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Tech Law Journal |
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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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3/30. Reps. Billy Tauzin (R-LA), John Dingell (D-MI), Fred Upton (R-MI), and Ed Markey (D-MA) sent a letter to Commerce Sec. Donald Evans regarding Commerce Department's role in reviewing the recently announced renegotiation of a 1999 contract between VeriSign and the ICANN. The four, who are the Chairman and Ranking Members of the Commerce Committee and its Telecom Subcommittee, respectively, stated that they want "a competitive and transparent domain name system." 3/30. Laura Unger, Acting Chairman of the SEC, gave a speech to the Philadelphia Bar Association titled "Protecting the Integrity of Financial Information in Today's Marketplace." She addressed the integrity of investment advice; she stated that "Online suitability is an especially important concern in today's markets as technology developments lead firms to offer a wider array of investment related tools and information." Next, she addressed the integrity of investment information available online; she said that "the Internet has also afforded easy access to fraudsters looking to hoodwink investors", such as "Tokyo Joe". She added that "I have asked the Enforcement Division to be especially watchful for online stock-picking sites." She also addressed the integrity of financial information and the integrity of fund performance advertising. 3/30. European Commissioner Mario Monti gave a speech in Washington DC to the Institute for International Economics titled "EU-US Cooperation in the Control of International Mergers -- Recent Examples and Trends." 3/30. The Immigration and Naturalization Service (INS) published a notice in the Federal Register that, effective April 13, 2001, the INS will only accept the December 18, 2000, version of Form I-129W, titled "H-1B Data Collection and Filing Fee Exemption." Prior editions of the form will not be accepted. H1B visas enable technology companies to hire aliens in positions for which there is a shortage of U.S. workers. See, Federal Register, March 30, 2001, Vol. 66, No. 62, at Page 17442. 3/30. The FCC and NTIA, which have spectrum allocation authority in the U.S., released reports which relate the difficulty of locating and reallocating spectrum for Third Generation (3G) wireless services. 3G is intended to bring broadband Internet access to portable devices, but needs spectrum allocated for its use. The reports address two spectrum bands identified by the International Telecommunication Union (ITU) 2000 World Radiocommunication Conference (WRC-2000) for possible 3G use. The reports address the 1710 to 1885 MHz band, which is currently being used by federal agencies, especially the Department of Defense, and which is subject to NTIA jurisdiction, and the 2500 to 2690 MHz band, which is currently being used for MMDS and ITFS, and which is subject to FCC jurisdiction. The reports detail incumbent users and their uses, and technical difficulties associated with sharing and segmenting spectrum, and the difficulties and costs of relocating incumbent users. The FCC released its report [101 pages in PDF] titled "Final Report: March 30, 2001: Spectrum Study of the 2500-2690 MHz Band: The Potential for Accommodating Third Generation Mobile Systems". See also, executive summary. This report states that "The MDS industry has invested several billion dollars to develop broadband fixed wireless data systems in this band, including high-speed access to the Internet. These systems offer a significant opportunity for further competition with cable and digital subscriber line (DSL) services in the provision of broadband services in urban and rural areas. The band is used to provide video services for education and training in schools, health care centers and a wide variety of other institutions, as well as for the provision of a commercial video distribution service known as wireless cable." The report concludes that this spectrum is already heavily licensed throughout the country, that it would be technical difficult to segment or share the spectrum, and that relocation could cost between $10.2 and 30.4 Billion. See also, FCC release. (ET Docket No. 00-258.) The NTIA released a report [169 pages in PDF] titled "The Potential for Accommodating Third Generation Mobile Systems in the 1710–1850 MHz Band: Federal Operations, Relocation Costs, and Operational Impacts". See also, executive summary. The major user is the Defense Department. The 1755-1850 MHz is used for tracking, telemetry, and commanding for space systems; medium-capacity, conventional fixed microwave communications systems; military tactical radio relay systems; air combat training systems; precision guided munitions; high resolution airborne video data links; and land mobile video functions such as robotics, and surveillance. The report concludes that there are significant obstacles to use of spectrum in this band by 3G services. For example, with respect to satellite control, the report concludes that "This function could not be completely relocated until all satellites using this band have expired, which could be as late as 2030." See also, NTIA release. The Department of Defense released a separate report [328 pages in PDF] titled "Department of Defense Investigation of the Feasibility of Accommodating the International Mobile Telecommunications (IMT) 2000 Within the 1755-1850 MHz Band". Similarly, the Air Force re-released a report [14 pages in PDF] titled "Case Study: Impact Assessment on Precision Strike Weapon Data Link Systems to Accomodate IMT 2000: 5 January 2001: Prepared By Eglin AFB, Florida." Currently, spectrum is a national resource that is allocated by license by the federal government, "in the public interest." The 3G wireless industry is arguing with the military before the NTIA over who will use spectrum in one band; it is arguing with private sector ITFS and MDS users before the FCC over who will use spectrum in another band. Commissioner Furchtgott-Roth, the FCC's free market proponent, released a statement in which he argued that part of the problem is that the government is making spectrum allocation decisions. He wrote: "Government intervention is not required in order for spectrum to flow to its highest valued uses. A fully functioning secondary market would achieve this goal. When government intervenes to impose its own view of the highest valued use