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News Briefs from February 26-28, 2001

3/5. The U.S. District Court (NDCal), Judge Patel presiding, issued its new preliminary injunction order in A&M Records v. Napster. This injunction provides that the copyright holders and Napster share responsibility for identifying infringing files, as directed by the opinion [PDF] of the U.S. Court of Appeals (9thCir) issued on February 12. The order states that "Napster is preliminarily enjoined ... from engaging in, or facilitating others in, copying, downloading, uploading, transmitting, or distributing copyrighted sound recordings in accordance with this Order." The order states that "Plaintiffs shall provide notice to Napster of their copyrighted sound recordings by providing for each work: (A) the title of the work; (B) the name of the featured recording artist performing the work ("artist name"); (C) the name(s) of one or more files available on the Napster system containing such work; and (D) a certification that plaintiffs own or control the rights allegedly infringed." Then "Once Napster "receives reasonable knowledge" from any source ... of specific infringing files containing copyrighted sound recordings, Napster shall, within three (3) business days, prevent such files from being included in the Napster index (thereby preventing access to the files corresponding to such names through the Napster system)." See also, statement by Napster CEO Hank Barry, statement by RIAA CEO Hillary Rosen, and Warner Music Group release.
3/5. Attorney General John Ashcroft appointed Lori Sharpe to be Director of Intergovernmental Affairs and Advisor to the Attorney General. Sharpe was previously Director of Congressional Affairs for the Senate at the CTIA. Prior to that she was Sen. Ashcroft's Deputy Chief of Staff, Legislative Counsel, and Legislative Assistant for commerce and transportation issues. See, release.
3/5. David Roesch plead guilty in U.S. District Court (SDCal) to one count of computer fraud in violation of 18 U.S.C. 1030(a)(4). Roesch used a computer to steal computerized customer telephone billing data from his employer, Worldxchange Communications. He then created a company which he used to bill many of the customers he identified from the stolen billing data. See, release.
3/5. Daniel Mummery joined the Palo Alto office of the law firm of Cooley Godward as a partner. He previously worked in the New York City office of Milbank Tweed, where he directed the global technology transactions group. See, release.
3/5. Hou Wu Ding plead guilty to structuring currency transactions, in violation of 31 U.S.C. 5324. He made a large number of currency deposits in amounts less than $10,000 into domestic financial institutions. Of those deposits, approximately $164,797 constituted the proceeds of sales of counterfeit computer software. See also, Feb. 15 information [PDF], plea agreement [PDF], and release.
3/5. House Majority Leader Dick Armey (R-TX) sent a letter to Secretary Tommy Thompson of the Department of Health and Human Services (HHS) asking him to suspend implementation of proposed medical privacy regulations drafted by the Clinton administration. He wrote: "The HIPAA regulations were drafted to address a concern that many Americans have that their personal medical records are not kept private. ... The proposed HIPAA regulations, however, may actually have the opposite effect, putting private personally identifiable information at greater risk than exists today. What has not been widely reported are the rule's new mandates requiring doctors, hospitals, and other health care providers to share patients' personal medical records with the federal government, sometimes without notice or advanced warning." See also, HIPAA.
3/5. The Supreme Court granted certiorari in Richard Mathias v. WorldCom, a case regarding the authority of federal courts to review state utility commission decisions regarding Section 252 interconnection agreements. See, opinion of the U.S. Court of Appeals (7thCir). The Supreme Court limited the issues on certiorari to:
  "1. Whether a state commission's action relating to the enforcement of a previously approved section 252 interconnection agreement is a "determination under [section 252]" and thus is reviewable in federal court under 47 U.S.C. 252(e)(6).
  2. Whether a state commission's acceptance of Congress' invitation to participate in implementing a federal regulatory scheme that provides that state commission determinations are reviewable in federal court constitutes a waiver of Eleventh Amendment immunity.
  3. Whether an official capacity action seeking prospective relief against state public utility commissioners for alleged ongoing violations of federal law in performing federal regulatory functions under the federal Telecommuncations Act of 1996 can be maintained under the Ex parte Young doctrine."
See, Order List [PDF], at pages 2-3.
3/5. EU officials are in Washington DC for trade meetings with U.S. officials and legislators. The EU's representatives include Anna Lindh (Foreign Minister of Sweden), Javier Solana (EU High Representative for the Common Foreign and Security Policy), and Chris Patten (EU Commissioner for External Relations). Sen. Chuck Grassley (R-IA), Chairman of the Senate Finance Committee, and other Committee members, met with Pascal Lamy (EU Trade Commissioner) on March 5. Lindh, Solana, and Patten will hold a press conference at 3:45 PM on March 6 at the National Press Club. See, EU release.
