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News, records, and analysis of legislation, litigation, and regulation affecting the computer, internet, communications and information technology sectors

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News Briefs from February 11-15, 2001

2/15. Sen. Frank Murkowski (R-AK) introduced S 346, the Ninth Circuit Court of Appeals Reorganization Act of 2001. This bill would split the U.S. Court of Appeals, Ninth Circuit, into two circuits. It would create a new 12th Circuit comprised of the states of Washington, Oregon, Alaska, Idaho, Montana, and Hawaii. The 9th Circuit would be left with the states of California, Arizona, and Nevada. The bill is cosponsored by all of the Republican Senators from the states that would be in the new 12th Circuit. The bill has been referred to the Senate Judiciary Committee.
2/15. Sen. Sam Brownback (R-KS) said that he will re-introduce a bill intended to spur deployment of broadband Internet access facilities in rural areas. He stated in a speech in the Senate that "in urban and suburban areas, they are getting access to high-speed Internet access ... In the rural areas of my State and in many places across the country, they are not getting access to high-speed Internet. ... I will shortly be submitting a bill to try to address this inequity that is taking place and to keep this digital divide from further exacerbating the economies in suburban areas versus rural areas." He introduced S 877, the Broadband Internet Regulatory Relief Act, in the 106th Congress. It would have provided regulatory relief to ILECs (incumbent local exchange carriers). Sen. Jay Rockefeller (D-WV) has already introduced his "broadband bill" in the 107th Congress. S 88, the The Broadband Internet Access Act of 2001, would provide tax credits to companies that deploy high speed Internet access facilities in underserved areas.
2/15. Sen. John McCain (R-AZ) and Sen. Fritz Hollings (D-SC) introduced 368, the American Voting Standards and Technology Act. Title I pertains to the conduct of elections. It requires, among other things, that the NIST conduct a study of voter participation and emerging voting technology, including "any future and emerging technologies for use in elections, such as Internet voting." See, McCain release regarding voting standards. Titles II and III are unrelated. Title II would create a Center of Excellence for Electronic Commerce at NIST to encourage the use of electronic commerce technologies by federal agencies. Title III would create an "Enterprise Integration Initiative" within NIST.
2/15. Alexander Lynch and Babak (Bo) Yaghmaie will become partners in the law firm of Wilson Sonsoni. They previously worked in the New York office of Gunderson Dettmer. They will also head the newly created New York City office of Wilson Sonsoni. Lynch and Yaghmaie represent technology companies in venture finance, public offerings, mergers and acquisitions. See, release.
2/15. The law firm of Wilson Sonsoni announced that it will open an office in Salt Lake City, Utah. It will be headed by Robert O'Connor, Shawn Lindquist, and Shannon Whisenant. O'Connor was previously general counsel at InsurQuote Systems, in Provo, Utah. Lindquist was previously general counsel at Whizbang Labs, in Provo, Utah. Both were at Wilson Sonsoni before taking in house positions. Whisenant will move from the Palo Alto office of Wilson Sonsoni. See, release.
2/15. A WIPO Arbitration and Mediation Center panel issued its opinion in AOL v. Eremeev, a dispute over registration of the domain name icqplus.org. AOL, which holds numerous trademark registrations worldwide for the mark ICQ, sought to have the domain name transferred to it. Eremeev uses this domain name for a web site that distributes a free software product that supplements ICQ service. The panel found that the icqplus.org domain name is confusingly similar to AOL's mark. However, the panel denied AOL's request on the grounds that AOL did not prove that Eremeev had no legitimate interest in the name, and did not prove that the name had been registered in bad faith.
2/15. Babatunde Osiname pled guilty in U.S. District Court (CDCal) to mail fraud and wire fraud in connection with identity theft and stealing money out of the E*Trade accounts of Ericsson employees. He obtained personal information about Ericsson employees from a former Ericsson payroll department employee, Jeanette Franklin. $1.5 million and that Osiname stole the identities of more than 100 victims, and stole over $1.5 Million. Following complaints from Ericsson employees, the Secret Service and United States Postal Inspection Service investigators uncovered the fraud through an examination of cell phone records. Franklin, who is charged in a 16 count indictment with mail fraud and wire fraud, has not pled guilty. Her trial is scheduled to begin on Feb. 27 before Judge Virginia Phillips. Osiname is scheduled to be sentenced on April 30. See, USAO release.
2/15. A grand jury of the U.S. District Court (NDIll) indicted nine individuals for copyright infringement under the No Electronic Theft Act and/or conspiracy in connection with an Internet software piracy ring. The group, which called itself "Fastlane," copied and distributed software over the Internet, including Microsoft Office 2000, Microsoft Windows Millennium, Adobe Framemaker v6.0, Corel Custom Photo SE, Symantec PCAnywhere and McAfee VirusScan, with a retail value in excess of $1 Million. In an effort to evade detection and prosecution, the group limited access to its web sites to authorized users entering through known Internet Protocol (IP) addresses with pre-established IDs and passwords; concealed their identities with screen names; and used port bouncers to disguise the true IP addresses of their computers and the computers that hosted their web sites. However, an FBI agent infiltrated the group. Also, on Sept. 20, 2000, the FBI executed search warrants and seized Fastlane computers. Special Assistant U.S. Attorney Brian Hayes is prosecuting the case. See, DOJ release.
2/15. The U.S. District Court (DRI) sentenced Thomas Kennedy 14 months in prison for illegally selling electronic cards that unscramble satellite TV signals. Kennedy is one of 15 defendants who were caught in an Internet sting operation run by the U.S. Customs Service. See, DOJ release.