of spectrum, there is a significant risk that government will get it exactly wrong. Ultimately we must have faith that the marketplace is the best mechanism to chose among commercial applications for spectrum." The Catholic Television Network, which is a major incumbent ITFS operator, stated that "it should be recognized that there are other options for 3G wireless, including existing cellular spectrum. Also, as recognized by the FCC, it is important to determine whether the cellular industry truly needs more spectrum, or whether it can operate more efficiently and use its existing spectrum for 3G services." Also, a collection of educational institutions and groups wrote to Secretary of Commerce Donald Evans, asking for his "direct and personal involvement" to "assure that educators maintain their critically needed ITFS spectrum allocation. Accommodation of new 3G mobile services offered by cellular companies must not come at the expense of our students, teachers and communities." The NTIA is a part of the Commerce Department. They also wrote a similar letter to Education Secretary Rod Paige. The Telecommunications Industry Association (TIA) issued a release in which it conceded that "both reports conclude that substantial challenges lie ahead in any efforts to accommodate 3G systems in the bands studied." In addition, TIA President Matthew Flanigan stated that "we do not necessarily agree with all of NTIA's conclusions in this report." 3/30. The USTR released a report titled "The 2001 National Trade Estimate Report on Foreign Trade Barriers." See, State Department release. 3/30. WTO Director General Mike Moore gave a speech in Moscow on Russia's request to join the WTO. He stated that "The WTO will not be a truly World Trade Organization until Russia, and other acceding countries, take their rightful place at our table." He also said that "entry into the WTO requires that the applicant government undertake legally binding commitments that have an impact upon a wide range of sectors." In particular, "Members too are keen to see the improvement of implementing legislation in critical areas such as ... TRIPS." 3/30. Hewlett-Packard announced that it resolved its dispute with Gotan Hsu SA over packaging for thermal inkjet cartridges in Spain. Under the settlement, Gotan has agreed to cease sales of the disputed packaging. See, HP release. 3/30. Rep. James Sensenbrenner (R-WI) introduced HR 1329, a bill to make permanent the research and development tax credit. It was referred to the House Ways and Means Committee. 3/30. The Canadian business and technology law firm of Gowlings and the Calgary based law firm of Ballem MacInnes voted to merge, effective May 1, 2001. The merged firm will have almost 600 lawyers and patent and trademark agents in seven Canadian cities and Moscow, Russia. It will continue to be known as Gowlings. See, release. 3/30. The GAO released a report [PDF] titled "Information Security: Progress and Challenges to an Effective Defense-wide Information Assurance Program." 3/29. The House Commerce Committee's Subcommittee on Telecommunications and the Internet held a hearing titled FCC Chairman Michael Powell: Agenda and Plans for Reform of the FCC. The new FCC Chairman, Michael Powell, was the sole witness at the lengthy event. See, prepared statement [PDF] of Powell. He promised to reduce FCC backlogs, harmonize regulation across industries, facilitate broadband deployment, pursue universal service goals, build the technical expertise of the FCC, resist regulatory intervention, and increasingly use enforcement proceedings. Subcommittee members widely praised Powell, and questioned him a a variety of issues, including Section 271 proceedings, broadband deployment, e-rate subsidies, broadcast and cable ownership caps, FCC backlogs and delays, universal service, Internet protocol telephony, third generation wireless services, and transition to digital television. See also, prepared statement by Rep. Billy Tauzin (R-LA). See, fuller coverage in Monday edition of TLJ Daily E-Mail Alert. 3/29. Rep. Billy Tauzin (R-LA), the Chairman of the House Commerce Committee, and Rep. James Sensenbrenner (R-WI), the Chairman of the House Judiciary Committee, met with stakeholders in the debate over legislation to provide intellectual property like protection for databases. The two seek to develop consensus database protection legislation. In the past, as the Commerce and Judiciary Committees fought over both policy and jurisdiction on this issue, no bill became law. Databases are accorded little protection, as a result of the Supreme Court's decision in the Feist case. Businesses that own or produce compilations of data have lobbied for protection, and found support from the Judiciary Committee, which has jurisdiction over intellectual property matters. Rep. Howard Coble (R-NC), the Chairman of the House Courts, Internet, and Intellectual Property Subcommittee, has been trying to pass a bill for years. He sponsored HR 2652 in the 105th Congress (1997-1998); it ultimately passed the House, but not the Senate. He sponsored a similar bill in the 106th (1999-2000), HR 354, which passed the Judiciary Committee. Meanwhile, some Internet companies, telecom companies, and educational institutions lobbied against creating protections for databases, and found support from the Commerce Committee. Former Rep. Tom Bliley (R-VA) introduced bill in the 106th Congress, HR 1858, which provided very weak protections for database owners. It passed the Commerce Committee. See, summary of database bills in the 106th Congress. Reps. Tauzin and Sensenbrenner, who both became chairmen of their committees in January, seek to end the conflict between their two committees. Sensenbrenner stated that "in the past, the two committees have taken decidedly different approaches to the database protection issue, and as a result, nothing has become law. Both Chairman Tauzin and I are committed to getting a database protection bill the President will sign passed by the Congress this year." Tauzin added that in the past "Judiciary used its traditional perspectives of copyright law in approaching the problem. Commerce, now Energy and Commerce, used its traditional communications law perspective as we approached the problem, which inevitably lead to bills that couldn't jive. But, the idea here is for us to find a common approach, so that we don't end up with two committees producing bills that cannot be married together, and compromise one another in the end. And by starting out together, we hope to finish up together." The two also suggested that they hope to see cooperation between the two committees on other law and technology issues. See, transcript of press conference. 