restrictions on Internet use on First Amendment grounds. See also, TLJ story of Feb. 12, 1999. 1/8. The FCC released a summary of its 7th annual report to the Congress on competition in markets for the delivery of video programming, and the convergence of video programming and Internet access. The FCC found that cable TV "still is the dominant technology for the delivery of video programming to consumers, although its market share continues to decline. As of June 2000, 80 percent of all subscribers to multichannel video program distributor (MVPD) services received their programming from a franchised cable operator, compared to 82 percent a year earlier." The report also finds that Direct Broadcast Satellite (DBS) subscribers now represent 15.4 percent of all MVPD subscribers. The report also addressed the convergence of MVPD and Internet access. "Cable operators continue to expand the broadband infrastructure that permits them to offer high-speed Internet access. ... Like cable, the DBS industry is developing ways to bring advanced services to their customers. For example, DirecTV currently offers a satellite-delivered high-speed Internet access service with a telephone return path called DirecPC. ... In addition, digital technology makes it possible for MMDS operators, who provide video service in only limited areas, to offer two-way services, such as high-speed Internet service and telephony." Sprint and MCI WorldCom are developing these services. See, FCC release and summary. 1/8. Roy Neel, President and CEO of the U.S. States Telecom Association (USTA) announced that he will leave this position effective March 31, 2001. No replacement has been named. Gary Lytle is the interim President and CEO. Neel was previously Bill Clinton's Deputy Chief of Staff and VP Al Gore's Gore's Chief of Staff. He also previously was a Senate aide to Al Gore. 1/8. Rep. Billy Tauzin (R-LA), the new Chairman of the House Commerce Committee, named David Marventano as Staff Director for the Committee. Marventano previously ran Rep. Tauzin's personnel office. Before that he was VP and Senior Director of Government Affairs for the Securities Industry Association (SIA). He was also Chief of Staff and Legislative Director to former Rep. Bill Paxon (R-NY). 1/8. The USITC announced that it is looking for an attorney advisor to work on § 337 matters. The notice states that "The primary duties of this position are to provide legal support to the Commission in investigations concerning patents (especially patents involving electrical technology), copyrights, trademarks, and other intellectual property rights under section 337 of the Tariff Act of 1930 (19 U.S.C. sec. 1337) and to defend the Commission’s decisions in such investigations before the U.S. Court of Appeals for the Federal Circuit." See, notice [PDF]. 1/6. The House and Senate convened in Joint Session to count the votes cast for President and Vice President of the United States by the Electoral College. The session certified George Bush's and Dick Cheney's elections. 1/5. The U.S. District Court (CDCal) issued a Temporary Restraining Order (TRO) against Juno in NetZero v. Juno, a patent infringement case. NetZero filed its Complaint on Dec. 26, 2000 alleging that Juno's floating advertising window called the Juno Guide infringed U.S. Patent No. 6,157,946. The Court court concluded that NetZero had demonstrated a likelihood of success on the merits. The TRO takes effect on Friday, Jan. 12, and remains in effect for 65 days. A preliminary injunction hearing is set for March 15. Trial is set for July. NetZero, an ISP and web marketer, is represented by William Robinson, of the law firm of Mayer Brown & Platt. [Case No. 00-13378 SVW (RNBx).] Mark Goldston, NetZero Chairman and CEO stated in a release that "We believe our patent is a powerful proprietary right which will provide us with a competitive advantage in our market. We believe the court’s order is further validation of our position. Other ISPs should take note of the court’s ruling and carefully consider their use of similar ad banner windows. 1/5. Senate Republicans and Democrats, who are divided 50 to 50 in the 107th Congress, reached a power sharing agreement. The Senate agreed to rules changes by a voice vote which provide that: • The parties will hold equal representation on committees. • Republicans will chair committees. • Legislation receiving a tie vote in committees will proceed to the full Senate. • Republicans and Democrats will receive equal committee staffing. 