2/15. WorldCom, Intermedia, and Digex announced a proposed settlement of a lawsuit brought by minority shareholders of Digex arising out of WorldCom's planned acquisition of a controlling interest in Digex through a merger with Intermedia. The merger has been approved by the Antitrust Division. The proposed settlement has yet to be approved by the Delaware Chancery Court. See, Worldcom release.
2/15. President Bush announced his intent to nominate Charles James to be an Assistant Attorney General. He will oversee the Antitrust Division of the Department of Justice (DOJ).  He will have major responsibility for determining whether or how to proceed with the government's antitrust case against Microsoft. James is currently the Chairman of the Antitrust and Trade Regulation section of the law firm of Jones, Day, Reavis & Pogue. He worked at the FTC from 1979 through 1985; he was Assistant to the FTC Bureau of Competition Director from 1983 until 1985. He then joined Jones Day. He held several positions in the DOJ Antitrust Division during the administration of the elder Bush, including Deputy Assistant Attorney General and Acting Assistant Attorney General. See, DOJ release and White House release.
2/15. Guenter Burghardt, head of the European Commission's delegation to the U.S. gave a speech at the Sanford Institute of Public Policy at Duke University titled "Prospects for EU-US Trade Relations." He addressed privacy; "On data protection, the EU is under strong pressure from its citizens to adopt much stricter control over access to personal data than is the case in the US Interestingly, US public opinion and that of some US CEOs have moved towards the European position on this issue, resulting in agreement on adoption of the "safe harbor" principle." He also addressed the dispute over the U.S. Foreign Sales Corporation (FSC) tax regime. The FSC regime, and the replacement bill enacted last year, benefits U.S. high tech exporters. Also, if this dispute is not resolved, the EU may impose retaliatory tariffs on U.S. high tech exports. Burghardt stated that FSCs "allow US firms to benefit from 50% tax exemptions for their exports, amounting to tax breaks totaling as much as $4.5 billion in 1999. This is a sum almost 10 times greater than the trade impact of the banana, beef hormone, and aircraft hushkit disputes combined. The FSCs constitute a subsidy to exports which the EU and other parties have argued is not compatible, and the WTO has ruled against this arrangement. Replacement legislation has been proposed by the US, which the EU believes insufficient to meet the requirements established by the WTO. A provisional ruling on the new legislation is expected no later than May 21." He also stated that "The ability of the new Administration to win approval of fast-track or trade promotion authority from Congress, however, is far from certain."
2/15. Feb. 15 was the deadline to submit comments to the FCC in response to its Notice of Proposed Rulemaking (NPRM) regarding implementation of the Children's Internet Protection Act [PDF]. This statute provides that in order to be eligible to receive FCC e-rate subsidies, schools and libraries that have computers with Internet access must have in place certain Internet safety policies, such as the use filtering software. The ACLU and EPIC submitted a comment. They stated that "In our view, CHIPA itself is facially unconstitutional. We anticipate filing a lawsuit to have portions of the law declared unconstitutional." The CDT and PFAW also submitted a comment, in which they stated that they "oppose implementation of the Children's Internet Protection Act. The provisions of the CHIP Act are unconstitutional and will potentially violate users' privacy. We believe that the Federal Communications Commission should refuse to promulgate such unconstitutional rules."
2/15. Consumer Reports published a report on filtering software. It concluded that "In some cases, filters block harmless sites merely because their software does not consider the context in which a word or phrase is used. Far more troubling is when a filter appears to block legitimate sites based on moral or political value judgments." It also found that "Most of the products we tested failed to block one objectionable site in five." The ITAA responded that the report "falls short in fairly characterizing the utility of these consumer tools, and raised questions about the methodology of the analysis." See, ITAA release.
2/15. The RIAA stated that the plaintiffs filed a proposed modified preliminary injunction order with the U.S. District Court (NDCal) in A&M Records v. Napster. However, the RIAA did not release a copy of the proposed order. It stated that it "is not yet a public document."
2/15. The U.S. Court of Appeals (4thCir) issued its opinion in Hunt Masters v. Landry's Seafood Restaurant, a case involving trademark law. Both parties operate crab restaurants in Charleston, SC. One filed suit against the other claiming that the use of the term "crab house" infringed its common law service marks. The District Court rejected the claim, and the Appeals Court affirmed.
2/15. The FCC announced that it denied an application for review of its Cable Service Bureau's denial in part of a request for records pertaining to the FCC's AT&T MediaOne antitrust merger review proceeding. The Media Access Project, Consumers Union, and Consumer Federation of America had requested, pursuant to the Freedom of Information Act, records related to ex parte presentations made during the AT&T MediaOne review.
2/15. The Senate Judiciary Committee held over mark up of the bankruptcy reform bill.
2/15. The NTIA and FCC hosted a public meeting between government and the private sector regarding Third Generation (3G) wireless services. See, agenda.
2/15. The SIIA released its analysis of data published by the Census Bureau on the information services sector of the economy. The SIIA concluded that the data "shows a marked increase in software and information industry revenue between 1998 and 1999. ... software and information revenue totaled $95.4 billion in 1999, an 11.6% increase over 1998. Software revenue accounted for $80.9 billion, an increase of 11.3% over 1998, and information revenue totaled $15.4 million reflecting an increase of 14.9%." See also, SIIA release.
2/15. Attorney General John Ashcroft announced the nomination of Daniel Bryant to be an Assistant Attorney General. He will oversee the Office of Legislative Affairs. He is currently Chief Counsel of the House Judiciary Committee's Subcommittee on Crime. See, DOJ release.
2/14. President Bush announced his intent to nominate Larry Thompson to be Deputy Attorney General. He is currently a partner with the law firm of King & Spalding in Atlanta, Georgia. See, White House release.
