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News Briefs from February 16-20, 2001

2/20. Deborah Garza will join the Washington DC office of the law firm of Fried Frank as a partner in the antitrust section on March 1, 2001. She previously was an antitrust partner in the Washington DC office of Covington & Burling. The head of Fried Frank's antitrust section, Rick Rule, moved from Covington in January. Both Rule and Garza worked in Antitrust Division of the Justice Department during the Reagan and elder Bush administrations. Garza rose to Chief of Staff and Counselor in 1988-89. Rule rose to be the Assistant Attorney General in the Antitrust Division. See, release.
2/20. The law firm Greenberg Traurig announced that Vincent Chieffo joined the firm's Los Angeles office as a shareholder in the intellectual property and entertainment practice areas. He handles litigation and transactional matters involving copyright, literary rights, rights of publicity, film financing, international partnerships, music publishing, recording artists, and record companies. See, release.
2/20. A grand jury of the U.S. District Court (NDCal) returned an indictment [PDF] of Roby Matheny for five counts of tax evasion and filing false tax returns in violation of 26 U.S.C. 7201 and 7206(1). The indictment states that Matheny is the President and owner of 100% of the stock of MSIS Semiconductor, Inc. in San Jose, Calif. He is alleged to have evaded the payment of $450,000 in taxes owed by him for the years 1994 and 1995 by failing to report over $1.5 Million in income. See, USAO release.
2/20. An individual named Roni Nigri filed a complaint [PDF] in U.S. District Court (CDCal) against Emulex and eight of its officers and directors alleging violation of federal securities laws. The plaintiff, who is represented by the law firm of Milberg Weiss and other law firms, seeks class action status. Count I alleges violation of  10b of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder (fraud). Count II alleges violation of  20 of the Act by Emulex, CEO Paul Folino and CFO Rockenbach (controlling person liability). Emulex (NASDAQ: EMLX) makes Fibre Channel host adapters, hubs, ASICs and software products that provide connectivity solutions for Fibre Channel storage area networks (SAN), network attached storage (NAS) and RAID. Milberg Weiss is a law firm that specializes in bringing class action securities suits against tech companies when their stock prices drop.
2/20. Several class action securities law suits have been filed against NICE Systems. See, for example, complaint [PDF] filed in the U.S. District Court (DNJ) on Feb. 20 by the law firm of Milberg Weiss. Nice Systems (NASDAQ: NICE) is based in Ra'anana, Israel; it has subsidiaries and offices in several other countries, including the U.S. It provides multimedia digital recording applications and related services for business interaction management.
2/20. The Supreme Court denied certiorari in Time Warner Entertainment v. FCC, a case regarding the constitutionality of the cable ownership caps of the 1992 Cable Act. See, Order List [PDF] at page 29. TWE sought review of a May 19, 2000 opinion of the U.S. Court of Appeals (DCCir) upholding the constitutionality of two provisions of the 1992 Cable Act. The subscriber limits provision directs the FCC to limit the number of subscribers a cable operator may reach. The channel occupancy provision directs the FCC to limit the number of channels on a cable system that may be devoted to video programming in which the operator has a financial interest. TWE unsuccessfully argued that these limits violate the First Amendment. The Supreme Court declined to hear the case, without writing an opinion. AT&T now holds more than the 30% maximum share of subscribers, and pursuant to an FCC order, must divest its interest in TWE. AT&T has also unsuccessfully lobbied the Congress to amend the statute.
2/20. The Supreme Court also denied certiorari in many other cases, including:
  IBM v. U.S.
  Public Service Comm. of Utah v. Qwest.
  CSU v. Xerox.
  McManus v. MCI.
See, Order List [PDF].
2/20. The Supreme Court granted certiorari in J.E.M. AG Supply v. Pioneer Hi-Bred International, a patent infringement case involving the patentability of corn seeds. The U.S. District Court (NDIowa), and the U.S. Court of Appeals (FedCir), both held that seeds are patentable. See, Jan. 19, 2000, opinion of the Court of Appeals. See, Order List [PDF].
2/20. Napster and Bertelsmann officials held a press conference in San Francisco to announce an offer to the recording industry to license copyrighted music recordings. Napster also released a statement: "Napster's proposal will provide $1 billion to the major labels, songwriters and independent labels and artists over 5 years. Major labels will receive $150 million per year for a non-exclusive license, divided according to files transferred. For example if the transfers were evenly divided among five major labels, each would receive $30 million. $50 million per year will be set aside for independent labels and artists to be paid out based on the volume of transfers." Napster also stated that "This business model has not changed substantially for the last six months and has been presented to all the major labels." On Feb. 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 by Napster. The Napster Bertelsmann press conference was largely a public relations event.
2/20. Hillary Rosen, President of the RIAA, released a statement directed at Napster. "Stop the infringements, stop the delay tactics in court." She also accused Napster of "trying to engage in business negotiations through the media."
