|News Briefs from July
Export Administration Act News
7/25. The House
International Relations Committee approved HR 2602 by a voice vote. This
bill, which is sponsored by Rep. Henry Hyde
(R-IL), would extend the Export Administration Act (EAA) until November 20,
2001. It is currently set to expire in August. The Senate Banking Committee passed S 149 on March
22, 2001. That bill would extend the EAA and ease restraints on the export of
most dual use products, such as computers and software. There are several
variations of this bill pending in the House, including HR 2568 (Dreier),
(Gilman), and HR
7/24. Sen. Tom Daschle (D-SD), the
Senate Majority Leader, briefly addressed the EAA on the Senate floor. He stated
that "the Export Administration Act is also in peril. The act expires
during the August recess. The administration has indicated this is a high
priority for them. It is a high priority for our caucus, but I think, on a
bipartisan basis, Senators on both sides of the aisle have indicated a strong
desire not to allow this legislation to expire in August. So it is my
expectation that it, too, must be dealt with prior to the time we leave."
See, Congressional Record, July 24, at Page S8102.
Rep. DeLauro Attacks PR China's Record on Intellectual
7/25. Rep. Rosa DeLauro (D-CT)
addressed trade with China in the House. She stated that "China has engaged
in unfair trade practices, pirated intellectual property, spread weapons and
dangerous technology to rogue nations, suppressed democracy, denied its citizens
religious freedom, and engaged in human rights abuses." She continued that
"The United States should use our trade laws with China to pressure for
greater access for American companies and goods. I oppose NTR for China because
we need to let China know that more of the same is not acceptable. It is vital
that we insist on fair and equal standards in compliance with all aspects of our
trade laws. Until this happens, I cannot support NTR."
7/25. Sen. Orrin Hatch (R-UT), Sen. Charles Schumer (D-NY), and Sen. Mike DeWine (R-OH), introduced S 1234, a
bill to provide that certain sexual crimes against children are predicate crimes
for the interception of communications. The bill was referred to the Senate Judiciary Committee.
Sen. Hatch said in the Senate that "The Anti-Sexual Predator Act of 2001
will add three predicate offenses to the Federal wiretap statute. This addition
will enable law enforcement to intercept wire and oral communications relating
to child pornography materials, the coercion and enticement of individuals to
travel interstate to engage in sexual activity, the transportation of minors for
the purpose of engaging in sexual activity." He elaborated that
"Although in many cases much of the initial relationship between these
sexual predators and their child victims takes place online, the predators will
ultimately seek to have personal contact with the child. Thus, the
communications will move first to the telephone, and then to face to face
meetings. .. As the laws stand today, investigators do not have access to the
Federal wiretap statutes to investigate these predators."
See also, HR
1877, the Child Sex Crimes Wiretapping Act of 2001, introduced by Rep. Nancy Johnson (R-CT) and
others on May 16. HR 1877 was marked up by the House Crime Subcommittee on
7th Circuit Rules in Trade Secrets Case
7/25. The U.S.
Court of Appeals (7thCir) issued its opinion
v. Accu-Tech Plastics, a case involving misappropriation of trade
secrets by former employees of 3M.
Facts. 3M makes carrier tape. Three employees of 3M who were integral to
3M's development of carrier tape manufacturing clandestinely formed their own
company, Accu-Tech Plastics, to manufacture and market resin sheeting, the
essential component of carrier tape. When 3M learned of Accu-Tech, it terminated
the individuals, and filed a complaint in U.S. District Court (WDWisc)
against Accu-Tech and the three former employees.
Complaint. The complaint alleged, as to the three individual defendants,
breach of fiduciary duty, breach of employment contracts, and misappropriation
of trade secrets. The complaint also alleged, as to Accu-Tech, misappropriation
of trade secrets, unfair competition, tortious interference with prospective
contractual relationships, and tortious inducement to breach his employment
contract with 3M.
Trial Court. The jury found that Accu-Tech had misappropriated trade
secrets from 3M, and that Accu-Tech's founders had breached duties of loyalty
owed to 3M. The District Court overturned some of the jury's findings of
liability, upheld other findings, and granted 3M's request for a permanent
injunction barring the disclosure, but not the use, of the trade secrets which
the jury found Accu-Tech had misappropriated.