2/14. President Bush announced his intent to nominate Ted Olson to be Solicitor General. He is currently a partner in the Washington DC office of Gibson Dunn & Crutcher. See, White House release and GDC release.
2/14. Several class action law firms have filed complaints in U.S. District Court seeking class action status against U.S. Interactive. See, for example, Berger & Montague release.
2/14. Sen. Richard Shelby (R-AL) introduced S 324, the Social Security Privacy Act of 2001, a bill to amend the Gramm Leach Bliley Act, to prohibit the sale and purchase of the social security numbers by financial institutions, and to include social security numbers in the definition of nonpublic personal information. "I believe Congress has a duty to stop Social Security numbers from being bought and sold like some common commodity," said Sen. Shelby. "This legislation would basically prohibit the sale and purchase of an individual's Social Security number. I do not know anyone in this country that believes financial institutions should be making a profit by trafficking individual's Social Security numbers. While financial institutions have used the Social Security number as an identifier, the sale and purchase of these numbers facilitates criminal activity and can result in significant invasions of individual privacy."
2/14. Rep. Heather Wilson (R-NM) and Rep. Gene Green (D-TX) introduced HR 717, the Unsolicited Commercial E-Mail Act of 2001. Rep. Wilson sponsored a similar spam bill in the 106th Congress; it passed the House, but not the Senate. The bill regulates unsolicited commercial electronic mail (UCE). The bill criminalizes intentionally sending UCE  with false "domain name, header information, date or time stamp, originating electronic mail address, or other information identifying the initiator or the routing of such message". The bill requires accurate return addresses on UCE, prohibits sending UCE to someone after they have asked to be removed from a distribution list, requires UCE to be labeled, requires ISPs to let their customers opt out of getting UCE if the ISP profits from allowing it into its system. The bill also provides civil court remedies to ISPs, UCE recipients, and the FTC. The bill also provides ISPs immunity for good faith actions which block email.
2/14. The Senate passed S 320, the Intellectual Property and High Technology Technical Amendments Act of 2001. The bill is sponsored by Sen. Orrin Hatch (R-UT) and Sen. Pat Leahy (D-VT), the Chairman and ranking Democrat on the Senate Judiciary Committee. Sen. Hatch stated during floor debate that this "is a technical corrections bill to clean up some scrivener's errors that have crept into the U.S. Code in the patent, trademark, and copyright laws." It passed by a vote of 98 to 0.
2/14. Sen. Hatch and Sen. Leahy used the time allotted for debating S 320 to identify their intellectual property and high tech agenda for the 107th Congress. The topics which the two intend to address include copyright on the Internet, electronic privacy, encryption policy, business method patents, state government responsibility to respect and protect intellectual property rights, domain names, protecting trademarks in cyberspace, antitrust implications of B2B electronic marketplaces, the increasing tension in the high tech industry between intellectual property rights and antitrust laws, broadband technologies, and freedom of speech. See, Hatch statement.
2/14. Sen. Leahy addressed the opinion [PDF] of the U.S. Court of Appeals (9thCir) in Napster v. A&M Records. He stated in the Senate that "we have to realize things have changed. There has been a lot in the press in the past couple days about the Ninth Circuit Court of Appeals decision in Napster. I suggest that if anyone thinks this is the end of the whole issue, they are mistaken."
2/14. The U.S. Court of Appeals (FedCir) issued its opinion in Amazon.com v. Barnesandnoble.com, an appeal of a trial court preliminary injunction order in a patent infringement case concerning Amazon's "one click" method and system for placing an order to purchase an item via the Internet. Both Amazon.com and Barnesandnoble.com (BN) are online booksellers. At issue is Amazon's U.S. Patent No. 5,960,411, which was issued on Sept. 28, 1999. Amazon filed its complaint in U.S. District Court (WDWash) on Oct. 21, 1999, against BN alleging patent infringement, and seeking a preliminary injunction. Amazon alleged that BN's "Express Lane" ordering system infringes its 411 patent. BN, in turn, challenged the validity of the 411 patent. The District Court issued a preliminary injunction, and BN appealed that order. The Court of Appeals found that Amazon carried its burden with respect to demonstrating the likelihood of success on the issue of infringement, but that BN raised substantial questions as to the validity of the 411 patent. It found that the District Court committed error by misreading the factual content of the prior art references, and by failing to recognize that BN had raised a substantial question of invalidity of the asserted claims in view of these prior art references. However, the Court hastened to add, "this conclusion only undermines the prerequisite for entry of a preliminary injunction. Our decision today on the validity issue in no way resolves the ultimate question of invalidity." Reversed and remanded.
2/14. The House passed HR 524, the Electronic Commerce Enhancement Act, by a vote of 409 to 6, after a brief debate. See, Roll Call No. 14. This bill requires the NIST to assist small and medium-sized manufacturers to integrate and utilize e-commerce technologies and business practices. The House passed an identical bill in the 106th Congress as HR 4429; but it did not pass the Senate. The bill is sponsored by Rep. James Barcia (D-MI).
2/14. Sen. Orrin Hatch (R-UT) made statement in the Senate regarding the opinion [PDF] of the U.S. Court of Appeals (9thCir) in A&M Records v. Napster. He stated that "the Judiciary Committee will need to hold hearings on the decision's possible implications and to get an update on developments in the online music market." He added that "I know that people in Congress are weighing various legislative solutions ..." Sen. Hatch is the Chairman of the Senate Judiciary Committee, which has jurisdiction over intellectual property matters. The Committee held a hearing on Internet music copying last summer. See, TLJ story of July 12, 2000. Also, Sen. Patrick Leahy (D-VT), who is the ranking Democrat on the Judiciary Committee, released a statement. He said that "The Court of Appeals has sent the case back to the District Court to ensure that the rights of creators are protected and that the online marketplace is just that, and not a free-for-all."