1/5. Two Republicans were appointed to the House Ways and Means Committee: Rep. Kevin Brady (R-TX) and Rep. Paul Ryan (R-WI). Neither was appointed to the Trade Subcommittee. See also, gop.gov release. Ryan was first elected in 1998 to represent the southwest corner of Wisconsin. His wife is a tax attorney with Price Waterhouse Coopers. Rep. Brady is in his third term representing a largely rural and small town East Texas district that includes Texas A&M University and the HQ of Compaq. 1/5. The FCC released a Notice of Proposed Rulemaking [62 pages in PDF] regarding spectrum allocation for 3G wireless. The FCC seeks comments on the possibility of introducing new advanced mobile and fixed services in frequency bands currently used for cellular, broadband PCS, and SMR services, as well as in five other frequency bands: 1710-1755 MHz, 1755-1850 MHz, 2110-2150 MHz, 2160-2165 MHz and 2500-2690 MHz. Third Generation (3G) wireless technology is intended to bring broadband Internet access to portable devices. See, TLJ story. See also, FCC release. 1/5. The FCC's NPRM on 3G wireless also contained an Order denying a petition filed by the Satellite Industry Association (SIA) requesting that the 2500-2520 MHz and 2670-2690 MHz bands be reallocated to the Mobile-Satellite Service (MSS). 1/5. Hewlett Packard (HP) announced that it has filed a § 337 complaint with the USITC against Microjet, Printer Essentials, and Priceless Inkjet Cartridge. HP alleges that respondents are importing into and selling in the U.S. inkjet cartridge products in violation of six of HP's patents. See, HP release. 1/5. The USPTO published in the Federal Register a revised version of guidelines to be used by USPTO personnel in their review of patent applications for compliance with the "utility" requirement of 35 U.S.C. § 101. This item also includes a detailed review of public comments received by the USPTO on this matter. See, Federal Register, Jan. 5, 2001, Vol. 66, No. 4, at Pages 1092 - 1099. See also, USPTO release. For more information, contact Mark Nagumo at 703-305-8666 or Linda Therkorn at 703-305-8825. 1/5. The USPTO published in the Federal Register guidelines that will be used by USPTO personnel in their review of patent applications for compliance with the "written description" requirement of 35 U.S.C. § 112, ¶ 1. See, Federal Register, Jan. 5, 2001, Vol. 66, No. 4, at Pages 1099 - 1111. For more information, contact Stephen Walsh at 703-305-9035 or Linda Therkorn at 703-305-8800. 1/5. The FTC released a report [394 KB in PDF] titled "Project Mailbox IV: Report on Law Enforcement Actions and Consumer Education Initiatives; October 1, 1999 - September 30, 2000." The report lists and describes actions brought by the FTC, U.S. Postal Inspection Service, SEC, and state governments associated with illegal use of U.S. mail, facsimiles, and e-mail. See, FTC release. 1/5. Outgoing USTR Charlene Barshefsky announced that upon leaving office later this month she will become a Public Policy Scholar at the Woodrow Wilson International Center for Scholars in Washington DC. See, USTR release. 1/5. Cal. Gov. Gray Davis announced the appointment of Contra Costa County Superior Court Judge Mark Simons as an Associate Justice of the Court of Appeal, First Appellate District, Division Five. He will fill the vacancy created by the retirement of Judge Zerne Hanning. See, Davis release. 1/5. The U.S. Court of Appeals (FedCir) issued its Opinion in Union Pacific v. Chesapeak Energy. This opinion addresses the legal issues of patent claim construction, invalidity for nonenablement, and invalidity for indefiniteness, in dispute over oil and gas drilling technology. Union Pacific Resources Company filed suit against Chesapeake in the U.S. District Court (NDTex) alleging infringement of U.S. Patent No. 5,311,951, which discloses a method for locating a drill bit in a horizontal borehole relative to the surrounding subsurface strata. The District Court ruled that the patent in suit is invalid for nonenablement and indefiniteness; it also found non-infringement. The Court of Appeals affirmed. 1/5. The U.S. Department of Justice released a manual titled Prosecuting Intellectual Property Crime. IP industry representatives have criticized the Clinton Justice Dept. for lax prosecution of IP crimes. The manual is lengthy, and thoroughly references relevant statutory sections and cases. The manual also states that "Enforcement of intellectual property laws in America can sometimes be at tension with the constraints of the First Amendment. This strain has long been recognized both in copyright and trademark law. ... New technologies such as the Internet provide fertile ground for revisiting these conflicts." However, it cites only law review commentary, and no case law, in support of these statements. See, DOJ release. 