Appeals Court. Both sides appealed. The Appeals Court affirmed the
District Court on all matters, except that it reversed and remanded the District
Court's grant of summary judgment to Accu-Tech on 3M's claim for unlawful
Sen. Baucus Makes Trade Promotion Authority Proposal
7/25. Sen. Max Baucus (D-MT) released a
proposal for extending trade promotion authority (also known as "fast
track") to the President. He released a summary [PDF] and a statement [PDF];
however, he has not yet introduced a bill. Sen. Baucus proposes a two year grant
of authority, with the possibility of extension for an additional three years.
And, he includes labor and environment provisions.
Sen. Baucus is the new Chairman of the Senate
Finance Committee, which has jurisdiction over this legislation. He stated
that "There has been a great deal of discussion of how to develop a
realistic, bipartisan approach to fast track. But there has been very little
serious work. The Administration misses few opportunities to call upon the
Congress to grant fast track. But it has yet to table a serious proposal or bill
to achieve that goal. Some of my colleagues in the House have introduced a fast
track bill. But it is a bill that completely ignores the most controversial
issue of the day – the appropriate handling of labor rights and environmental
issues. No one has put forward a truly bipartisan proposal on fast track
Labor and Environment. Sen. Baucus proposes "achieving agreements
from countries not weaken their labor or environmental laws to distort trade;
provisions to support existing labor rights and environmental norms; and
flexible enforcement procedure that allows the President to select from a range
of options, including trade sanctions, fines, incentives, or other measures
appropriate to the circumstances."
IPR. Sen. Baucus also proposes to "Continue to pursue efforts to
protect intellectual property rights, taking into account the need for special
rules that may need to apply to health emergencies."
E-Commerce. Sen. Baucus proposes to "Promote the liberalization of
services essential to e-commerce, including telecommunications, computer related
services, advertising and business services, distribution services (including
the distribution of digitized content), information technology services, and
financial services, including internet payments", "Seek the protection
of intellectual property both online and offline, including stronger
enforcement", and "Seek to eliminate all trade barriers to digitized
trade, especially the online delivery of digitized content (including movies,
music, software and publications)."
Other Bills. There are already several pending bills to extend trade
promotion authority to the President. Sen.
Bob Graham (D-FL), Sen. Frank
Murkowski (R-AK), and others introduced, S 1104, the
Trade Promotion Act of 2001. See also, S 599. On the
House side, Rep. Phil Crane (R-IL) has
Senate Holds Hearing On Cybercrime and NIPC
7/25. The Senate Judiciary Committee's
Technology, Terrorism, and Government Information Subcommittee held a hearing on
the National Infrastructure Protection Center
(NIPC) and cybercrime. The NIPC, which is a part of the FBI, was created by
Presidential Decision Directive (PDD) 63 in May of 1998 as a part of the federal
government's strategy to protect national infrastructures from hostile attacks,
especially computer based attacks.
Robert Dacey, of the Congress's General Accounting
Office (GAO), testified regarding a GAO study of the NIPC. He concluded in
testimony that "we found that progress in developing the analysis,
warning, and information sharing capabilities called for in PDD 63 has been
mixed. The NIPC has initiated a variety of critical infrastructure protection
efforts that have laid a foundation for future government wide efforts. In
addition, it has provided valuable support and coordination related to
investigating and otherwise responding to attacks on computers. However, at the
close of our review in February 2001, the analytical and information sharing
capabilities that PDD 63 asserts are needed to protect the nation's critical
infrastructures had not yet been achieved, and the NIPC had developed only
limited warning capabilities."
See, prepared testimony of witnesses: Ron Dick (NIPC),
McDonald (General Services Administration), James Savage
(Secret Service), Michehl
Gent (North American Electric Reliability Council), and Christopher Klaus
(Internet Security Systems).
FCC Approves Fox Chris Craft Transfers
7/25. The FCC approved the application of Fox Television Stations to acquire
licenses of 10 TV stations held by Chris-Craft Industries and its subsidiaries
BHC Communications and United Television. The FCC approved the license transfers
with conditions requiring the licensee to comply with FCC rules on television
duopolies, the 35% national television audience cap, and newspaper /
broadcast cross ownership. See, FTC
Mendelson and Ora
Fisher were appointed Co-Chairs of Venture and Technology Practice Group
at the law firm of Latham & Watkins.