2/14. Register of Copyrights Marybeth Peters wrote a letter to Rep. James McGovern (D-MA) regarding the case New York Times v. Tasini. The issue in Tasini is whether, under Section 201(c) of the Copyright Act, newspaper and magazine publishers that publish articles written by freelance authors automatically have the right to subsequently include those articles in electronic databases. She wrote: "201(c) cannot be read as permitting publishers to make or authorize the making of public displays of contributions to collective works. Section 201(c) cannot be read as authorizing the conduct at the heart of Tasini. The publishers in Tasini assert that because the copyright law is 'media-neutral,' the 201(c) privilege necessarily requires that they be permitted to disseminate the authors' articles in an electronic environment. This focus on the 'media-neutrality' of the Act is misplaced." The Supreme Court is scheduled to hear oral arguments in NYT v. Tasini on March 28.
2/14. Stuart Eizenstat joined the Washington DC office of the law firm of Covington & Burling as a partner and head of its international practice. He was previously Deputy Secretary of the Treasury in the Clinton administration. Recently, he worked on Foreign Sales Corporation (FSC) tax regime issues.
2/14. The U.S. Court of Appeals (4thCir) issued its opinion in Bell Atlantic Maryland v. MCI WorldCom, case seeking review of a decision made by the Maryland Public Service Commission (MPSC) on reciprocal compensation rights under telecommunications interconnection agreements. The Appeals Court held, two to one, that the action against the MPSC and its individual members in their official capacity is barred by the Eleventh Amendment. Judge Niemeyer wrote the opinion, and Widener joined; King dissented.
2/14. The U.S. Court of Appeals (4thCir) issued its opinion in BellSouth v. North Carolina Public Services Commission, another case seeking review of state decisions regarding reciprocal compensation rights. The same three judge panel ruled, two to one, that the Eleventh Amendment barred the action against the state.
2/14. The FCC released its annual report on Cable Industry Prices [36 pages in MSWord]. The report found that "both competitive and noncompetitive operators increased their average monthly rates by 5.8% ..." and that "the competitive differential between competitive and noncompetitive operators remained constant at 5.3% between 1999 and 2000." It also found that "cable operators point to increased programming costs to explain a significant portion of their rate increases. ... On a per channel basis, the average monthly rate for competitive operators remained constant for the year ending July 1, 2000, while for noncompetitive operators the average monthly rate per channel increased by one cent or 1.5% over the same period." The report also found that "47% offered Internet services and 7% offered telephone service. ... Revenue from non-video sources increased as a percent of total revenue from 1.5% to 3.5% between 1999 and 2000." The NCTA released a statement saying the price increases were modest. The Consumers Union (CU) released a statement complaining about rate increases. "Obviously, this report shows that it's time for Congress and the FCC to clamp down on cable monopolies," said the CU's Gene Kimmelman.
2/14. The Senate Banking Committee, which has jurisdiction over some trade issues, held a hearing on export controls and S 149, the Export Administration Act. The bill authorizes the Secretary of Commerce to identify items subject to export control. It allows the Secretary to remove controls on an item that has been determined to have foreign availability or mass-market status, and requires the Secretary to make foreign availability or mass-market status determinations within 6 months of receiving a petition for such status. John Hamre (President and CEO of the Center for Strategic and International Studies) and Donald Hicks (Chairman of Hicks and Associates) testified in support of the bill. See, statement by Sen. Phil Gramm (R-TX), prepared statement of Hamre, and prepared statement of Hicks.
2/14. The Export Administration Act is sponsored by Sen. Mike Enzi (R-WY); and he is its leading proponent. He stated at the Senate Banking Committee hearing that he expected a committee mark up, "hopefully later this month." He also predicted that the bill will come to a floor debate and vote sometime this year. Sen. Paul Sarbanes (D-MD), the ranking Democrat on the Committee, called the bill "an excellent piece of legislative craftsmanship." Sen. Phil Gramm (R-TX), the Chairman of the Committee, pledged to work for passage of the bill. He also stated, "don't get the idea that we have closed the book on this bill. If you have got a better idea, we will throw out ours, and take yours." Sen. Bob Bennett (R-UT) compared existing export restraints to the Smoot Hawley tariff. "We could destroy American companies by cutting them off from foreign markets," he said.
2/14. John Hamre, who until recently was Deputy Secretary of Defense, has undergone a conversion on export control issues. He previously fought against Congressional efforts to liberalize export restraints on encryption and hardware products. He stated at the Senate Banking Committee hearing on the Export Administration Act that "I spent two years when I was the Deputy Secretary fighting the software industry on encryption issues -- absolutely convinced that these guys were going to sell our security down the river, if we didn't protect ourselves. And I bought it. I know how to come up here and testify ... we all know how to put testimony out front that makes it awkward for you to vote." But then he "realized ... we are probably not going to be safer as a country if all of the encryption software is written overseas. It is a lot better if we know what our companies are doing, and that they are talking to us, and they give us a running start on how to stay up with it." He argued that the the U.S. should "convert from a transaction based licensing system to a process based licensing system. In essence, rather than require companies to submit licenses for each individual sale, instead the government should license the export control procedures of a company." That is, technology export companies should be the "first line of defense". He advocated a partnership between government and the private sector. He stated that now the relationship is "confrontational."
2/14. The House Financial Services Committee held its organizational meeting. Rep. Richard Baker (R-LA) will chair the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises. Rep. Peter King (R-NY) will chair the Subcommittee on Domestic Monetary Policy, Technology, and Economic Growth. Rep. Spencer Bachus (R-AL) will chair the Subcommittee on Financial Institutions and Consumer Credit. See release. See also, membership list.