3/5. The SEC published in the Federal Register an advanced notice of proposed rulemaking on electronic reporting and recordkeeping and delayed effective date of recordkeeping provisions in the Electronic Signatures in Global and National Commerce (E-SIGN) Act of 2000. See, Federal Register, March 5, 2001, Vol. 66, No. 43, Pages 13273 - 13274.
3/5. The Department of Education published in the Federal Register a notice and request for comments regarding its development and implementation of a system to administer grants via the Internet. See, Federal Register, March 5, 2001, Vol. 66, No. 43, Pages 13381 - 13383.
3/5. The U.S. Court of Appeals (DC Cir) heard oral argument in Building Owners Managers Association v. FCC.
3/5. The U.S. Court of Appeals (FedCir) heard oral argument in Intergraph v. Intel,
3/5. The U.S. Court of Appeals (FedCir) heard oral argument in Tegal Corp. v. Tokyo Electron.
3/5. The Senate began its debate on S 220, the bankruptcy reform bill. The House passed its version of the bill, HR 333, last week.
3/5. The Business Software Alliance (BSA), a group that represents large U.S. software makers in copyright infringement matters, announced that it settled claims against eight California entities for a total of $512,000. The eight entities had on their computers unlicensed copies of software produced by Adobe, Autodesk, Macromedia, Microsoft, and Symantec. See, BSA release.
3/5. Deborah Kurtz and others filed a complaint [PDF] in U.S. District Court (CDCal) against Broadcom and three of its officers alleging violation of federal securities laws. Plaintiffs, who are represented by the law firm of Milberg Weiss and others, seek class action status. Count one alleges violation of  10b and Rule 10b-5 thereunder by all defendants (fraud). Count two alleges violation of  20(a) by the individual defendants (controlling person liability). Broadcom makes integrated circuits for broadband communications markets, including cable settop boxes, cable modems, high speed networking, DSL, and satellite transmission. Milberg Weiss is a law firm that specializes in bringing class action lawsuits against technology companies when their stock prices drop. Complaints seeking class action status have also recently been filed against Xerox (see, release by Cauley Geller), Verizon (see, release by Lowey Dannenberg), i2 Technologies (see, complaint [PDF] by Milberg), and Worldwide Xceed Group (see, complaint [PDF] by Milberg).
3/5. The Washington DC offices of the law firm of Latham & Watkins relocated to Lincoln Square (555 Eleventh Street, NW). See, release.
3/4. A WIPO Arbitration and Mediation Center panel issued its decision in AOL v. Miao-qua Wang. The petitioner, AOL, the online giant, has registered trademarks in The respondent is an individual residing in Beijing who registered the domain in August of 2000. He operates an online business. He asserted that aolbuys could mean "agent on line buys". Alternatively, he suggested that it could mean the Province of Anhui online. The one judge panel noted that Anhui is 800 kilometers from respondent's residence. The panel found that the is confusingly similar to AOL's trademarks, that respondent has no rights or legitimate interests in respect of the domain name, and that he registered it in bad faith. The panel ordered the domain transferred to AOL.
3/2. Acting SEC Chairman Laura Unger gave a speech in Washington DC in which she addressed regulation of financial portals. She stated that "Financial portals provide a central location where investors can find all types of financial information and portfolio analysis tools. They can aggregate their financial account data, and they can also click on hyperlinks to broker-dealer websites to open brokerage accounts and enter trades. ... But as portals have gained in popularity, with Yahoo! Finance and other financial portals becoming household words, broker-dealers are increasingly finding themselves competing with the financial portals for customers. At least one of the questions broker-dealers ask is why aren't the portals registered? My first question, though, is: what are the portals doing? What are their relationships with the broker-dealers they hyperlink to? What are their business arrangements and compensation arrangements? How do the hyperlinks work, and what do they look like? We're all familiar with the various factors considered in analyzing whether an entity must register as a broker-dealer. But these are difficult questions with broad-ranging implications. ... I'm in the process of organizing a roundtable to discuss some of these issues in April."