Mendelson replaces Ted
Sonnenschein, who will joining Coastview Capital, a venture capital firm
focusing on life science investments. Sonnenschein will remain of Counsel to the
firm. See, LW release.
7/25. Verizon notified the Rhode Island Public
Utilities Commission that it intends to file a Section 271 application with the
to provide interLATA services in Rhode Island. See, Verizon
7/25. The FCC published a notice
in the Federal Register of its most recent postponement of auctions for spectrum
licenses licenses in the 747-762 and 777-792 MHz band (Auction No. 31). These
had been scheduled to begin on September 12, 2001. See, Federal Register, July
25, 2001, Vol. 66, No. 143, at Pages 38704 - 38705.
7/25. The NCTA filed a supplemental
brief [PDF] with the Supreme Court
of the United States in NCTA v. Gulf Power Company, the pole
7/25. The Senate Judiciary Committee
issued its Report
No. 107-46 on S 407, the Madrid Protocol Implementation Act. This
bill amends the Trademark Act of 1946 to provide for the registration and
protection of trademarks used in commerce, in order to carry out provisions of
certain international conventions.
Senate Judiciary Committee to Hold Hearings on Microsoft
7/24. Sen. Patrick Leahy (D-VT), Chairman
of the Senate Judiciary Committee,
announced that his committee will hold hearings "beginning in September, on
competition and innovation involving advanced computer and Internet
technologies, to ensure the broadest possible consumer choices." The
hearings will examine "network effects, licensing issues, exclusive
contracting, convergence, access to digital content and other topics." See,
Sen. Leahy's release continued that the hearings will examine "instant
messaging, digital photography, voice recognition, audio and video programming
and editing, Web services, calendar management, navigation devices, data
storage, Internet auctions, financial services, security, consumer privacy, and
integration of new features".
The release also states that the hearings will address Internet related
antitrust issues, including "portals to the Internet, high-speed Internet
access, server markets, database and online technology in operating systems,
networking effects, and access to services and consumers."
The Senate Judiciary Committee has jurisdiction over antitrust issues. Former
Chairman Orrin Hatch (R-UT) also held a
hearing on Microsoft on July 23, 1998. See, links to testimony.
Sen. Schumer Pressures Microsoft and DOJ on Windows XP
7/24. Sen. Charles Schumer (D-NY), who
is also a member of the Senate
Judiciary Committee, wrote a letter
to Microsoft CEO Steve Ballmer regarding Windows XP and antitrust issues. He
stated that he has defended Microsoft in the past, but that Microsoft is now
loosing his support, because features of the soon to be released Windows XP
operating system will harm two New York companies, Kodak and AOL Time Warner.
Kodak digital imaging software. He elaborated that "Windows XP
throws up roadblocks for customers seeking to use Kodak's digital imaging software. All
customers, even those who specifically install the Kodak software application,
are presented with the Microsoft application, 'Scanner & Camera Wizard,'
meaning additional steps are necessary for those consumers to access the Kodak
software." Kodak is based in Rochester, New York. Sen. Schumer also wrote
that "it would seem that Windows XP's license for digital photography may
violate the D.C. Circuit Court's ruling, as Microsoft is preventing PC
manufacturers from removing or replacing 'Scanner & Camera Wizard' with a
AOL Time Warner. Sen. Schumer also wrote than AOL Time Warner will be
harmed by Microsoft's plans to bundle Windows Media Player 8.0 with Windows XP.
He explained that "Windows XP will prevent PC manufacturers from removing
or replacing the Windows Media Player with competitive alternatives, in seeming
violation of the D.C. Circuit Court's recent ruling. In doing so, Windows XP is
poised to extinguish Real Player or any other alternative music player in the
same manner as it did Netscape."