2/14. House Financial Services Committee Chairman Michael Oxley (R-OH) and all six Subcommittee chairs held a news conference regarding the Committee's oversight plan. See. release. Rep. Oxley said that there will be a comprehensive review of the Securities Acts. "We will be taking a serious look. When you look at the real world today, with people trading online. Some of the discount brokers -- now 75% of their trades are online. We are looking at statutes and regulations that go back to the 1930s. I think that it is reasonable to assume that some of them may be antiquated, duplicative, out of date. And, we are going to take a serious look at that. We will take some time. But we need a thorough review of that. ... We are going to start soon. But I cannot tell you when it is going to end."
2/14. Rep. Oxley stated that "with the passage of the electronic signatures legislation in the last Congress, the upside potential for great savings in the financial services area are out there. The paperless society -- the idea that we can use electronic commerce to our advantage in lowing consumer costs -- we'll save a lot of trees in the process. It has tremendous upside potential. Peter King, and his Subcommittee, will be very active in doing that." Rep. Oxley also explained the jurisdictions of the new Financial Services Committee and the House Commerce Committee over electronic commerce. "Well, all of the transactional things that deal with financial services is under our jurisdiction. Everything that has to do with electronic commerce in general stays with the Commerce Committee. ... It is the functionality of what you are doing, by the electronic method, that determines jurisdiction, not the avenue itself ..."
2/14. The Senate Communications Subcommittee held a hearing on ICANN. See, statements of:
  Michael Roberts (ICANN CEO)
  Vint Cerf (ICANN)
  Michael Froomkin (Univ. of Miami)
  Roger Cochetti (VeriSign Network Sol.)
  Brian Cartmell (eNIC Corp.)
2/14. The House Science Committee held its organizational meeting for the 107th Congress. See, list of members.
2/14. The Congressional Internet Caucus Advisory Committee hosted a large reception and technology demonstration in the Hart Senate Office Building. New FCC Chairman Michael Powell spoke briefly, as did all four Co-Chairs of the Congressional Internet Caucus: Sen. Conrad Burns (R-MT), Sen. Patrick Leahy (D-VT), Rep. Rick Boucher (D-VA), and Rep. Bob Goodlatte (R-VA).
2/14. The Department of Commerce's International Trade Administration published a notice in the Federal Register in which it invites U.S. companies to participate in the High Technology Solutions Trade Mission. The itinerary includes visits to Paris, Florence, and Warsaw on May 12-22, 2001. Recruitment closes on April 1, 2001. See, Federal Register, Feb. 14, 2001, Vol. 66, No. 31, at Page 10271.
2/14. Microsoft announced that Rick Belluzzo will be its new President and Chief Operating Officer, and that current COO Bob Herbold will retire. See, release.
2/14. Rep. Howard Coble (R-NC), introduced HR 614, the Copyright Technical Corrections Act of 2001, and HR 615, the Intellectual Property Technical Amendments Act of 2001. Both bills are cosponsored by Rep. Howard Berman (D-CA). Coble and Berman are the Chairman and ranking Democrat on the House Judiciary Committee's Courts, Internet, and Intellectual Property Subcommittee. Rep. Coble stated that HR 614 "corrects errors in references, spelling, and punctuation". He said that HR 615 "makes a small number of other non-controversial changes requested by the PTO. For example, it changes the title of the chief officer of the PTO from 'Director' to 'Commissioner.' It also clarifies some of the agency's administrative duties and the protections for the independent inventor community." These two bills are similar to S 320 ES, the Intellectual Property and High Technology Technical Amendments Act of 2001, which passed the Senate on Feb. 14 by a vote of 98-0.
2/14. Rep. Paul Gillmor (R-OH) introduced HR 646, the Federal Communications Commission Reform Act, a bill to establish a commission to study the FCC. The bill is cosponsored by six other members of the House Commerce Committee, the committee with jurisdiction. The commission created by this bill would "study and report on the organizational structure of the Federal Communications Commission, with an emphasis on determining (1) whether that structure should be changed to reflect the current state of telecommunications, including the rise of the Internet; and (2) whether there should be a reduction in the number of commissioners."
2/13. Rep. Lois Capps (D-CA) introduced HR 573, the Teacher Technology Training Act, in the House. Sen. Dianne Feinstein (D-CA) introduced S 307, the Teacher Technology Training Act, in the Senate. These identical bills would authorize $100,000,000 for each of the years 2002 through 2006 to be awarded by the Secretary of Education in grants to state education agencies, which would in turn award grants to local education agencies to provide "classroom-related technology training for licensed or certified elementary school or secondary school teachers." The bills have been referred to the House Education and Workforce Committee and the Senate Health, Education, Labor, and Pensions Committee.
2/13. Rep. Karen Thurman (D-FL) introduced HR 604, the Internet Toy Safety Awareness Act, a bill that requires safety labels for certain Internet advertised toys and games. The bill also instructs the Consumer Product Safety Commission to promulgate regulations. It has been referred to the House Commerce Committee. Rep. Thurman is not a member. However, Rep. Bart Stupak (D-MI), who is a cosponsor of the bill, is.
2/13. Gray Cary, a Silicon Valley based law firm, selected 10 new partners: Pamela Burke (corporate and securities group), William Choe (corporate and securities),  Sean Cunningham (intellectual property litigation and employment services), John Fogg (corporate and securities), Peter Leal (intellectual property and technology), Timothy Lohse (intellectual property and technology), Scott Oliver (intellectual property litigation), Daniel Pascucci (litigation), Magan Ray (employment services), and Steven Sprinkle, (intellectual property and technology). See, release.  