3/29. The House Ways and Means Committee's Trade Subcommittee held a hearing titled Is the United States Losing Ground as Its Trading Partners Move Ahead? See, prepared statements of Rep. Phil Crane (R-IL), Rep. Sander Levin (D-MI), Thomas Donohue (P/CEO of the U.S. Chamber of Commerce), Harold McGraw (CEO of McGraw-Hill), Samuel Maury (Pres. of the Business Roundtable), William Weiller (Ch/CEO of Purafil), Daniel Tarullo (Prof. at Georgetown Univ. Law Center), John McCarter (P/CEO of the Council of the Americas), Harold Wiens (EVP of 3M), Jeffrey Schott (Institute for International Economics), John Hardin (National Pork Producers Council), and Donald Burke (VP of Mead Corp.) 3/29. USTR Robert Zoellick addressed the House Policy Committee on the administration's trade agenda. This committee, which is chaired by Rep. Chris Cox (R-CA), is a Republican forum for the discussion of specific legislative initiatives, for the enunciation of official priorities, and for the resolution of inter-jurisdictional policy disputes. 3/29. The law firm of Cohen Milstein announced the dismissal of complaint filed in U.S. District Court seeking class action status against IBM alleging involvement in the Nazi holocaust. See, release. See also, IBM's release of Feb. 15. 3/29. The U.S. District Court (SNDY) dismissed all pending federal privacy suits against Internet advertising company DoubleClick. Multiple federal privacy suits against DoubleClick were consolidated into one action, Healy v. DoubleClick. The plaintiffs alleged that DoubleClick's practice of using cookies in connection with online advertising violated three federal statutes: the Electronic Privacy Act, the Wiretap Act, and the Computer Fraud and Abuse Act. The District Court ruled that plaintiffs failed to state a claim. However, related actions in state courts are still pending against DoubleClick. The law firm of Morrison & Foerster represents DoubleClick in these proceedings. The law firm of Bernstein Litowitz is co-lead counsel for plaintiffs. See also, DoubleClick release. 3/29. The Senate Finance Committee held a hearing on the nominations of Kenneth Dam to be Deputy Secretary of the Treasury, David Aufhauser to be General Counsel of the Department of the Treasury, Michele Davis of Virginia to be an Assistant Secretary of the Treasury, and Faryar Shirzad to be an Assistant Secretary of Commerce. Sen. Charles Grassley (R-IA), Chairman of the Committee, said "I believe all four of these nominees are well-qualified for their positions". See, Grassley statement [PDF]. The Committee has not yet voted on these nominations. 3/29. The PRC's Xinhua stated that "The Shanghai Intellectual Property Agency, funded by the local government, will begin business ... The opening of the agency is a step Shanghai has taken to improve intellectual property protection for China's foreseeable accession into the World Trade Organization ..." See, release. 3/29. EU Competition Commissioner Mario Monti is in Washington DC to meet with his counterparts in the U.S. government to discuss antitrust enforcement. Monti also gave an address at the spring meeting of the American Bar Association titled "EU Views on a Global Competition Forum." Monti will hold a press conference on March 30 at 11.00 AM at the European Commission’s Washington Delegation, 2300 M Street, NW, Press Room. See also, EU release. 3/29. The GAO released a report [PDF] titled "Information Security: Challenges to Improving DOD's Incident Response Capabilities". The Department of Defense (DOD) has established organizations, known as computer incident response capabilities, that engage in activities associated with preventing, detecting, and responding to cyber attacks on the DOD's information systems and communications networks for critical combat and business operations that are interconnected through the public telecommunications infrastructure and the Internet. The report offers recommendations for improving the DOD's cyber attack response capabilities. Rep. Bob Stump (R-AZ), Chairman of the House Armed Services Committee, requested the report. 3/29. Ernest Gonzales was indicted by a grand jury of the U.S. District Court (CDCal) on one count of publishing an advertisement to receive, exchange and distribute child pormography (CP), four counts of using a computer to knowingly transport CP in interstate and foreign commerce, and one count or possession of CP images. The German National Police conducted an Internet based investigation, and then forwarded their findings to the U.S. Customs Service, which then investigated Gonzales. It executed a search warrant at Gonzales' home, and seized computer equipment. See, release. 3/29. The U.S. Court of Appeals (4thCir) issued its opinion in Drews v. Silicon Gaming, a case regarding construction of an arbitration provision in a distribution contract between the manufacturer and distributor of video gambling machines. 3/29. The Court of Appeal of California (2ndAppDist) issued its opinion [PDF] in Lomes v. Hartford Insurance, a case regarding an insurer's duties to defend and indemnify. Scott Lomes and William Low were the sole shareholders of Newton Wholesale Co., a grocery business that developed software to track inventory and evaluate prices. The two quarreled, and Low ousted Lomes as an employee and officer. However, Lomes remained a director and minority shareholder. Lomes then filed a complaint against Low in U.S. District Court, alleging several claims, including copyright infringement involving the software he and Low had developed. Lomes registered a copyright for the program after being fired. Both Low and Lomes demanded that Hartford defend and indemnify them. Hartford declined to defend or indemnify Lomes. He then filed a complaint in the Superior Court of Los Angeles County against Hartford alleging breach of contract, bad faith, and declaratory relief regarding the duty to defend and indemnify. The trial court held that there was a duty to defend, and dismissed all other claims. Both sides appealed. The Appeals Court held that there was no duty to defend. 3/29. The Annenberg Public Policy Center released a report [PDF] titled "Privacy Policies on Children’s Websites: Do They Play By the Rules?" by Joseph Turow. It concluded that 10% of children’s sites collected personal information from visitors but did not have a privacy policy link on their home pages, in violation of the Children's Online Privacy Protection Act. It also concluded that many privacy policies are too complex. 