3/2. SEC Commissioner Isaac Hunt gave a speech in Washington DC in which he suggested re-examination of the subject of online communications made during a public offering, especially during the waiting period. He stated that the "Internet provides a mechanism that would allow investors and companies to get together on a non-selective basis to discuss a company's public offering. It is my hope that the Commission will find a way to allow companies and investors to take greater advantage of the Internet and thus ... transform the waiting period into the education period."
3/2. FTC Chairman Robert Pitofsky gave a speech at the University of California at Berkeley titled "Antitrust and Intellectual Property: Unresolved Issues at the Heart of the New Economy." He began that it is "unduly simplistic to conclude, as some have urged, that because of differences, antitrust enforcement has little or no role to play when it comes to market power based on intellectual property." He continued that antitrust regulation is "sufficiently flexible that it can play a useful role in the New Economy." He then reviewed several of the major FTC proceedings involving intellectual property. Finally, he conceded that government regulators have limitations in this area. He said that "law enforcement can rarely equal the speed of economic change in high-tech sectors." He also stated that "Antitrust enforcement has often faced the challenge of dealing with complicated technological questions ... Few government enforcement officials, administrators or judges have sufficient technical competence to deal directly with those issues ..."
3/2. The U.S. District Court (NDCal), Judge Marilyn Patel presiding, held a hearing in A&M Records v. Napster. On Feb. 12 the U.S. Court of Appeals (9thCir) issued its opinion [PDF] largely upholding Judge Patel's findings regarding copyright infringement by Napster, and remanded the case to her to fashion injunctive relief consistent with its opinion. Napster stated that if the record companies would provide it with the titles of copyrighted works, the names of the recording artists, the names of Napster's files, and certifications that the record companies own the works, then Napster would then exclude those files from the Napster index. Judge Patel took the matter under advisement. See also, statement by RIAA CEO Hillary Rosen, Napster release, and statement of Napster CEO Hank Barry.
3/2. The U.S. Court of Appeals (DCCir) issued its opinion in Time Warner Entertainment v. FCC. AT&T and Time Warner petitioned for review of the FCC's cable ownership rules on First Amendment grounds. The FCC's horizontal rule imposes a 30% limit on the number of subscribers that may be served by a multiple cable system operator. Its vertical limit is set at 40% of channel capacity, reserving 60% for programming by non-affiliated firms. The three judge panel reversed and remanded both the horizontal and vertical limits. The Court followed the Supreme Court's ruling in Turner Broadcasting I that cable operators are "entitled to the protection of the speech and press provisions of the First Amendment." The court, applying the intermediate scrutiny standard, then held that the "horizontal limit interferes with petitioners' speech rights by restricting the number of viewers to whom they can speak. The vertical limit restricts their ability to exercise their editorial control over a portion of the content they transmit." Gene Kimmelman, Director of Consumers Union, called the decision "an enormous loss and a devastating blow to consumers". See, CU release.
3/2. The U.S. Court of Appeals (1stCir) issued its opinion in Ostler v. Codman Research Group, a case regarding application of Delaware law to the exercise of stock options at a New Hampshire software company.
3/2. Rep. James Greenwood (R-PA), Chairman of the House Commerce Committee's Oversight and Investigations Subcommittee, sent letters on critical information systems and data security to the heads of fifteen federal agencies "to request information necessary to assess the adequacy of efforts by your agency to ensure that critical information systems and data are secure from loss, unauthorized access, misuse, or destruction."
3/2. The European Commission announced that it will open a full investigation into the proposed merger between U.S. companies General Electric and Honeywell. See, release.
3/2.  The FCC's Wireless Telecommunications Bureau division chiefs spoke at a FCBA luncheon.
3/2. CyberCash filed a Chapter 11 bankruptcy petition in U.S. Bankruptcy Court (DDel). CyberCash provides electronic payment technologies and services. CyberCash also announced that it has "entered into an asset purchase agreement under which Network 1 Financial will acquire all of CyberCash's operating assets." See, release.
3/1. The SEC announced 11 enforcement actions against 23 companies and individuals that used the Internet to defraud investors. The frauds were accomplished by a variety of online means, including "spam" emails, electronic newsletters, websites, hyperlinks, message boards and other Internet media. See, SEC release.
3/1. Rep. Mike Bilirakis (R-FL) introduced HR 817, a bill pertaining to the availability of spectrum for amateur radio operators. It was referred to the House Commerce Committee, of which he is a member.