1/4. The SEC instituted and settled an administrative proceeding against Transcrypt International, a Delaware corporation based in Nebraska that makes information security products which prevent unauthorized access to sensitive voice communications, i.e., scramblers and encryptors. The SEC found improper recognition of revenue in 1996 and 1997 in violation of § 17(a) of the Securities Act and §§ 10(b), 13(a) and 13(b)(2) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-11, 13a-13,and 13b2-1 thereunder. No fine was imposed. See, SEC Order Instituting Public Proceedings, Making Findings, and Imposing Cease and Desist Order and Transcrypt release. 1/4. The SEC instituted and concluded two separate but similar administrative proceedings against two individuals named Stephen Marek and Dominic Roelandt. Marek controlled two free Internet newsletters, BigProfitNews and Bulls-Eye Stocks. Roelandt controlled a free Internet newsletter called Coldstocks. Both falsely touted microcap stocks, and misrepresented their trading intentions, their track record, and their touting compensation. The Orders bar Marek and Roelandt from participating in any offering of a penny stock. See, SEC Marek Order and SEC Roelandt Order. 1/4. Michael Vatis, Director of FBI's National Infrastructure Proctection Center, announced his departure. The NIPC is an interagency unit located at the FBI that was created by Bill Clinton's Presidential Decision Directive 63 in 1998. The NIPC attempts to warn of, and respond to, cyber attacks. See also, Vatis' July 26, 2000, testimony to the House Government Management, Information, and Technology Subcommittee, and his Feb. 29, 2000, testimony before a joint hearing of the House Crime Subcommittee, and the Senate Criminal Justice Oversight Subcommittee. 1/4. "The ITAA announced its support for legislation pertaining to modernization of election procedures. HR 5674 IH and S 1 IS, titled the Election Reform Act, were both introduced in the 106th Congress on Dec. 15, 2000. They would establish another federal election commission that would have authority to conduct studies and set voluntary standards for federal, state and local election procedures and administration. It would also hand out grants "to improve and modernize the administration of elections". "Today's information technology can enable the U.S. accurately and efficiently to count and record votes," said ITAA President Harris Miller in a release. The original sponsors of HR 5674 are Rep. Tom Davis (R-VA), Rep. Steve Rothman (D-NJ), Rep. Pat Kennedy (D-RI), and Rep. Heather Wilson (R-NM). The original sponsors of S 1 include Sen. Mitch McConnell (R-KY) and Sen. Robert Torricelli (D-NJ). 1/4. An individual named Peter Kanevsky filed a complaint [PDF] in U.S. District Court (NDCal) against M&A West, Inc. and two of its officers and directors alleging violation of federal securities laws. The plaintiff, who is represented by the law firms of Milberg Weiss and Kaplan Kilsheimer & Fox, seeks class action status. Count one alleges violation of § 10b of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. Count two alleges violation of § 20 of the 1934 Act. M&A West is a small company traded on the OTC BB as MAWI that develops, invests in and operates Internet and technology related companies. Milberg Weiss is a law firm that specializes in bring securities class action suits against technology companies. 1/5. John Fiorini, will join the Washington DC office of the law firm of Wiley Rein & Fielding as a partner specializing in mass media and telecom law. He was a partner in the Washington DC office of Gardner Carton & Douglas. See, WRF release. Fiorini has argued against low power FM radio licensing. 