3/29. Cypress Semiconductor filed a complaint in U.S. District Court (DDel) against Integrated Circuit Systems alleging patent infringement. 3/29. The FTC published a notice in the Federal Register that it will hold a public workshop on May 7 and 8, 2001, to examine competition policy issues that arise in connection with business to business (B2B) and business to consumer (B2C) electronic commerce. The FTC had previously published notice of the workshop in its web site. See release. See, Federal Register, March 29, 2001, Vol. 66, No. 61, at Pages 17177 - 17179. 3/29. The SEC filed a civil complaint in U.S. District Court (DDC) against Sean St. Heart alleging violation of § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder for engaging in a cyber smear by posting a false message about NCO Group, Inc. on the Yahoo! Finance Internet message board. St. Heart's fraudulent message caused NCO's market capitalization to drop by over $200 Million. Also on March 29, St. Heart consented to entry of judgment against him. See, SEC release. 3/28. Verizon Wireless filed with the FCC an Emergency Petition to Defer Action on Applications [PDF] requesting that the FCC defer the granting of pending applications by MDS and ITFS licensees for modification of existing facilities to provide two way operations. The Wireless Communications Association promptly filed a response [PDF] with the FCC in which it stated that Verizon's petition is an "outrageous and unprecedented attempt to delay the deployment of broadband wireless services that will compete against Verizon’s own DSL offerings ..." 3/28. The FCC and the Department of Justice filed an amicus curiae brief with the U.S. Court of Appeals (11thCir) in support of Intermedia in Intermedia Communications v. BellSouth. Intermedia seeks to provide local phone service in regions served by BellSouth, and to do so, it interconnnects with BellSouth's telephone network. Intermedia filed a complaint in U.S. District Court (MDFl) against BellSouth. It alleged, among other things, that BellSouth's conduct constituted monopolization and attempted monopolization in violation of § 2 of the Sherman Act. The District Court dismissed the antitrust claims, stating that "most of the allegations that serve as a basis for the antitrust claims involve violations of the [Telecom Act] ..." and "violations of the [Telecom Act] do not automatically serve as a basis for an antitrust claim." The FCC and DOJ argue that the Telecom Act of 1996 does not create any implied antitrust immunity. 3/28. Sen. Max Baucus (D-MT) introduced S 643, a bill to implement the U.S. Jordan Free Trade Agreement. It was referred to the Senate Finance Committee. 3/28. Rep. Vern Ehlers (R-MI) introduced HR 1259, a bill to amend the National Institute of Standards and Technology Act to enhance the ability of the NIST to improve computer security. 3/28. Rep. Phil Crane (R-IL) introduced HR 1268, a bill to amend the Internal Revenue Code of 1986 to include wireless telecommunications equipment in the definition of qualified technological equipment for purposes of determining the depreciation treatment of such equipment. The bill was referred to the House Ways and Means Committee. Sen. Fred Thompson (R-TN) introduced S 640, the companion bill to HR 1268. It was referred to the Senate Finance Committee. 3/28. The Supreme Court of the U.S. heard oral argument in NYT v. Tasini, a case regarding the application of copyright law to the republication of the articles of free lance writers in electronic databases. The plaintiffs are free lance authors whose articles were previously published in periodicals. The defendants are publishers and owners of electronic databases which have republished their articles in electronic form. Plaintiffs filed a complaint in U.S. District Court (SDNY) in 1993 alleging copyright infringment. U.S. District Court Judge Sonia Sotomayor issued her Opinion in 1997 holding that defendants are protected by the privilege afforded the publishers of "collective works" under Section 201(c) of the Copyright Act. The U.S. Court of Appeals (2ndCir) issued its Opinion reversing the District Court on Sept. 24, 1999. 3/28. The House Commerce Committee amended and adopted HR 718, the Unsolicited Commercial Electronic Mail Act of 2001, sponsored by Rep. Heather Wilson (R-NM) and Rep. Gene Green (D-TX). The Committee adopted by a voice voice, without opposition, an amendment in the nature of a substitute offered by Rep. Wilson. The Committee then adopted the bill, as amended, by voice vote without opposition. This latest version of the bill includes new language defining how the bill affects businesses with multiple subsidiaries and affiliates, refining the provision allowing ISPs to sue spammers by defining the criteria that must be met in order for an ISP to file a lawsuit, and requiring that awards in suits brought by state attorneys general (AGs) go to injured consumers. Rep. Chris Cox (R-CA) had argued at the Telecom Subcommittee mark up session on March 21 that there should be no parens patriae cause of action by state AGs. The compromise embodied in the amendment adopted on March 28 is to maintain the state AG right of action, but to require that all "monetary amounts recovered or received by settlement or judgment ... shall be paid directly to the persons who incurred losses ... and no such amounts may be retained by the State or may be used directly or indirectly to offset the cost of such litigation." Rep. John Dingell (D-MI) , Rep. Al Wynn (D-MD), and Rep. Bart Stupak (D-MI) spoke in support of the bill, but in opposition to this limitation on state AGs. Rep. Stupak also criticized the bill's language barring class action suits. Rep. Chip Pickering (R-MS), who is also a Co-Chair of the Congressional Wireless Caucus, argued that "a wireless carrier that offers short message service" (i.e., SMS on pagers and cell phones) should be encompassed within the bill's definition of "Internet access service." That is, he wants SMS to qualify for the bill's language granting ISPs limitations on liability and private rights of action. Rep. Green stated that "it is not our intent to include those in this bill." Rep. Wilson added that those are wireless technologies that should be addressed under common carrier law, not a spam bill. Rep. Ed Markey (D-MA) expressed concern that the bill's language giving ISPs immunity for blocking