2/20. AOL Time Warner Chief Operating Officer Robert Parsons gave a speech in Beverly Hills, California, on the case A&M Records v. Napster. He stated that "AOL Time Warner is the largest copyright owner in the world. ... From this perspective, we divide the world into two kinds of people: those who respect the rights of creators and owners of intellectual property to determine how and when their property is used, and those who do not.  Napster and its ilk are in the latter category. Strip away all the rhetoric about free choice and third-party neutrality and what Napster has been found guilty of is old-fashioned copyright infringement or, in laymen's terms, ripping off what doesn't belong to it. As an industry, we must continue to make it clear that there are no compromises or shortcuts that will lead us to settle for anything less than the legal protections that were ringingly reaffirmed by the 9th Circuit Court just last week. We are at war with those intent on stealing the work product of our artists for the purpose of building their own commercial enterprises."
2/20. The Employment and Training Administration of the Labor Department extended the period for filing comments regarding its Interim Final Rule (IFR) implementing the 1998 H1B visa bill. The American Competitiveness and Workforce Improvement Act of 1998 (ACWIA) was passed by the Congress in late 1998 to temporarily increase the annual cap on visas for high tech workers, known as H1B visas. This IFR was published on Dec. 20, 2000. It is a massive document that is online in three sections. See, Federal Register, Dec. 20, 2000, Vol. 65, No. 245, at pages 80109-80158, 80159-80208, and 80209-80254. The new deadline is April 23, 2001. See, notice in Federal Register. Some Members of Congress have long since criticized the Dept. of Labor for its repeated delays in issuing these regulations, which implement the American worker protection provisions of the ACWIA.
2/20. Lernout & Hauspie announced that the U.S. Bankruptcy Court (DDel) granted final approval of a 13-month $60 million Debtor in Possession financing facility to be provided to L&H and its affiliates. See, LH release.
2/20. The ITAA announced that it has completed a survey of federal Chief Information Officers and information resource managers titled "The New Federal Agenda: Point, Click, Change!". The ITAA published in its web site a press release, but not the survey.
2/19. The Justice Department filed a motion to intervene, file a brief, and participate in oral argument, in Universal City Studios v. Eric Corely with the U.S. Court of Appeals (2ndCir) on Feb. 8, 2001. The Appeals Court granted the motion on Feb. 20. This case is also known as the DeCSS hacker case. Several movie makers sued Corely and others in U.S. District Court (SDNY) on Jan. 14, 2000, alleging violation of the Digital Millennium Copyright Act (DMCA) for publishing code for circumventing the plaintiffs' copy protection technology (known as CSS) for the DVD versions of their movies. The District Court entered its amended final judgment on Aug. 23, 2000, permanently enjoining defendants from violating the DMCA. The Court rejected defendants' argument that their acts constituted protected free speech.
2/19. The U.S. Attorney filed a brief on Feb. 19, in which its argued that the District Court should be affirmed, and the anti-circumvention provisions of the DMCA should be upheld. It wrote: "Until fairly recently, artists and authors had only to contend with the bootleg distribution of their works in hard-copy form; they now face the reality of uncontrollable, on-line infringement. Embracing the digital medium as their own, infringers threaten to usurp much if not all of the Internet market for copyrighted works."
2/19. The ICANN published in its web site its Preliminary Fiscal Year 2001-2002 Budget.
2/17. The ICANN published in its web site a document titled Report from the DNSO Review Task Force -- DNSO Review Report Version 3.0.
2/16. The Wall Street Journal published an article which stated that "The Internet's phone book is up for sale -- and though the listings may represent a treasure trove for marketers, the move also risks a serious privacy backlash. At issue are millions of entries in the domain-name database operated by the Network Solutions unit of VeriSign ..." The EPIC promptly wrote a letter to the Rep. Fred Upton (R-MI) and Rep. Ed Markey (D-MA), the Chairman and ranking Democrat on the House Telecom Subcommittee, and Sen. Conrad Burns (R-MT) and Sen. Ernest Hollings (D-SC), the Chairman and ranking Democrat on the Senate Communications Subcommittee, in which they cited this article. EPIC urged the Members of Congress "to examine whether this sale is currently permissible and if so, whether it is therefore necessary to adopt new legislation to safeguard the information that is provided by Internet users and companies as a condition of registering a domain name. We believe that the sale violates well established principles of U.S. law as well as international privacy standards, including privacy rules specifically developed to address concerns related to privacy in the context of domain name registration."
2/16. HP announced that it settled its patent lawsuit against Teco Information Systems Europe Limited (Teco Europe) regarding thermal inkjet cartridges. HP recently instituted patent infringement proceedings in Germany, France and the UK against International United Technology Co. Ltd. (IUT). HP filed a lawsuit in the UK against Teco Europe for acting as the European distributor of thermal inkjet cartridges made by IUT. Under the settlement, Teco Europe has agreed to stop importing IUT inkjet cartridges and pay compensation to HP. HP's litigation against IUT continues. See, HP release.