Sen. Schumer concluded that "It appears to me that Microsoft intends to
maximize its monopolistic power, using XP as a platform to enter new lines of
business while encumbering competitors. It also appears that Windows XP will
limit the ability of PC manufacturers to offer consumers a choice of products
and services. In my opinion, Microsoft should be held to the same standard as
other natural monopolies, like the cable industry -- Microsoft's operating
system should be a gateway to the Internet, not a gatekeeper. Without open
access, the fundamental principles of a free market are violated, innovation is
stifled, and consumer welfare is harmed." He asked Microsoft to make
changes to its Windows XP. If not, "regulators should closely scrutinize
the antitrust implications of the release of Windows XP and should consider
enjoining its release" and "the Senate Judiciary Committee should hold
Sen. Schumer also wrote a letter to
Charles James, Assistant Attorney General for the Antitrust Division, urging him to expand
his "ongoing settlement negotiations with Microsoft to include negotiations
over Windows XP".
House Telecom Subcommittee Holds Hearing on 3G Spectrum
7/24. The House Commerce Committee's
Telecommunications and Internet Subcommittee held a hearing titled "U.S.
Deployment of Third Generation Wireless Services: When Will It Happen and Where
Will It Happen?" 3G is intended to bring broadband wireless Internet access
and other communications services to mobile devices, including laptops, cell
phones and PDAs. Locating spectrum for 3G systems is proving difficult for the
agencies responsible for spectrum management -- the FCC and NTIA. Congress may
soon seek a legislative solution.
The U.S. does not have very much unused spectrum to allot for 3G systems. Hence,
spectrum currently allotted to the private sector or government entities for
other purposes will have to be reallocated or shared. Incumbent users are
steadfastly opposed to reallocation or sharing of spectrum that they currently
use. Efforts by the Clinton administration, the FCC and NTIA have produced
meetings, reports and studies, but little progress.
To date, three spectrum bands have been identified for possible use for 3G
systems: 698 to 960 MHz, 1710 to 1885 MHz, and 2500 to 2690 MHz. Part of the
1710 to 1885 MHz band is currently being used by federal agencies, especially by
the Department of Defense. The National Telecommunications and Information
Administration (NTIA), which is a part of the Department of Commerce, has
responsibilities regarding spectrum management for spectrum used by government
entities. This includes the 1755 to 1850 MHz band. The FCC has spectrum
management responsibilities for spectrum used by the private sector. This
includes the 2500 to 2690 MHz band, which is currently being used for MMDS, MDS,
Monsignor Michael Dempsey, of the Catholic Television Network, which a major
ITFS licensee of spectrum from the FCC, testified that the spectrum being used
by the Catholic church for educational and other purposes is "not a viable
choice" for reallocation for 3G systems, and Congress should "take it
off the table." No member of the subcommittee debated this point with the
Monsignor. Similarly, Linton Wells, of the Defense Department, testified that
spectrum used by the Defense Department could not be reallocated without
jeopardizing national security.
See, prepared testimony of witnesses: Michael
Dempsey (Catholic Television Network), Linton
Wells (Department of Defense), William
Hatch (Commerce Dept.), Julius
Knapp (FCC Office of Engineering and Tech.), Denny
Strigl (Verizon Wireless), and Thomas
Rep. Chip Pickering (R-MS) stated
that he would likely introduce legislation to establish a process for
reallocating spectrum for 3G services. He suggested that proceeds from the
auction of spectrum currently being used by the military should go back to the
military to fund the relocation process. However, Rep. Ed Markey (D-MA) stated that
auction proceeds should be used for education, teacher training, and closing
"the digital divide." Rep. Fred
Upton (R-MI), the subcommittee Chairman, stated that he expected Rep.
Pickering to introduce his bill after the August recess, and the subcommittee to
hold a legislative hearing this fall.
Members of the subcommittee also used the hearing to discuss other spectrum
issues. Rep. Karen McCarthy
(D-MO) and Rep. Bobby Rush (D-IL)
pressured witnesses to move more rapidly on deploying emergency 911
capabilities, including caller location. Rep.
Clifford Stearns (R-FL) and others advocated lifting the current spectrum
Rep. Upton presided throughout the hearing. See, opening
statement. Rep. Billy Tauzin (R-LA), the Chairman of the full committee, was
not present, but submitted a statement
for the record. 21 of the subcommittee's members participated in at least part
of the hearing.