e-mail also gives ISPs license to block legitimate e-mail. He stated that "ISPs typically block bulk e-mail transmissions, and do not ordinarily ascertain whether such bulk e-mail represents legitimate commercial correspondence, unsolicited commercial messages, or, as is often the case, both such types of messages. My concern is that the bill may unwittingly authorize certain discriminatory anticompetitive practices in online commerce. ISPs may develop discriminatory practices with the delivery of e-mail, and then obtain liability protection for policies, if they can be said to have undertaken in good faith to block spam. ... A situation that the bill does not address is if a business, a legitimate business, operating online, sends a mass mailing to its own customers, having jumped through such hurdles, and then finds that an ISP has decided to block delivery. I believe we need to have a broader discussion in this Committee about the repercussions of leaving the delivery of legitimate commercial correspondence at the mercy of an ISP, especially in those cases where such correspondence may be from competitors of that ISP, its affiliates, or joint venture partners." The House Judiciary Committee also has jurisdiction over this bill. Meanwhile, on March 27, Sen. Conrad Burns (R-MT), the Chairman of the Senate Communications Subcommittee, introduced S 630, the CAN SPAM Act. 3/28. The U.S. Court of Appeals (4thCir) issued its opinion in Microstrategy v. Motorola, a trademark case involving the phrase "Intelligence Everywhere." After conducting various trademark searches which turned up no conflicting trademark uses, Motorola began a global branding campaign based on the phrase "Intelligence Everywhere". It also filed a trademark application with the USPTO, and registered the domain www.intelligenceeverywhere.com. Then, MicroStategy, which had not registered the trademark "Intelligence Everywhere", filed a complaint in U.S. District Court (EDVa) against Motorola on Feb. 13, 2001 alleging trademark infringement, trademark dilution, and cybersquatting. MicroStrategy moved for a preliminary injunction, which the District Court denied. This interlocutory appeal followed. The Appeals Court affirmed, on the basis that MicroStrategy failed to demonstrate that it has a valid and protectable mark; it failed to demonstrate that it has likely used "Intelligence Everywhere" to identify MicroStrategy as the source of its goods or services. 3/28. The U.S. Court of Appeals (5thCir) issued its opinion in Kee v. Rowlett, an electronic surveillance case. The police placed an electronic surveillance microphone at an outdoor grave site memorial service as part of their investigation of the murder of two children. The children's mother was eventually convicted of capital murder. The police intercepted the conversations of Darlie Kee and Darin Routier, the children's grandmother and father, at the service. The police had the permission of the cemetery owner, but not the service's attendees. They had no warrant. When Kee and Routier learned of the surveillance, they filed a complaint in U.S. District Court (NDTex) against The City of Rowlett, Texas, and its police officers Jimmy Ray Patterson and Chris Frosch, and Assistant District Attorney Greg Davis, under 42 U.S.C. § 1983 and 18 U.S.C. § 2511. The District Court dismissed, and the Court of Appeals affirmed, on the grounds that there is no reasonable expectation of privacy regarding oral communications at a grave site memorial service. 3/28. The U.S. Court of Appeals (8thCir) issued its opinion [PDF] in Black Clawson v. Kroenert, a case regarding licensing of proprietary information. Plaintiff, Black Clawson, is a licensee of intellectual property owned by a German corporation, Pagendarm Technologie. The license agreement grants it the exclusive rights to use proprietary information in its manufacturing business in North America. Defendants allegedly marketed products in the U.S. based on theft of the licensed technology. Plaintiff filed suit in U.S. District Court (NDIowa) alleging violation of the RICO Act, the Lanham Act, and various state law causes of action, including misappropriation of trade secrets. The District Court granted summary judgment to defendants. Reversed and remanded. 3/28. President Bush met with high tech leaders at the White House. He gave an address in which he outlined his high tech agenda; it includes lower taxes, free trade, fast track trade negotiating authority, support for the Export Administration Act, a permanent research and development tax credit, and education. President Bush advocated free trade, and requested that the Congress give him fast track trade negotiating authority. He said that "One of the concerns is if the economy were to slow down like ours, the protectionist sentiments around America might start bubbling to the surface. Ours is an administration dedicated to free trade. I hope the Congress gives me trade promotion authority, as soon as possible, so I can negotiate free trade agreements. We should not try to build walls around our nation and encourage others to do so. We ought to be tearing them down. Free trade is good for America. And it will be good for your industry, as well." President Bush addressed the S 149, the Export Administration Act, sponsored by Sen. Mike Enzi (R-WY). The bill eases restraints on the export of most dual use products, such as computers and software. It was amended and adopted by the Senate Banking Committee by a vote of 19 to 1 on March 22. President Bush called it a "good bill." He added that "The existing export controls forbid the sales abroad of computers with more than a certain amount of computing power. With computing power doubling every 18 months, these controls had the shelf life of sliced bread. They don't work." The bill as adopted on March 22 repeals provisions of the 1998 National Defense Authorization Act which require the President to use MTOPS to set restrictions on the export of high performance computers. President Bush advocated making the research and development tax credit permanent. The Clinton administration supported temporary extensions. Bush stated that "we want the R&D credit to be permanent, and we're working with members of the Senate to do so. A lot of us in this administration have been in the world of taking risk. We understand that one of the most important parts about government policy is that there will be certainty in the policy. And I think making the R&D credit a permanent part of the tax code is part of creating certainty, so people can more wisely make investments with cash flow in their capital accounts." President Bush also announced his intent to appoint Floyd Kvamme to be Co-Chair and Member of the President's Committee of Advisors on Science and Technology. He is a partner in the venture capital firm of Kleiner Perkins Caufield and Byers, which is based in Menlo Park, California. He is also a major Republican contributor. Another KPCB partner, John Doerr, was close to the Clinton administration. See also, release. 