3/1. Sen. Hillary Clinton (D-NY) introduced seven bills in the Senate (S 426 through S 432) which she said would  "help bring all of New York online and into the new economy by promoting entrepreneurship and innovation, and by knocking down some of the stubborn barriers to economic progress." They are a collection of proposals to create grants, loans, tax credits, and other government spending programs. The seven bills could have been included in one or several bills.
3/1. Sen. Clinton's S 426, the Technology Bond Initiative of 2001, would provide an income tax credit to holders of bonds financing new communications technologies. S 428, the Broadband Expansion Grant Initiative of 2001, would provide government grants and loans "to facilitate the deployment by the private sector of broadband telecommunications networks and capabilities (including wireless and satellite networks and capabilities) to underserved rural areas." S 429, the Technology Extension Act of 2001, would provide government grants for the "support of regional centers for the commercial use of advanced technologies by small businesses and medium-sized businesses." S 430, the Broadband Rural Research Investment Act of 2001, would authorize a study by NIST. S 431 would authorize job skills grants. S 432 would provide grants for "business incubator services." See also, speech in Senate by Sen. Clinton.
3/1. Sen. Clinton also endorsed S 41, sponsored by Sen. Orrin Hatch (R-UT) and Sen. Max Baucus (D-MT). The bill would make permanent the research and development tax credit.
3/1. Sen. Bill Nelson (D-FL) introduced two privacy related bills in the Senate. S 450 would amend the Gramm Leach Bliley Act to provide for enhanced protection of nonpublic personal information, including health information. S 451 would establish civil and criminal penalties for the sale or purchase of a social security number.
3/1. David Emmons and Craig Adams joined the Dallas office of the law firm of Baker & Botts as partners in corporate/securities section. They had been partners in the Dallas office of Thompson & Knight. Both concentrate on corporate and securities matters, including mergers, acquisitions, and other transactions involving technology companies. See, release.
3/1. Sen. John Kerry (D-MA) and Robert Atkinson of the Technology and the New Economy Project at the Progressive Policy Institute (PPI) published an opinion piece in the PPI web site titled "E-Commerce Is Seen As Threat To Slow Middlemen". They wrote that "Middlemen whose personal agenda is threatened by technology should not be able to pull every judicial, regulatory, and legislative lever in the system merely to thwart their e-commerce competitors. Yet that's happening, and the pace of resistance will only accelerate as more industries fight in more states, in Congress and in the courts for protectionist legislation and regulations."
3/1. The House passed HR 333, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2001, by a vote of 306-108. See, Roll Call No. 25. The House agreed to a privacy related amendment [PDF] offered by Rep. Mark Green (R-WI). It requires the removal of the names of children from bankruptcy filings. The Senate version of bankruptcy reform legislation, S 220, was adopted by the Senate Judiciary Committee on Feb. 28.
3/1. The Senate Commerce Committee held a hearing on the transition from analog to digital TV. Committee Chairman John McCain (R-AZ) said in his opening statement that "the government decided that the broadcasters could keep their old analog spectrum a gift from the past until 2006, or until 85 % of American homes had digital TV. ... But this much is clear, by 2006, this country will have neither the transmission facilities, nor the digital content, nor the reception equipment needed to ensure that 85% of the population will be able to receive digital television as their exclusive source of television." See also, statements of witnesses: Jeff Sagansky (Paxson Communications), Ben Tucker (Fisher Broadcasting), Michael Willner (Insight Communications), Mark Cooper (Consumer Federation of America), James Gattuso (Competitive Enterprise Institute), Joseph Kraemer (LECG), and Tom Hazlett (American Enterprise Institute).
3/1. The House Commerce Committee's newly organized Subcommittee on Commerce, Trade and Consumer Protection held a hearing on Privacy in the Commercial World. Subcommittee Chairman Cliff Stearns (R-FL) presided. Subcommittee members expressed the views during the first 45 minutes of the hearing. "In addressing privacy we must be mindful of the First Amendment," said Rep. Stearns. "The testimony also informs us of the tremendous benefits that have accrued to our economy and the American consumer from a tradition of free flow of information within the commercial context." Full Committee Chairman Billy Tauzin (R-LA) said that "one thing that I don't want to do at the end of the day, no matter what develops from this Subcommittee, is hand the bulk of the work over to regulators." Ranking Democrat John Dingell (D-MI) said that "individuals must have the power to control how, when, and with whom their personal information is shared. ... government must establish the baseline standards and enforcement procedures ..."