2/16. The U.S. Court of Appeals (DCCir) issued its opinion in Eldred v. Reno, a case regarding the extent of Congressional authority to enact copyright laws. The 105th Congress passed the Copyright Term Extension Act (CTEA) to extend the maximum duration of copyrights from 75 to 95 years. The plaintiff is Eric Eldred, the proprietor of the unincorporated Eldritch Press, a website that republishes the works of others that are not protected by copyright. He is represented by a group of activist law professors -- Charles Nesson, Lawrence Lessig, and Jonathan Zittrain -- who disagree with certain Internet related intellectual property policies that have recently been enacted into law. They argue, among other things, that the CTEA is unconstitutional under the First Amendment and the Copyright Clause. The District Court upheld the CTEA, and the Court of Appeals affirmed.  Ginsburg wrote the opinion, in which Henderson joined. Sentelle dissented. See also, TLJ case summary.
2/16. The International Intellectual Property Alliance (IIPA) and the Business Software Alliance (BSA) submitted their annual recommendations [PDF] to U.S. Trade Representative (USTR) Robert Zoellick regarding placement of foreign countries on the Special 301 list. Section 301 is the statutory means by which the U.S. asserts its international trade rights, including its rights under WTO Agreements. In particular, under the "Special 301" provisions of the Trade Act of 1974, the USTR identifies trading partners that deny adequate and effective protection of intellectual property or deny fair and equitable market access to U.S. artists and industries that rely upon intellectual property protection. The report recommends Italy for the Watch List, and the Philippines for the Priority Watch List. See, BSA release. See also, Estimated Trade Losses due to Piracy [PDF] by country.
2/16. The U.S. Attorneys Office (SDNY) unsealed a criminal complaint against Elias and Alejandro Garay charging wire fraud for conducting a series of fraudulent Internet auctions via eBay, Yahoo, and Amazon. Defendants defrauded bidders of about  $113,982 by auctioning Playstation2 video consoles, collecting the winners' money, but not delivering the Playstation2s. Defendants were also arrested on Feb. 16. See, DOJ release.
2/16. An Erza Birnbaum filed a complaint [PDF] in U.S. District Court (EDNY) against Nortel Networks and three of its officers and directors alleging violation of U.S. securities laws. The plaintiff, who is represented by the law firm of Milberg Weiss, seeks class action status. Count I alleges violation of  10b of the Exchange Act, and Rule 10b-5 thereunder, by all defendants. Count II alleges violation of  20 of the Exchange Act by the individual defendants. Nortel Networks is a Canadian corporation based in Brampton, Ontario, that provides telecommunications and Internet services. Milberg Weiss is a San Diego based law firm that specializes in bringing class action securities suits against high tech companies when their stock prices drop. Nortel stock, which traded at over $80 per share last summer, closed at $20 on Friday, Feb. 16. Milberg Weiss has also recently sued AT&T, Deutsche Telekom, Covad, and PSINet.
2/16. A Thomas Grossman, and others, filed a complaint [PDF] in U.S. District Court (EDNY) against IBM alleging violation of international law, and unjust enrichment, in connection with allegations that IBM's German subsidiary provided punch card services to Nazis to perpetrate the holocaust. The Plaintiffs, who are represented by the law firm of Cohen Milstein, and other firms, seek class action status. Count I alleges violation of several international treaties. Count II alleges unjust enrichment. The complaint names as the sole defendant IBM Corporation. It does not name IBM's German subsidiary. IBM stated in a release that "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." The complaint alleges that "No statute of limitations has yet begun to run on plaintiffs' causes of action because plaintiffs and members of the class and the general public have been kept in ignorance of information essential to the pursuit of these claims ..." Cohen Millstein is a law firm that specializes in bringing class action lawsuits.
2/16. The FCC's WRC-03 Advisory Committee held its second meeting. The purpose of the meeting was to continue preparations for the 2003 World Radiocommunication Conference. The Committee released a schedule of meetings [PDF] of its informal working groups for February and March.
2/16. The U.S. Court of Appeals (5thCir) issued its opinion in City of Huntsville v. The Huntsville Item, a case regarding public access to government information. A local newspaper moved to intervene in an action in U.S. District Court to which the City of Huntsville, Texas, was a party. A Texas state statute provides that settlement agreement to which a governmental body is a party is public information. Upon a joint motion by the parties the District Court issued a confidentiality order limiting public access to the settlement documents in the case. The Court made no findings or explanation. The Huntsville Item moved to intervene and to set aside the secrecy order. The District Court denied the motion. The Court of Appeals reversed the denial of the motion to intervene, and vacated the confidentiality order. Judge Kennedy wrote that "While Texas law is not directly binding on a federal court's ability to issue orders, the Fifth Circuit has clearly held that, at a minimum, the district court was obliged to consider the effect of its order on state law." Judges DeMoss and Jones joined.

Go to News Briefs from February 11-15, 2001.


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