3/28. Sen. Charles Grassley (R-IA) issued a statement [PDF] on the U.S. Jordan Free Trade Agreement (FTA) [PDF], negotiated by the Clinton administration last year. The Senate has yet to ratify it. Sen. Grassley, who is Chairman of the Senate Finance Committee, said that "I look forward to the new administration finalizing a trade agreement with Jordan." He further suggested that the Bush administration modify the FTA, as Clinton modified the NAFTA after it had been negotiated by the previous Bush administration. Trade with Jordan is not significant. However, the terms of this FTA are important because it may set a pattern for future FTAs with other nations. The main controversy is whether these FTA's should contain language addressing labor and environmental issues, as does the agreement as currently drafted. The Jordan FTA is also significant because it contains extensive language pertaining to intellectual property and e-commerce. This FTA addresses patents, trademarks, copyright, and enforcement of IPR. It also provides that the parties will not impose new customs duties on electronic transmissions. 3/28. The FCC announced a Notice of Proposed Rulemaking (NPRM) regarding licensing, operating, and competitive bidding in the reallocation of the 698-746 MHz spectrum band (TV Channels 52-59) for new commercial wireless and broadcast services. See, FCC release. The FCC is reclaiming this spectrum as a part of the transition from analog to digital television. 3/28. The FTC announced that it has approved amendments to the FTC's Regulations on Organization, Procedure and Rules of Practice. The changes include electronic filing requirements, new procedures for expert discovery, in camera motions and foreign subpoenas, and changes in the format requirements for briefs. See, notice to be published in the Federal Register. 3/28. Three senior Democrats on the House Commerce Committee wrote a letter to FTC Chairman Robert Pitofsky requesting that the FTC investigate the privacy practices of TiVo, a maker of personal video recorders and a provider of personal television programming services. The letter questions whether TiVo violates its own privacy policy by collecting information about its customers' program viewing selections, and whether this violates the prohibition in § 5 of the Federal Trade Commission Act against "unfair or deceptive practices." The letter was written by Rep. John Dingell (D-MI), Ranking Member of the full committee, Rep. Edolphus Towns (D-NY), Ranking Member of the Subcommittee on Commerce, Trade, and Consumer Protection, and Rep. Ed Markey (D-MA), Ranking Member Subcommittee on Telecommunications and the Internet. 3/28. Rep. James Greenwood (R-PA) introduced HR 1215, a bill regarding the confidentiality of medical records and health care related information. The bill was referred to both the House Commerce Committee and the House Judiciary Committee. 3/28. Rep. Fred Upton (R-MI) announced that the House Commerce Committee's Telecom Subcommittee will hold a hearing titled the E-Rate and Filtering: A Review of the Children's Internet Protection Act on April 4. The Children's Internet Protection Act (CIPA) requires schools and libraries receiving e-rate subsidies to use pormography filtering technology on Internet access computers used by children. On March 20 the Multnomah County Public Library (Portland Oregon area) and other plaintiffs filed a complaint [PDF] in U.S. District Court (EDPa) against the U.S. and other defendants challenging the constitutionality of the CIPA. The American Library Association and others filed a separate complaint [PDF]. 3/28. The American Bar Association's Antitrust Section held its annual spring meeting in Washington DC on March 26 - 28. Outgoing FTC Chairman Robert Pitofsky and FTC Commissioner Mozelle Thompson spoke at the meeting on March 28. 3/28. President Bush nominated Daniel Bryant to be an Assistant Attorney General. See, release. 3/28. President Bush nominated John Graham to be Administrator of the Office of Information and Regulatory Affairs at the Office of Management and Budget. See, release. 3/27. Sen. Conrad Burns (R-MT) and Sen. Ron Wyden (D-OR) introduced a bill titled the CAN-SPAM Act. See, Burns release. On March 28, the House Commerce Committee is scheduled to mark up HR 718, the Unsolicited Commercial Electronic Mail Act of 2001, sponsored by Rep. Heather Wilson (R-NM) and Rep. Gene Green (D-TX). HR 718 was marked up by the House Telecom Subcommittee last week. The House Judiciary Committee also has jurisdiction. 3/27. The U.S. Court of Appeals (2ndCir) issued its opinion in Crescent Publishing v. Playboy, an appeal from an award of attorneys fees in a copyright case. Crescent filed a complaint in U.S. District Court (SDNY) against Playboy alleging that Playboy infringed its copyright on a photograph. The District Court dismissed the case, after Crescent conceded that it did not have the requisite proof of copyright ownership. The Court also awarded attorneys' fees to Playboy sua sponte. Crescent appealed both the decision to award attorneys' fees, and the determination of the amount. Vacated and remanded. 3/27. The U.S. Court of Appeals (4thCir) issued its opinion in DTM Research v. AT&T, a case involving claimed trade secrets in data mining technology. After signing a confidentiality agreement, AT&T negotiated with DTM regarding its "Orca Blue" process for mining and analyzing large quantities of call detail data. After receiving a demonstration, AT&T declined to contract with DTM, and conducted its data mining in house instead. DTM then filed a complaint in U.S. District Court (DMd) against AT&T based upon diversity of citizenship alleging misappropriation of trade secrets, under Maryland law, during the contract negotiations. AT&T's defense, in part, is that DTM's "Orca Blue" was misappropriated from the U.S. AT&T then sought discovery relevant to this defense from the U.S. and its contractors. The U.S. intervened, invoked the "state secrets" privilege, and moved to quash AT&T's subpoenas on the grounds that any inquiry into the technology would threaten national security. The District Court quashed AT&T's subpoenas. AT&T then moved for summary judgment on the grounds that it could not defend against DTM's claims. The District Court denied this motion, but certified an appeal. AT&T brought this appeal. The Appeals Court affirmed. It held that fee simple ownership in its traditional sense is not an element of a trade secrets misappropriation claim in Maryland. It also held that the U.S.'s assertion of the state secrets privilege does not deny AT&T a fair trial, and does not require termination of this litigation. Remanded. 