House Holds Hearing on Internet Gambling Bills
7/24. The House Financial
Services Committee's Financial Institutions Subcommittee held a hearing on HR 556, the
Unlawful Internet Gambling Funding Prohibition Act, and other bills pertaining
to Internet gambling. See, opening statement
[PDF] of Rep. Michael Oxley (R-OH),
Chairman of the full committee, and opening statement
[PDF] of Rep. Spencer Bachus (R-AL),
Chairman of the subcommittee. See also, prepared statements in PDF of witnesses:
(Wachovia Bank Card Services), Bob Frederick (NCAA),
(National Indian Gaming Association), Edwin McGuinn
(E-Lottery), and Timothy
Kelly (National Gambling Impact Study Commission).
HR 556, which is sponsored by Rep. Jim
Leach (R-IA), and HR 2579, the
Internet Gambling Payments Prohibition Act, which is sponsored by Rep. John LaFalce (D-NY), both attempt
to stop illegal gambling over the Internet by prohibiting the use of certain
financial instruments, including credit extended via a credit card, electronic
fund transfers, and checks. The House Finance Committee has jurisdiction over
In addition, Rep. Jon Kyl (R-AZ) and Rep. Bob Goodlatte (R-VA) sponsored
bills in the 105th and 106th Congresses that would ban some Internet gambling
activities, and rely upon criminal prosecutions and actions by interactive
computer service providers for enforcement. See, S 692 (106th)
and HR 3125
(106th). Neither Kyl nor Goodlatte have reintroduced legislation in the current
(107th) Congress. However, Rep. Goodlatte has stated that he may introduce a
bill next week. The Judiciary Committees have jurisdiction over crime bills.
Both Kyl and Goodlatte are members of these committees.
Reps. Shimkus and Markey Seek a .kids Domain
7/24. Rep. John Shimkus (R-IL) and Rep. Ed Markey (D-MA) held a press
conference to promote HR 2417, the Dot
Kids Domain Name Act of 2001, which they introduced on June 28. The bill would
require the National Telecommunications and
Information Administration (NTIA), which is a part of the U.S. Department of
Commerce, to exercise its authority under its Memorandum of Understanding with
the ICANN to work
with ICANN to create a child friendly top level domain (TLD).
Rep. Shimkus stated in a release that "I introduced this bill to bring
about the long talked about idea of creating safe haven for children on the
World Wide Web where positive content is promoted. The Internet Corporation for
Assigned Names and Numbers (ICANN) had the perfect opportunity to do create a
safe zone for children in the last round of Top Level Domain Names (TLDs)
selection, but failed to do so. Since ICANN has shown no interest in helping to
achieve this goal, Congress must act."
Rep. Markey stated that "Rather than trying to send problematic material
for children into a specific area, such as 'dot adult' ... the cyberspace zoning
equivalent of an online 'red light district,' this legislation creates an
Internet playground, a top level domain that is kids friendly from the
start." See, Markey
The bill provides that "... the Secretary of Commerce, acting through the
National Telecommunications and Information Administration, shall (1) pursuant
to the authority under section II.B. of the Memorandum of Understanding Between
the U.S. Department of Commerce and the Internet Corporation for Assigned Names
and Numbers, ... jointly with ICANN, develop a plan ... for ICANN to establish
the new domain ..." The bill continues that "The new domain shall be
established as a top-level, International domain having a domain name
appropriate for its purpose" and "shall be available for voluntary use
as a location only of material that is considered suitable for minors and shall
not be available for use as a location of any material that is harmful to
7/24. The Kaiser Family Foundation (KFF)
announced that it conducted a public opinion poll on the V-Chip. It found that
40% of American parents now own a TV equipped with a V-Chip. However, only 17%
of parents who own a V-Chip – or 7% of all parents – are using it to block
programs with sexual or violent content. See, KFF release.
7/25. Rep. Clifford Stearns (R-FL)
spoke in the House about the KFF report. He stated that "Some of my
colleagues are quick to rely on government as a panacea for all of our problems.
Yesterday's report reveals that the long arm of government regulation is no
substitute for good parenting."