1/2. Eight Limbach & Limbach attorneys joined Gray Cary. The Limbach firm, which specialized in patent prosecutions and litigation, ceased operations at the end of last year. All eight will work out of Gray Cary's Palo Alto or San Francisco offices. Karl and George Limbach, co-founders of the Limbach firm, will join as Of Counsel. Ronald Yin will join as a partner focusing on business counseling, procurement, licensing and enforcement, including USITC proceedings, of patents relating to advanced technology, including semiconductor processes and circuit design, microprocessors, digital circuits, computer systems, memories, communication and software. Gerald Sekimura will join as a partner focusing on complex patent litigation, USITC proceedings, patent interferences, and the prosecution of patents in the areas of analog and digital electronics, semiconductors, memories, graphics, electronic and optical computer systems, and biomedical instrumentation. Edward Weller will join as special counsel focusing on strategic counseling on patent protection and enforcement and patent portfolio management and procurement of patents in business methods, software, and electronics including semiconductors, digital circuits, computer systems and optical systems. Alan Limbach, Eric Hoover, and Kyla Harriel will join as associates. See, Gray Cary release. 1/4. The House Republican Conference selected new committee chairman. Rep. Billy Tauzin (R-LA) will be Chairman of the powerful House Commerce Committee. This Committee, and its Telecom Subcommittee, have jurisdiction over much of the technology related legislation. The former Chairman, Rep. Tom Bliley (R-VA), retired. This opened a contest between Rep. Tauzin and Rep. Mike Oxley (R-OH) for the Chairmanship. However, the Republican Conference reshuffled committee jurisdictions, and gave both chairmanships. Rep. Oxley will become Chairman of a newly reorganized Banking Committee, now renamed Financial Services Committee. The Committee will also pick up jurisdiction over insurance and securities that had been held by the House Commerce Committee. Rep. Oxley had been Chairman of the Finance Subcommittee of the House Commerce Committee. 1/4. Rep. James Sensenbrenner (R-WI) will become Chairman of the House Judiciary Committee. This committee has jurisdicition over many tech related issues, including intellectual property, crime, and some tax issues. The former Chairman, Rep. Henry Hyde (R-IL), was required to step down by House Republican rules which limit Chairmen to three terms. However, the rules did not prevent Rep. Hyde from being elected Chairman of the House International Relations Committee. The Courts and Intellectual Property Subcommittee will obtain new members. Rep. James Rogan (R-CA) lost his bid for re-election. Rep. Ed Pease (R-IN) retired. 1/4. Rep. Bill Thomas (R-CA) will become Chairman of the Ways and Means Committee. He replaces Rep. Bill Archer (R-TX), who retired. Rep. Phil Crane (R-IL), who is Chairman of the Trade Subcommittee, had also sought the spot. This tax writing committee has jurisdiction over many tech related issues, including FSC tax treatment, PNTR status for China, R&D tax credits, and depreciation of computer equipment. 1/4. Rep. John Boehner (R-OH) will become Chairman of the Education and Workforce Committee. He replaces Rep. Bill Goodling (R-PA), who retired. 1/4. The complete list of committee chairmen for the 107th Congress is as follows: Agriculture -- Larry Combest (R-TX) Appropriations -- Bill Young (R-FL) Armed Services -- Bob Stump (R-AZ) Banking (Fin. Services) -- Mike Oxley (R-OH) Budget -- Jim Nussle (R-IA) Commerce -- Billy Tauzin (R-LA) Education & Workforce -- John Boehner (R-OH) Gov. Reform -- Dan Burton (R-IN) International Relations -- Henry Hyde (R-IL) Judiciary -- James Sennsenbrenner (R-WI) Resources -- James Hansen (R-UT) Science -- Sherwood Boehlert (R-NY) Select Intelligence -- Porter Goss (R-FL) Small Business -- Don Manzullo (R-IL) Standards on Official Conduct -- Joel Hefley (R-CO) Transportation -- Don Young (R-AK) Veterans Affairs -- Chris Smith (R-NJ) Ways and Means -- Bill Thomas (R-CA) See, gop.gov release. 1/4. The Senate Commerce Committee held a hearing on the nomination of Donald Evans to be Secretary of Commerce. The nomination is sailing for quick and easy confirmation. Committee members praised Evans, and took the opportunity to press Evans about issues handled by the Dept. of Commerce. Senators spoke about 3G wireless, a digital divide, promoting broadband deployment, TOP grants, online privacy, and other tech issues. The non tech issues addressed by Senators included protecting the U.S. steel industry, the census, NOAA, and global warming. Sen. Ernest Hollings (D-SC) presided. Evans is a former energy company CEO and former President of the Board of Regents of the University of Texas. "My mission for the Department of Commerce will be to foster a marketplace where ideas and energy can thrive, where the entrepreneurial spirit will flourish." Evans continued that "whether in seeking agreement on rules for e-commerce or the elimination of trade distorting subsidies, we want to foster a world of private, not government competition." 