3/27. The U.S. Court of Appeals (6thCir) issued its opinion in Foundation for Interior Design Education Research v. Savannah College of Art & Design, a case involving a claim that an accreditation body violated the Sherman antitrust act. The District Court found no violation of the Sherman Act, and the Appeals Court affirmed. 3/27. The plaintiffs in A&M Records v. Napster filed a pleading [PDF] with the U.S. District Court (NDCal) titled "Plaintiffs' Report on Napster's Non-Compliance with Modified Preliminary Injunction" in which they argue that "Napster has failed to abide by either the letter or spirit of this Court's Preliminary Injunction. Plaintiffs have provided Napster with notice of over 675,000 copyrighted works. Stunningly, every single song listed in the original complaint remains easily available on the Napster system. In a very recent search for approximately 7000 of those works that Napster claims to have filtered pursuant to plaintiffs' notices, approximately 70% of them could be found by simply searching for the artist and song name." Napster wants Judge Patel to require Napster to implement either a "filtering in" system, or an effective "filtering out" system. Napster CEO Hank Barry disputed these claims. He asserted that "Napster is aggressively complying with the injunction with significant measurable results." See, statement. 3/27. President George Bush gave a speech in Kalamazoo, Michigan, in which he advocated free trade. He stated: "When economy slows down, protectionist pressures tend to develop. We've seen this happen before, and it could happen again. So I want to say this as clearly as I can: Trade spurs innovation; trade creates jobs; trade will bring prosperity." 3/27. Sen. Charles Grassley (R-IA) released a statement [PDF] in which he said that "Sometime this year Congress will decide whether or not to renew the President's trade negotiating authority. The decision will be to move forward and open new markets for America’s farmers, entrepreneurs and service providers or to take a back seat to our competitors. I'll do all I can to see that we continue to move forward." Sen. Grassley is Chairman of the Senate Finance Committee, which has jurisdiction over this legislation. 3/27. House Majority Leader Dick Armey (R-TX) gave a speech on fast track trade negotiating authority. He stated: "The votes are there in the House, and I suspect in the Senate as well, and we should just go ahead and do it," Armey told a March 27 luncheon of the Emergency Committee for American Trade, a pro-trade lobbying group. See, State Dept. release. 3/27. Joel Mesplou plead guilty to making false statements to the SEC during an insider trading investigation, in violation of 18 U.S.C. § 1001. Mesplou acquired insider information of Sun Microsystems' impending acquisition of Cobalt Networks from an associate at Brobeck Phleger working on the transaction. Mesplou also settled civil insider trading charges brought by the SEC. The Information [PDF], dated March 20, 2001, states that Mesplou "is a professional investor and a partner in an investment firm based in Palo Alto, CA." It continues that he "became acquainted" with an associate "employed in the Business and Technology practice group of the Palo Alto, CA office of the law firm of Brobeck, Phleger & Harrison." She provided Mesplou "with material nonpublic information about a merger on which she was working, namely, a transaction in which Sun Microsystems, Inc. ("Sun") would acquire Cobalt Networks, Inc.". The Information continues that on or about the next day Mesplou purchased call options and stock in Cobalt totaling $1,182,687.70. Then, on or about the next day, "Sun announced publicly that it had reached an agreement to acquire Cobalt" and Mesplou "sold all of the Cobalt stock and options which he had purchased ..." When the SEC investigated his trades, he lied. See also, Plea Agreement and release. The associate is no longer with the firm. 3/27. House Speaker Dennis Hastert (R-IL) and Rep. Chris Cox (R-CA) announced the chairmen, membership, and jurisdiction of seven subcommittees of the House Policy Committee. This committee serves the House Republican leadership as a forum for discussion of legislative initiatives, for the enunciation of official priorities, and for the resolution of jurisdictional policy disputes. Rep. Cox is Chairman of the Committee. One of the seven subcommittees is name Biotechnology, Telecommunications, and Information Technology; its Chairman will be Rep. Jerry Weller (R-IL). Its jurisdiction includes biomedical research, development, and technology; telecommunications, the Internet, and information technology; intellectual property; astronautical research and development; scientific research and development; and the activities of the NIST, the NASA, the NSF, the FCC, the FDA, and the FTC. It other members will be Barbara Cubin (R-WY), Tom Davis (R-VA), Ernie Fletcher (R-KY), Vito Fossella (R-NY), Bob Goodlatte (R-VA), Felix Grucci (R-NY), Darrell Issa (R-CA), Deborah Pryce (R-OH), Nick Smith (R-MI), Cliff Stearns (R-FL), John Sununu (R-NH), Billy Tauzin (R-LA), John Thune (R-SD), and Dave Weldon (R-FL). See, complete list [PDF] of subcommittees, chairmen, and memberships. 3/27. The ITAA and Unisys stated that they conducted a poll of public opinion on modernization of voting technology. They stated that "only 39% believed that the Internet should be used to allow people to vote." See, ITAA release. 3/27. Thomas Foley rejoined the Washington DC office of the law firm of Akin Gump as a partner. He was previously Ambassador to Japan. He also represented eastern Washington state in the House of Representatives from 1964 through 1994, culminating as Speaker. 3/27. Edward Kientz was named Chairman of the Telecommunications Industry Association's Board of Directors. The TIA is a trade association involved in communications and information technology industry policy and standards setting. See, release. Kientz is President of Benner-Nawman, the inventor of the aluminum and glass phone booth. 