3/1. The privacy hearing included a panel of six law professors and legal experts who addressed the history of privacy laws, and offered their legal analyses of, and opinions as to the constitutionality of, various privacy proposals. The witness who attracted the most attention and questions from the subcommittee members was Eugene Volokh, a UCLA law professor. He praised privacy principles that are based upon contractual agreements. However, he argued that when the government imposes mandates that go beyond contract enforcement, it can violate free speech principles. "The First Amendment is our code of fair information practices," said Volokh. "The difficulty is that the right to information privacy -- my right to control your communication of personally identifiable information about me -- is a right to have the government stop you from speaking about me."
3/1. Rep. Ed Markey (D-MA) called for broad federal privacy legislation in his opening statement at the privacy hearing. Later, he offered a comparison of intellectual property and privacy rights. "So we kind of have this duality, you know. On the one hand you got industry coming to us saying, 'We need more copyright protection -- on our information. Don't let anyone disclose it. IT WOULD BE TERRIBLE IF ANYONE TOOK OUR INFORMATION AND SOLD IT!' You know. Thinking of Napster. You know. 'That Napster is going to ruin us.' You know. But, when the individual says, 'Oh, by the way, I want a copyright on my own personality.' You know. 'But, we can't do that,' says the very same industry. 'You're not entitled to copyright. That's different. But, don't let them take mine.' The industry comes in here and they say 'You have got to have the top notch number one encryption technology available to everyone. Security all the way. ... But, once I get the information you shouldn't have any privacy.' ... So, there is a duality here. The industry says, 'copyright good ... privacy bad'. ... The paradox is quite obvious."
3/1. RIAA CEO Hillary Rosen gave a speech on the Internet, music recordings, and copyright law.
3/1. The U.S. Court of Appeals (FedCir) issued its opinion in Intergraph v. Intel, reversing the District Court judgment that Intel had licensed Intergraph's Clipper patents. Intergraph appealed the decision of the U.S. District Court (NDAla) granting summary judgment that Intel is licensed to practice the inventions of Intergraph's U.S. Patents Nos. 4,860,192, 4,884,197, 4,933,835, and 5,091,846 (also known as the Clipper patents), and dismissing Intergraph's claims for patent infringement. The Appeal Court reversed, holding that Intel is not licensed under these patents.
3/1. The U.S. Court of Appeals (2ndCir) issued its opinion in TCPIP v. Haar Communications, reversing in part an injunction in a domain name dispute. TCPIP has operated a chain of children's clothing stores under the registered mark, "The Children's Place," for 30 years. In 1996, TCPIP registered two domain names, "" and "," which can be used to access to its online store. Haar Communications, and its sole employee, Richard Haar, then registered the domain domain "" and other domain names containing the words "children" and "place". TCPIP demanded that Haar transfer these domain names to TCPIP. Haar made several offers to sell packages of domain names to TCPIP for $570,000, $697,000, and $480,000. TCPIP filed a complaint in U.S. District Court (SDNY). The District Court preliminarily enjoined Haar from using 81 domain names. It held that these names were likely to dilute TCPIP's trademark and service mark, "The Children's Place," in violation of the Federal Trademark Anti-Dilution Act (FTDA), and to infringe plaintiff's mark in violation of Section 43(a) of the Lanham Act. The Appeals Court vacated the injunction as to the FTDA on the basis that the mark "The Children's Place" lacked either sufficient inherent distinctiveness or sufficient fame to qualify for the protection of the FTDA. The Appeals Court affirmed the injunction as to the Lanham Act for domain names which caused a likelihood of confusion, but reversed as to others.
3/1. Intel announced that all necessary U.S. and German antitrust clearances have been obtained regarding Intel's proposed acquisition of Xircom. See, Intel release. Xircom makes PC cards and other products used to connect mobile computing devices to corporate networks and the Internet. The two companies announced the merger in January. See, Xircom release of Jan. 15.
3/1. The ICANN published in its web site a request for public comments on proposed revisions to its registry agreements with VeriSign, formerly Network Solutions. See also, VeriSign release.
3/1. President Bush announced his intent to nominate Viet Dinh to be Assistant Attorney General for Legal Policy. Dinh is currently a professor at Georgetown University Law School. See, release.
3/1. The Department of Commerce's Bureau of Export Administration held a one day workshop titled "Essentials of Export Controls Workshop". For more information contact the Division of Outreach and Educational Services: 202-482-6031 or

Go to News Briefs from February 26-28.


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