Rep. Paul Introduces Privacy Bill to Ban Certain Medical
7/24. Rep. Ron Paul (R-TX) and others
2615, the Patient Privacy Act of 2001. The bill provides that, subject to
certain enumerated exceptions, "no Federal funds may be spent to develop or
implement any database or other system of records containing personal medical
information of any United States citizen, or to collect medical records for the
purpose of storing them in a database or other system of records." The bill
was referred to the House Ways and
House Judiciary Committee Approves USPTO Authorization Bill
7/24. The House Judiciary Committee
amended and reported HR 2047, the
Patent and Trademark Office Authorization Act of 2002. The bill provides that
"There are authorized to be appropriated to the United States Patent and
Trademark Office for salaries and necessary expenses for fiscal year 2002 an
amount equal to the fees collected in fiscal year 2002 ..." The committee
adopted two minor technical amendments, and the bill as amended, without debate,
by unanimous voice votes.
is funded entirely out of fees collected from users. However, for several years
the appropriations committees have been diverting some of these fees to
subsidize other government programs. This practice is opposed by intellectual
property owners, high tech companies, and members of the House Subcommittee on
Courts, the Internet, and Intellectual Property. This authorization bill does
not provide for diversion of user fees.
House Holds Hearing on Counterfeit Currency
7/24. The House Financial
Services Committee's Domestic and Monetary Policy, Technology and Economic
Growth Subcommittee held a hearing on the security and design of currency.
Daniel Snow of the Counterfeit Division of the U.S. Secret Service stated in his prepared testimony
[PDF] that "With reprographic equipment, computers, and computer software
continuing to become more sophisticated and affordable, counterfeiters have been
able to increase both the volume and the quality of their product. ... In
response to this growing problem, the Secret Service is pursuing legislative
changes to counterfeiting statutes that clearly define the fraudulent use of
digital images as a violation of law." See also, prepared statement
[PDF] of Rep. Mike Oxley (R-OH),
Chairman of the full committee.
McAfee Granted Patent Related to Selling Software over the
7/24. The USPTO granted U.S.
Patent No. 6,266,774 to McAfee titled
"Method and system for securing, managing or optimizing a personal
computer." It discloses a "system, method, and computer program
product for delivery and automatic execution of security, management, or
optimization software over an Internet connection to a user computer responsive
to a user request entered via a web browser on the user computer."
McAfee P/CEO Srivats Sampath said in a release
on August 6 that "this patent further reinforces our belief that the future
lies in software applications being delivered online as web services to users
around the world. This patent also reinforces our first mover advantage by
securing our foothold in this space." Sampath and others are the inventors;
McAfee is the assignee of the patent.
7/24. Rep. Henry Hyde (R-IL) and others
introduced HR 2602, a bill to extend the Export Administration Act until
November 20, 2001.
7/24. Rep. Bill Thomas (R-CA)
introduced HR 2603, a bill to implement the agreement establishing a U.S. Jordan
free trade area.
7/24. Rep. Mitch McConnell (R-KY)
introduced S 1232, a bill to provide for the effective punishment of online
child molesters, by removing the requirement of interstate travel.
People and Appointments
7/24. Napster announced that Konrad
Hilbers has replaced Hank Barry as CEO. See, Napster release.
7/24. The Senate Banking Committee
unanimously approved the nomination of Harvey Pitt to be Chairman of the Securities and Exchange Commission (SEC). See, release.
7/24. Thomas Navin was named a Deputy Chief of the FCC's Wireless Telecommunications Bureau's Policy
Division. Navin was previously an Attorney Advisor in the Common Carrier
Bureau's Policy and Program Planning Division. He was the team leader on SBC's
Missouri Section 271
application. Navin previously worked as an associate in the law office of McDermott Will & Emery in its regulatory
7/24. The Office of Science and Technology Policy (OSTP) and the National
Security Council (NSC) published a notice
of proposed rule making in the Federal Register regarding removing their
regulation on Emergency Restoration Priority Procedures for Telecommunications
Services. Comments are due by August 20, 2001. See, July 24, 2001, Vol. 66, No.
142, at Pages 38411 - 38412.
7/24. The U.S.
Court of Appeals (FedCir) issued its opinion in In
Re Roemer, a patent interference case involving to U.S.
Patent No. 4,737,716, which pertains to nuclear magnetic resonance imaging. The
Court of Appeals reversed in part, vacated in part, and remanded.