2/13. The FTC filed a complaint [PDF] on Feb. 13 in U.S. District Court (NDGa) against a domain name registration scam operation known as the National Domain Name Registry seeking injunctive relief. The Defendants, who are not domain name registrars, sent fraudulent bulk unsolicited fax solicitations to domain name owners stating, "URGENT NOTICE OF IDENTICAL DOMAIN NAME APPLICATION BY A THIRD PARTY." The fax solicitations also offered to block the applications for a fee of $70. The District Court issued a Temporary Restraining Order [PDF] on Feb. 13 barring defendants from offering domain name registration services, freezing defendants' assets, and shutting down their web sites. The order also requires any web hosting company to deny public access to any of defendants' domains. It also requires Network Solutions and any other domain name registrar to suspend the registration of defendants' domains. The District Court also set the hearing on the motion for preliminary injunction for Feb. 26 at 3:00 PM. Darren Morgenstern of Ontario Canada is the scam artist. Stephen Cohen and Catherine McBride are the FTC attorneys handling the case. Julie Carnes is the Judge who issued the TRO. See also, FTC release and ICANN release.
2/13. Sen. Orrin Hatch (R-UT) and Sen. Patrick Leahy (D-VT) introduced S 320, the Intellectual Property and High Technology Technical Amendments Act of 2001, a bill to make technical corrections in patent, copyright, and trademark laws.
2/13. Rep. Asa Hutchinson (R-AR) and Rep. Jim Moran (D-VA) introduced the Privacy Commission Act [PDF], a bill to create a bipartisan Privacy Protection Commission. This Commission would be charged with studying a wide range of privacy issues, including online collection of information, financial, medical and employment records, and government records (including the census, drivers license numbers). "Protecting privacy in a manner that doesn't stunt the growth of electronic commerce is our central policy challenge," said Rep. Moran. See, Hutchinson release and gop.gov release. Hutchinson and Moran also introduced a similar bill in the 106th Congress -- HR 4049. The House voted 250 to 146 in favor of that bill on Oct. 2, 2000. See, Roll Call No. 503. However, since it was considered under a suspension of the rules, a two thirds majority was required for passage.
2/13. IBM responded to the recently published book and recently filed lawsuit which accuse it of assisting Nazis in their persecution of Jews. The UK's Sunday Times published a story on Feb. 11 about the book. The book is also serialized in the Sunday Times. IBM said this: "It has been known for decades that the Nazis used Hollerith equipment and that IBM's German subsidiary during the 1930s -- Deutsche Hollerith Maschinen GmbH (Dehomag) -- supplied Hollerith equipment. As with hundreds of foreign-owned companies that did business in Germany at that time, Dehomag came under the control of Nazi authorities prior to and during World War II. ... IBM does not have much information or records about this period or the operations of Dehomag. Most documents were destroyed or lost during the war." See, IBM release.
2/13. Feb. 13 was the deadline to submit comments to the IRS in its proceeding regarding its regulation of Internet speech. The IRS released a document in October 2000 stating that it is considering whether to issue guidance regarding the application of the Internet Revenue Code to various types of Internet communications by tax exempt entities. Tax exempt status is critical to the fund raising efforts of many groups. Tax exempt status means that donors' contributions are tax deductible; also, many foundations only donate to tax exempt entities. The Congressional Joint Committee on Taxation conducted an investigation of the IRS following news media reports that the IRS engaged in partisan bias in its the handling of tax-exempt organization matters. Its March 2000 report [167 page in PDF] found "no credible evidence of intervention by Clinton Administration officials".
2/13. The Alliance for Justice, a Washington DC based interest group, which serves as an umbrella organization for a wide range of civil rights, environmental, women's, and other groups, submitted a comment to the IRS. It argued that "In most cases, communication on the Net is similar to communication in other media, and the IRS should simply apply existing principles." It also argued that "It may be better, in some areas, to wait until the Internet matures before attempting to promulgate regulations that new technologies and applications will make obsolete." The Independent Sector, a collection of charitable, educational, religious, health, and social welfare entities, also submitted a comment [36 pages in PDF].
2/13. The FCC announced that the Commission meeting on February 22, 2001, will focus on "a comprehensive review of FCC policies and procedures by the Commissioners and senior agency officials." All eight FCC bureau and office chiefs will report on their internal management procedures and current regulatory issues, to be followed by questions and dialogue with the Commissioners. The FCC will not take up any other agenda items at this meeting. The new FCC Chairman, Michael Powell, stated, "I think the monthly meeting is a good forum for the Commission to publicly take stock of how well we are organized to be as responsive as possible to the issues and needs of the industries under the purview of the FCC." See, release.
2/13. The FBI's NIPC issued an assessment regarding the Anna Kournikova worm. It stated that "the 'Anna Kournikova' mass-mailing worm/virus is spreading rapidly throughout the Internet. Although it is propagating rapidly, it is seen as a low threat due to its apparently non-destructive payload. Although it does not infect files on the victim's systems, this mass-mailing worm can potentially clog email servers because of the volume it generates." The NIPC issues three levels of warnings: assessments, advisories and alerts. Assessments are the lowest threat level.
2/13. The USPTO announced that it will co-host a three day conference in London on the Internet and Intellectual Property Crime. The event will be hosted by the USPTO, the U.N. Economic Commission for Europe -- Advisory Group on the Protection and Implementation of Intellectual Property Rights for Investment (UN/ECE), and the U.K. Patent Office. See, release.