1/4. Lisa Dean, Director of the Free Congress Foundation's Center for Technology Policy, endorsed the nomination of former Senator John Ashcroft as Attorney General. She cited his sponsorship of legislation to protect encryption rights and electronic privacy. Said Dean, "Privacy was always a top concern and as a result, he did a lot of good for the country and the protection of our liberties as senator." See also, S 2067 (105th Congress). 1/4. The FCC issued a release which asserts that the FCC has "adopted" an NPRM regarding spectrum for 3G wireless services. Also, the NTIA issued a release which states that the FCC has released this NPRM. However, the NPRM has not been published in the FCC web site. And, an FCC Wireless Telecommunications Bureau employee told TLJ late Thursday that the NPRM has not yet been released, but that it may be released on Friday. NTIA chief Greg Rohde stated that "the United States has to move aggressively to develop 3rd generation wireless if we want to be a first- class nation with respect to telecommunications and electronic commerce. I deeply hope that we will be able to meet our goal of issuing a final order by July 2001. The stakes are nothing less than our international competitiveness in electronic commerce and being a world leader in communications services." 1/4. Sec. of Commerce Norman Mineta held a press conference on the EU safe harbor privacy framework. He announced a series of nationwide seminars. See, ITA release. See also, SIIA release. 1/4/. TechNet named former Rep. Rick White as CEO. He replaces Jeff Modisett and Lezlee Westine. White represented a Seattle area district in the U.S. of Representatives from 1994 through 1998, when he was defeated by current Rep. Jay Inslee (D-WA). White practiced law at the law firm of Perkins Coie prior to, and after, his election to Congress. While in Congress he sat on the House Commerce Committee and its Telecom Subcommittee. He also founded the Internet Caucus. See, Perkins Coie bio and TLJ bio. See also, White's ranking in the TLJ Congressional Scorecard 1998. 1/4. Cisco announced that President Elect George Bush put three Cisco employees on transition committees. CEO John Chambers will be on the education committee; Director of Government Affairs Laura Ipsen will be on the e-commerce committee; and Government Relations Manager Bruce Mehlman will be on the telecom committee. See, Cisco release. 1/4. House Republicans may create a new Financial Services Committee. The move would affect technology related legislation. The reasons for creating a new committee are partly practical and partly political. The new committee would combine the existing House Banking Committee with the Finance Subcommittee of the House Commerce Committee, which has jurisdiction over securities. The new committee would have authority over all of the converging financial industries of banking, securities and insurance. The political reason for the move is that there are contests for the Chairmanships of both the Banking and Commerce Committees. No strong candidate has emerged for the Banking position, while there are two strong and popular candidates for the Commerce position -- Rep. Mike Oxley (R-OH), who now chairs the Finance Subcommittee, and Rep. Billy Tauzin (R-LA), who now chairs the Telecom Subcommittee. This reshuffling would give both men chairmanships. If created, the new Financial Services Committee would likely emerge with authority over financial privacy issues, securities litigation reform, and bringing the New Deal era prospectus based securities laws into the age of the Internet. The Commerce Committee would retain authority over telecommunications, electronic commerce, and most Internet related issues, as well as oversight of the FCC and FTC. Oxley, who would chair the new committee, is an ex FBI agent who has been one of the leading opponents of liberalization of encryption laws, and one of the leading proponents of bills to ban online indecency. Putting him in charge of the new committee would distance him from these two issues. 