Adobe Advocates Release of eBook Cracker
7/23. Adobe recommended the release of
Dmitry Sklyarov from jail. The U.S. Attorney's Office (NDCal) charged Dmitry
Sklyarov by criminal
complaint [PDF] with one count of trafficking in a product designed to
circumvent copyright protection measures in violation of the Digital Millennium
Copyright Act (DMCA). See, 17 U.S.C. § 1201.
The complaint states that Sklyarov developed for sale and distribution a program
that can convert Adobe's eBooks into naked files that can be read, copied, and
stored on any computer.
Colleen Pouliot, SVP and General Counsel for Adobe, said in a release
that "the prosecution of this individual in this particular case is not
conducive to the best interests of any of the parties involved or the industry.
ElcomSoft's Advanced eBook Processor software is no longer available in the
United States, and from that perspective the DMCA worked. Adobe will continue to
protect its copyright interests and those of its customers."
Bill Would Create Telework Tax Credits
7/23. Rep. Scott McGinnis (R-CO)
and others introduced HR 2597, the
Broadband Deployment and Telework Incentive Act of 2001. The bill would amend
the Internal Revenue Code to provide an employer telework tax credit, and a
telework equipment tax credit. The bill was referred to the House Ways and Means Committee.
Employer Telework Tax Credit. The bill provides that "the employer
telework tax credit for any taxable year is equal to $500 for each employee who
participates in an employer sponsored telework arrangement during the taxable
Telework Equipment Tax Credit. The bill provides that the "telework
equipment tax credit for any taxable year is equal to 10% of qualified telework
expenses paid or incurred during the taxable year by either the employer on
behalf of the employee, or directly by the employee, pursuant to an employer
sponsored telework arrangement."
To qualify, the employee must "telework for a minimum of 25 days per
taxable year." Qualified expenses include "expenses paid or incurred
for computers, computer- related hardware and software, modems, data processing
equipment, telecommunications equipment, and access to Internet or broadband
technologies, including applicable taxes and other expenses for the delivery,
installation, or maintenance of such equipment." Finally, telework is
defined as "work functions at locations other than the traditional work
place of the employer thereby eliminating or substantially reducing the physical
commute to and from that traditional work place."
Copyright Office to Hold Arbitration Proceeding on Webcasting
Rates and Terms
7/23. The Copyright Office (CO)
published a notice
of initiation of arbitration proceeding in the Federal Register regarding
webcasting of digital sound recordings. The notice states that the CO "is
announcing the initiation of and schedule for the 180-day arbitration period to
set the rates and terms for two compulsory licenses. One license allows certain
eligible nonsubscription services to perform sound recordings publicly by means
of digital audio transmissions and the other allows a transmitting organization
to make an ephemeral recording of a sound recording for the purpose of making a
permitted public performance." The proceedings will begin with opening
statements on July 30, 2001. Presentation of direct cases is scheduled for July
31 through September 13. See, Federal Register, July 23, 2001, Vol. 66, No. 141,
at Pages 38324 - 38326.
Copyright Office Issues NPRM
7/23. The Copyright Office (CO)
published a notice
of proposed rule making in the Federal Register regarding rates and terms for
the digital performance of sound recordings. The CO requests comment on proposed
regulations that will govern the RIAA collective when it functions as the
designated agent receiving royalty payments and statements of accounts from
nonexempt, subscription digital transmission services which make digital
transmissions of sound recordings under the provisions of Section 114 of the
Copyright Act. Comments are due by August 22, 2001. See, Federal Register, July
23, 2001, Vol. 66, No. 141, at Pages 38226 - 38229.