2/13. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Sisco v. Brush, a case concerning overlapping areas of law (trademark and customs) and jurisdiction (U.S. District Court and Court of International Trade -- CIT). Sisco and Brush both make strong boxes. Brush registered the mark "Fire Safe", and recorded it with U.S. Customs Service. The Customs Service detained strong boxes imported by Sisco containing the mark "Fire Safe". Sisco filed a complaint in U.S. District Court (CDCal) seeking declaratory judgment of non-infringement and cancellation of Brush's trademark. The Court granted Sisco's request for a preliminary injunction regarding the Customs Service detention. Brush appealed, arguing, among other things, that exclusive jurisdiction rests with the CIT. The Appeals Court ruled the District Court has jurisdiction: the District Court has jurisdiction over a challenge to the seizure of goods, while the CIT has exclusive jurisdiction over a challenge to the denial of a protest of exclusion of goods.
2/13. Marc Osgoode joined the NCTA as Senior Director for Communications. See, release.
2/12. Rep. Jim Leach (R-IA) introduced HR 556, the Unlawful Internet Gambling Funding Prohibition Act, a bill to prevent the use of certain bank instruments for unlawful Internet gambling. The bill does not illegalize any form of Internet gambling. Rather, it provides that if a "bet or wager is unlawful under any applicable Federal or State law in the State in which the bet or wager is initiated, received, or otherwise made" then certain federally regulated financial transactions made not be used to transact the illegal Internet gambling operation. The bill provides that "No person engaged in a gambling business may knowingly accept, in connection with the participation of another person in unlawful Internet gambling -- (1) credit, or the proceeds of credit, extended to or on behalf of such other person (including credit extended through the use of a credit card); (2) an electronic fund transfer ... (3) any check, draft, or similar instrument ..." The Congress has yet to pass an Internet gambling bill. Rep. Bob Goodlatte (R-VA), who sponsored bills in the 105th and 106th Congresses, has yet to introduce his own bill in the current Congress (107th).
2/12. The U.S. Court of Appeals (1stCir) issued its opinion in U.S. v. D'Amario. This is a search and seizure case. Police obtained a warrant which authorized police to search D'Amario's home for any "computer, word processor, printer, typewriter ribbons, computer ribbons, computer discs, computer software, hard drive computer components or any other component or part of any instrument or machine capable of producing a printed document." Police searched a dresser drawer and found an illegal firearm. D'Amario moved to suppress evidence of the firearm on the grounds that it was beyond the scope of the warrant. The District Court denied the motion. The Court of Appeals affirmed.
2/12. President Bush will nominate Charles James to be the next Assistant Attorney General for the Antitrust Division of the Department of Justice (DOJ), according to a story by the Associated Press. Whoever fills this position will have major responsibility for determining whether or how to proceed with the government's case against Microsoft. James is a partner in the Washington DC office of the law firm of Jones, Day, Reavis & Pogue. He is the Chairman of the firm's Antitrust & Trade Regulation Practice. After graduating from law school in 1979 he worked at the FTC. This culminated with a position as Assistant to the FTC Bureau of Competition Director, from 1983 until 1985. He then joined Jones Day. He held several positions in the DOJ Antitrust Division during the administration of the elder Bush, including Deputy Assistant Attorney General and Acting Assistant Attorney General. He then rejoined Jones Day.
2/12. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Napster v. A&M Records, largely upholding Judge Patel's findings regarding copyright infringement. Napster uses peer-to-peer file sharing to allows its users to make music files stored on individual computer hard drives available for copying over the Internet by other users. Last year U.S. District Court Judge Marilyn Patel issued a preliminary injunction against Napster. The Court of Appeals upheld Patel's findings that Napster users engage in direct copyright infringement, and that Napster engages in both contributory and vicarious infringement. The Court also upheld Patel's rejection of Napster's defense of fair use. The Court ruled that the issue of whether Napster may obtain shelter under the safe harbor provisions of the Digital Millennium Copyright Act should be developed at trial. The Court also upheld Patel's ruling that the Audio Home Recording Act does not cover the downloading of these music files to computer hard drives. However, the Appeals Court found Judge Patel's injunction to be overly broad, and remanded the matter to her to fashion injunctive relief consistent with its opinion. Napster may be held liable for contributory copyright infringement only to the extent that it knows of specific infringing files with copyrighted musical compositions or sound recordings, knows or should have known that the files are available on its system, and fails to act to prevent the distribution of the copyrighted material. Beezer wrote the opinion, in which Schroeder and Paez joined. See also, 9th Circuit's summary [PDF] of its opinion.
2/12. Record company officials, their attorneys, and several musicians held a press conference in Washington DC immediately after the release of the opinion in the Napster case. RIAA CEO Hillary Rosen stated that "It is time for Napster to stand down and build their business the old fashioned way. By seeking permission first." Rosen also predicted that "this opinion is so clear that Congress won't get involved in this case." Musicians praised the ruling. "The decision pretty much writes Napster's epitaph," said attorney Charles Cooper. "Its days of shoplifting are over."
2/12. Napster President Hank Barry also issued a statement. "Under this decision Napster could be shut down ..." He did not state whether Napster would seek further review by the Ninth Circuit, or petition the Supreme Court for writ of certiorari. However, he did address legislative remedies. He stated: "The Court also very narrowly interpreted the Congress's intent when it comes to licensing, and we have seen that this is an issue of concern to the Congress. We encourage members of our community to contact their representatives to let Congress know how much Napster means to them."
2/12. The RIAA hired Charles Cooper to provide legal services in connection with any Supreme Court review of the Napster case, and legislative strategy services. Cooper is the senior partner of the Washington DC law firm of Cooper Carvin & Rosenthal. He is a former law clerk to Chief Justice Wm. Rehnquist, and a former Asst. Atty. General for the Office of Legal Counsel during the Reagan administration. He has testified several times before the House Judiciary Committee on Constitutional issues.