3/27. The National Telephone Cooperative Association gave Sen. Blanche Lincoln (D-AR) its Congressional Leadership Award at its Annual Legislative Conference in Washington DC. Sen. Lincoln gave an address at the meeting. 3/27. The NIST published a notice in the Federal Register that it will hold a public workshop on modes of operation for securing data using symmetric key block cipher algorithms, such as the algorithm specified in the draft Advanced Encryption Standard (AES). Interested parties may suggest ideas or submit papers for discussion at the workshop, including proposals of modes of operation. The workshop will be held at the NIST on August 24, 2001, from 9:00 AM to 5:00 PM. [Federal Register, March 27, 2001, Vol. 66, No. 59, at Pages 16658 - 16659.] 3/26. Napster published a notice in its web site urging supporters of online music file copying to converge on Washington DC on April 2 and 3 to "educate Congress." The Senate Judiciary Committee, led by Sen. Orrin Hatch (R-UT) and Sen. Pat Leahy (D-VT), has scheduled a hearing on online entertainment and copyright law for 10:00 AM on April 3. Napster will hold a "teach in" on music file copying at the Catholic University law school at 7:00 PM on April 2. See, teach in notice. Napster wants its supporters to meet at Union Station at 9:00 AM on April 3, and then march to the Capitol Hill hearing room several blocks away. Napster will hand out free t-shirts and concert tickets to people who come to the hearing. 3/26. Rep. John Dingell (D-MI) and Rep. Ed Markey (D-MA) sent a letter to Acting SEC Chairman Laura Unger requesting that the SEC "initiate an immediate investigation into securities industry use of unsolicited "spam" e-mails." The letter was prompted by a March 20 letter [PDF] sent by numerous leading financial institutions and groups to Members of Congress which argues that the private right of action contained in the HR 718 will "discourage the use of electronic commerce", and that the language in the bill preempting state spam laws is too weak. The two want to know "exactly what practices these firms are seeking to perpetuate." 3/26. Paul Roye, Director of the SEC's Division of Investment Management gave a speech in Washington DC titled "Managing the Revolution" in which he addressed the E-SIGN Act, the Internet, and other topics. He stated that "the explosive growth of the Internet and the movement of investors and advisers online does not mean that our statutes do not apply to products and services offered on the web; they apply irrespective of the medium used to deliver these services." 3/26. Three defendants plead guilty in U.S. District Court (NDCal) in a case involving two Fremont computer component distribution businesses that sold stolen computer components. However, the Defendants plead to crimes associated with their laundering of proceeds. Paul Chen plead guilty to one count of money laundering conspiracy, in violation of 18 U.S.C. § 1956(h), and one count of filing a false income tax return in violation of 26 U.S.C. § 7206(1). Chiu-Mei Chen plead guilty to wire fraud and aiding and abetting, in violation of 18 U.S.C. §§ 1343 & 2, and filing a false income tax return in violation of 26 U.S.C. § 7206(1). Tony Ip pled guilty to one count of money laundering conspiracy, in violation of 18 U.S.C. § 1956(h). Charges against three other defendants are still pending. Joseph Sullivan, of the U.S. Attorney's Office Computer Hacking and Intellectual Property Unit, is prosecuting the case. See, release. 3/26. The FCC issued a request for comments [PDF] on five reports that it has received regarding the potential for ultra-wideband (UWB) transmission systems to cause harmful interference to other radio operations. UWB devices, which use very narrow pulses with very wide bandwidths, have potential applications in both radar and communications technologies. It has been suggested that UWB devices can use large portions of already allocated spectrum with minimal or no interference to incumbent users. Both the FCC and NTIA are studying the issue of interference. The five reports are (1) NTIA comment [PDF/NTIA] on effect of UWB on GPS, March 9; (2) Qualcomm comment [PDF/ECFS] on effect of UWB on PCS phones, March 5; Time Domain comment on effect of UWB on GPS receivers, March 9; Dept. of Transportation comment on effect of UWB on GPS, March 21; and DOT comment on effect of UWB on GPS. These documents are sometimes, but not always, available on the FCC's Electronic Comment Filing System (ECFS) at www.fcc.gov/e-file/ecfs.html. (See, ET Docket 98-153.) Comments are due by April 25, 2001. Reply comments are due by May 10, 2001. 3/26. President Bush announced his intent to nominate Jon Huntsman to be Deputy United States Trade Representative. He is currently the Vice-Chairman of the Huntsman Corporation in Salt Lake City, Utah. He was as Ambassador to Singapore from 1992 to 1993. He was in the Commerce Department from 1989 to 1992, as Deputy Assistant Secretary for East Asian and Pacific Affairs and Deputy Assistant Secretary in the International Trade Administration. See, release. 3/26. President Bush announced his intent to nominate former Sen. Howard Baker (R-TN) to be Ambassador to Japan. See, release. Baker represented Tennessee in the Senate for three terms, and was Senate Majority Leader from 1981 to 1985. 3/26. The Supreme Court of the U.S. denied certiorari in Michael Fine v. America Online, No. 00-1178. See, Order List [PDF] at page 3. 3/26. The U.S. Court of Appeals (8thCir) issued its opinion [PDF] in Ritchey v. Horner, a case concerning application of the statute of limitations in 10b securities fraud litigation. 3/26. Benjamin Ballard was arrested in Portland, Oregon, on a felony complaint filed in U.S. District Court (SDNY) charging him with sending an interstate threatening communication via the Internet. The complaint alleges that he used his home computer to access the Internet, and engage in an instant message exchange with a student at a high school in White Plains, New York. In this IM exchange he pretended to be a senior at at the school, and warned the recipient not to go to school the next day because "theres going to be a lot of people dead tomorrow ..." The FBI was able to trace the IM back to him. AUSA Lauren Goldberg is in charge of the prosecution. See, DOJ release. |
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