1/3. The Free Republic filed a complaint in the Circuit Court of Fairfax County Virginia against Thomas Chappell Aldridge alleging violation of the Virginia Computer Crimes Act in connection with hostile postings to a discussion group web site. The Free Republic is a not for profit California corporation which operates a discussion web site for political conservatives and libertarians. It recently lost a copyright infringement lawsuit brought in U.S. District Court (CDCal) titled LA Times v. Free Republic for publishing complete verbatim copies of thousands of news stories from the LA Times and Washington Post. Aldridge, an attorney in Northern Virginia, is a cantakerous writer and flamer who has earned the enmity of Free Republic members for his unorthodox commentary, his ability to assume a multitude of pseudonymous identities, and his skill at evading technological efforts to prevent him from posting. He also supplied an affidavit in the copyright infringement action that the Court relied upon in finding infringement. The complaint against Aldridge pleads six causes of action. Counts 1-4 are based upon the recently enacted Virginia Computer Crimes Act. Count 1 alleges computer trespass. Count 2 alleges theft of computer services. Count 3 alleges harassment by computer. Count 4 alleges injury from unsolicited bulk electronic mail. Count 5 alleges civil conspiracy under Virginia law. Count 6 alleges break of contract (i.e., the web site user agreement). Plaintiff seeks monetary damages and an injunction against posting unauthorized messages on its web site. 1/3. The House of Representatives of the 107th Congress convened. Members took the oath of office. Rep. Denny Hastert (R-IL) was elected Speaker. The House Republican Conference selected Rep. Dick Armey (R-TX) to be Majority Leader and Rep. Tom DeLay (R-TX) to be Majority Whip. The House Democratic Caucus selected Rep. Dick Gephardt (D-MO) to be Minority Leader and Rep. David Bonior (D-MI) to be Minority Whip. These developments were expected. 1/3. Outgoing Vice President Al Gore swore in newly elected members of the Senate. The Senate is now divided 50 50 between Republicans and Democrats. Until Jan. 20, when Dick Cheney is sworn in as Vice President, Al Gore casts tie breaking votes in the Senate. Hence, Democrats are in control of the Senate. At the Jan. 4 confirmation hearing of Donald Evans (to be Secretary of Commerce) Sen. Ernest Hollings (D-SC) will preside. 1/3. The Information Technology Association of America (ITAA) sent a letter to Sen. Orrin Hatch (R-UT) and Sen. Patrick Leahy (D-VT), the Chairman and Ranking Member of the Senate Judiciary Committee, urging confirmation of John Ashcroft to be Attorney General. The letter cited Ashcroft's bi-partisan leadership on technology issues such as encryption, intellectual property rights and domain names while serving in the Senate. Quote: "Ashcroft’s nomination is a win-win because he has impeccable legal credentials and a strong grasp of high tech policy. We urge swift confirmation ..." Ashcroft lost his bid for re-election last November. The Committee has not yet scheduled its confirmation hearing. Ashcroft faces opposition on non technology related grounds. For example, People for the American Way released a statement condemning his position on abortion. Other groups raise his record on "civil rights". See also, Sen. Hatch's statement of Dec. 22 regarding Ashcroft. Quote: "President-elect Bush has made an excellent choice in John Ashcroft ..." 1/3. Cal. Gov. Gray Davis named John Stevens to the California Public Utilities Commission on an interim basis. See, Davis release. 1/3. Outgoing President Bill Clinton made another recess appointment. He appointed Dennis Devaney as a Commissioner of the United States International Trade Commission (ITC). The ITC is a quasi-judicial independent federal agency. It administers U.S. trade law remedies, including Section 337 (Investigations of Infringements of Patents, Trademarks, Copyrights, or Mask Works, and Other Unfair Practices in Import Trade). See, summary of USITC statutes relating to import relief [21 pages in PDF]. See also, Clinton release. 1/3. A complaint was filed in U.S. District Court (DDC) against Microsoft alleging racial discrimination in compensation and promotion practices. Plaintiff, who is represented by Willie Gary, seeks class action status. Deborah Willingham, MSFT VP for Human Resources, had this to say in a release: "Microsoft has a zero tolerance policy toward discrimination in the workplace. We take any allegations of discrimination very seriously, and immediately investigate any concern that is raised." 1/3. The SEC filed a complaint in U.S. District Court (DDC) against a Colleen Millsap alleging insider trading. Millsap, a former CFO of digitalNATION, a dedicated server web hosting company, engaged in illegal insider trading in the securities of Verio prior to Verio's acquisition of digitalNATION on July 13, 1999. Millsap also consented to entry of judgment against her. See, SEC release. 