2/12. Rep. John Conyers (D-MI), the ranking Democrat on the House Judiciary Committee (which has jurisdiction over intellectual property legislation) had this to say about the Napster ruling: "This decision is a huge victory for the Internet, consumers, and e-commerce and means that the information age will not countenance high-tech piracy. It shows that intellectual property rights are as enforceable over the Internet as they are elsewhere, and that they promote commerce on the Internet. Napster was a service whose only purpose was to make money off of the creative inspirations of others. Having put no effort into the writing, singing, or marketing of music, Napster took it upon itself to facilitate even encourage the mass distribution of copyrighted songs."
2/12. President Bush made several key nominations at the Department of Commerce.
  Bush nominated Kenneth Juster to be Under Secretary of Commerce for Export Administration.
 Juster is currently a partner in the Washington DC office of the law firm of Arnold & Porter, where he handles international trade and transactions, and international arbitration and litigation. He worked for Lawrence Eagleburger at the State Department during the administration of the elder Bush.
  Bush nominated Faryar Shirzad to be Assistant Secretary of Commerce for Import Administration. He was International Trade Counsel for the Senate Finance Committee.
  Bush nominated Theodore Kassinger to be General Counsel of the Department of Commerce. He is a partner in the Washington DC office of the law firm of Vinson & Elkins, where he has an international trade practice.
See, release.
2/12. The U.S. Court of Appeals (DC Cir) heard oral argument in Veracon Corp v. FCC. This is a Petition for Review of an FCC order affecting a broadcast radio license (WNNJ617) in Hinsdale, Illinois.
2/12. The FTC announced a Stipulated Final Judgment and Order in FTC v. Periera, a civil enforcement action to enjoin a "page jacking" and "mouse trapping" scam run by pormographers. The FTC filed its original complaint in U.S. District Court (EDVa) on Sept. 14, 1999. It obtained a preliminary injunction on Sept. 21, 1999. (See, TLJ story). The Australian Competition and Consumer Commission (ACCC) also pursued defendants present in Australia. Page jacking is a scam which manipulates online search engine technology to cause web surfers seeking legitimate web pages to end up in the web pages of the scam artist. The perpetrator copies and puts online the legitimate web pages of others, and adds a redirect script which includes the URL of another web site run by the perpetrator. These "page jacked" pages are then indexed by search engines, and web users find and click through to the page jacked pages via search engine listings, thinking that they are going to a legitimate web page. In the Periera case, the redirect sites all contained advertisements for pormography. With "mouse trapping," scripts are added to the pages containing porm ads which cause more porm ads pages to be displayed when the user clicks the browser's back or close buttons. (See, TLJ story.) The FTC announced on Feb. 12 that under the settlement, defendant Gregory Lasrado is barred from future page jacking operations, and other fraudulent acts. The FTC also obtained default judgments enjoining two other defendants. However, the lead defendant, Carlos Periera, of Portugal, was never located.
2/12. The USPTO published in its web site the February edition of USPTO Today [PDF]. It contains the transcript of an interview with Esther Kepplinger, Deputy Commissioner for Patent Resources and Planning. She addressed workforce issues, and the diversion of USPTO user fees to subsidize other government programs. She stated that "we are increasingly having a difficult time in retaining or accessing the fees that we generate through the work that we're doing." She also stated that "I think that we're also going to need to look at legislative changes to our processes that could have more dramatic impacts on the way that we do our business and shorten or change the way we do examinations so that we're able to do more with less resources." She suggested that the USPTO may utilize retired workers. (See, page 6.)
2/12. Andrew Berg joined the Washington DC office of the law firm of King & Spalding as a partner in the firm's antitrust practice. He will counsel clients involved in mergers and acquisitions and antitrust matters before the FTC, the Antitrust Division of the Department of Justice, state attorneys general and in private litigation. He also works on consumer protection and unfair and deceptive trade practice matters involving advertising, marketing, and credit practices at the FTC. He was previously a partner at Akin Gump. See, release.
2/12. Hewlett Packard (HP) announced that it will participate in the EU privacy safe harbor. The safe harbor agreement is between the U.S. Department of Commerce and European Union Data Protection Authorities. The safe harbor provides legal protection and a framework allowing for the safe transfer of personal information from European Union countries to the United States. HP is the first major technology company to join the safe harbor. See, release.
2/12. The Privacy Coalition held a press conference to announce a privacy initiative. It seeks to have Members of Congress and state legislators sign a "Privacy Pledge." See, TLJ story.
2/12. Oracle announced that Bill Clinton will deliver the opening keynote address at the Oracle AppsWorld conference in New Orleans on Feb. 19. See, release.
2/12. President Bush designated Laura Unger as acting Chairman of the SEC. See, release. Rep. Mike Oxley (R-OH) praised the appointment in a statement. He said that "Mrs. Unger has been a leader in ensuring that investors and market participants gain full advantage of new technologies as they are used in our securities markets."
2/12. President Bush nominated Thelma Askey to be a Commissioner of the USITC. She was a Commissioner until December of 2000, when her term expired.
2/12. The Copyright Office (CO) published a notice in the Federal Register that it is initiating the six-month voluntary negotiation period for determining reasonable rates and terms for the public performance of sound recordings by new subscription services. Parties requesting to participate in the negotiation process must notify the CO by March 1, 2001. See, Federal Register,  Feb. 12, 2001, Vol. 66, No. 29, at Pages 9881 - 9882.
2/12. The U.S. Court of Appeals (4thCir) issued its opinion in USA v. Barth, an appeal of a sentence imposed for illegal transportation, by computer, of child pormography in interstate commerce, in violation of 18 U.S.C. 2252A(a)(1). Defendant was formerly employed by the federal government as a data standards manager.
2/11. President Bush issued an Executive Order which extended the expiration date of the President's Information Technology Advisory Committee from Feb. 11 to June 1, 2001.

Go to News Briefs from February 6-10, 2001.


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