1/2. Nancy Wojtas joined the Palo Alto office of the law firm of Cooley Godward as a partner in the Business Department. She will concentrate corporate securities, acquisitions, dispositions and financings. She previously worked in Los Angeles office of Manatt Phelps. Previously, she worked at the SEC, both in the Division of Market Regulation, and as Counsel to the Chairman. 1/2. Daniel Park and Mikahel Chang plead guilty in U.S. District Court (NDCal) to theft of trade secrets, and tp aiding and abetting criminal copyright infringement, respectively. A federal grand jury returned the indictment [PDF] on June 14, 2000. Park and Chang accessed Semi Supply Inc.'s customer database and order database. The two will have to forfeit $60,000 in gains. Asst. U.S. Attorneys Ross Nadel and Mavis Lee prosecuted the case. 1/2. President Elect George Bush announced three more nominations: Norman Mineta (D-CA) to be Secretary of Transportation; Spencer Abraham (R-MI) to be Energy Secretary; and Linda Chavez (R-VA) to be Secretary of Labor. Mineta is currently the Sec. of Commerce. He also represented a House district that included San Jose, Calif., from 1974 through 1994. Abraham lost his bid for re-election to the Senate last November. He was active and supportive of technology in the Senate. He was the leading advocate of increased immigration opportunities, including more H1B visas for high tech workers. He was also one of the leading proponents of the electronic signatures bill. However, he will have little opportunity to work on technology issues at the Dept. of Energy. Chavez was Director of the U.S. Civil Rights Commission under Ronald Reagan. More recently, she has advocated the use of porn filtering software on computers used by children in schools and libraries. 1/2. The USPTO put online the Dec. 2000 issue of USPTO Today. It includes an article titled The Evolution of the Business Method Patent and Update on the Business Method Action Plan (at pages 8-10, by Wynn Coggins). It concludes that "Computers and the Internet have created an information age that is truly revolutionizing how we function as a society. New technologies are constantly emerging that didn’t exist three weeks ago, and developers in these areas don’t always recognize the need to protect their discoveries. Thus, traditional patent search strategies need to be enhanced to meet future needs in these growing technology areas, and USPTO is working to bridge the gap with industry and work together to make this happen. With the help of the partnership organizations, concerns about the quality of the searches being performed by patent examiners and the examiner knowledge base on which they have to make decisions on patentable subject matter are being aggressively addressed. The business method patent phenomenon translates to progress. It is an example of the evolution the patent process is undergoing to keep pace in today’s technology and information age." Several members of Congress would like to pass legislation that changes the business methods patent process. See, for example, HR 5364 IH (106th Congress). 1/2. AT&T announced that it completed the sale of Kearns-Tribune, which owns the Salt Lake Tribune, to MediaNews Group for $200 Million. AT&T acquired its interest in Kearns-Tribune when it merged with TCI in 1999. See, AT&T release. 1/2. The FCC has not released a notice of proposed rule (NPRM) regarding selection and allocation of spectrum for Third Generation (3G) wireless technologies. Thomas Sugrue, Bureau Chief of the FCC's Wireless Telecommunications Bureau, stated on Nov. 3 that the FCC is "committed to do a Notice of Proposed Rule Making by the end of the year". He also stated that "our goal is to have auctions ... by the summer of 2002." See, TLJ story of Nov. 3. 3G is intended to bring broadband wireless Internet access to mobile devices. At issue in the as yet unreleased FCC NPRM is use of the 2500 to 2690 MHz band that is currently being used for MMDS, MDS, and ITFS. 1/2. The Infocomm Development Authority (IDA) of Singapore announced that it will delay its Third Generation (3G) wireless spectrum auction. 1/1. The PRC state news agency Xinhua reported that "A CDMA mobile communications network managed by the military was officially handed over to the China United Telecommunications Corporation (China Unicom) Monday in Beijing." See, Xinhua release. |
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