House Passes DOJ Appropriations Authorization Bill
7/23. The House passed HR 2215, the
21st Century Department of Justice Appropriations Authorization Act, by a voice
vote. The bill authorizes $3,507,109,000 for the FBI and $140,973,000 for the
Antitrust Division. It also requires the DOJ to report to the Congress on its
use of Carnivore, and to appoint a Deputy Inspector General to oversee the
Carnivore. The bill provides, at Section 306, that the DOJ must provide
detailed reports to the Congress regarding its use of the Internet surveillance
systems known as both "Carnivore" and "DCS 1000". The bill
requires that for FY 2001 and FY 2002 "the Attorney General and the
Director of the Federal Bureau of Investigation shall provide to the Judiciary
Committees of the House of Representatives and Senate a report detailing -- (1)
the number of times DCS 1000 was used for surveillance during the preceding
fiscal year; (2) the Department of Justice official or officials who approved
each use of DCS 1000; (3) the criteria used by the Department of Justice
officials to review requests to use of DCS 1000; (4) a complete description of
the process used to submit, review, and approve requests to use DCS 1000; (5)
the specific statutory authority relied on to use DCS 1000; (6) the court that
authorized each use of DCS 1000; (7) the number of orders, warrants, or
subpoenas applied for, to authorize the use of DCS 1000; (8) the fact that the
order, warrant, or subpoena was granted as applied for, was modified, or was
denied; (9) the offense specified in the order, warrant, subpoena, or
application; and (10) the nature of the facilities from which, or the place
where the contents of, electronic communications were to be disclosed."
Inspector General. The bill also provides, at Section 304, in part, that
"The Inspector General of the Department of Justice shall appoint a Deputy
Inspector General for the Federal Bureau of Investigation who shall be
responsible for supervising independent oversight of programs and operations of
the Federal Bureau of Investigation until September 30, 2004." Rep. James Sensenbrenner (R-WI),
Chairman of the House Judiciary
Committee, stated in a release that "This
position is necessary because of the recent spy scandal, the FBI's failure to
comply with the document disclosure agreement in the McVeigh case, and now the
revelation about missing firearms and computers at our nation's number one crime
fighting agency. These problems cry out for attention, and I believe there needs
to be one person at the IG's office whose sole focus is the review of FBI
FEC Fines Tech PACs
7/23. The FEC
fined the Nortel Networks PAC, Cable & Wireless PAC, and Circuit City PAC
$1,000 each for failure to file reports pursuant to the Federal Election
Campaign Act. See, FEC
People and Appointments
7/23. Charlene Barshefsky joined the law firm of Wilmer Cutler & Pickering. She was
previously the U.S. Trade Representative. She
will focus on global business, investment, regulatory, and negotiating advice.
See, WCP release
7/23. Robert Novick joined the law firm of Wilmer Cutler & Pickering as a partner in
the Washington DC office. He was previously General Counsel in the Office of the
See, WCP release
7/23. Philip Beck joined the Antitrust
Division of the Department of Justice. He will take over as lead trial
counsel in the Microsoft antitrust case. He was previously a partner in the
Chicago office of the law firm of Bartlit
Beck. The DOJ release
announcing his appointment also referenced the DOJ's "successful
prosecution of the case to this point."
7/23. John Elwood joined the Criminal Division of the Department of
Justice as Counselor to the Assistant Attorney General Michael Chertoff. He
previously was a partner in the Washington DC office of the law firm of Baker Botts. See, BB release
7/22. Leaders of eight major democratic nations and Russia issued a Communiqué
at the conclusion of their summit meeting in Genoa, Italy. They agreed to
promote free trade and a new round of multilateral negotiations.
They wrote: "Open trade and investment drive global growth and poverty
reduction. That is why we have agreed today to support the launch of an
ambitious new Round of global trade negotiations with a balanced agenda."
The statement also addresses in vague language protecting intellectual
property rights and expanding the use of information technology.
Intellectual Property Rights. The Communiqué states that "Increased
market access must be coupled with the capacity to take advantage of it. Thus,
to help developing countries benefit from open markets, we will better
co-ordinate our trade related assistance to: provide bilateral assistance on ...
the protection of intellectual property rights ..." It also states that
"To promote further investments in the knowledge- based economy, we call on
the WTO and the World Intellectual Property Rights Organisation, in
collaboration with the World Bank, to help the poorest countries comply with
international rules on intellectual property rights."
Promoting Use of IT. The Communiqué states that "we will work to
expand the use of information and communications technology (ICT) to train
teachers in best practices and strengthen education strategies. We especially
encourage the private sector to examine new opportunities for investment in
infrastructure, ICT and learning materials. ... ICT holds tremendous potential
for helping developing countries accelerate growth, raise standards of living
and meet other development priorities. ... We also encourage development of an
Action Plan on how e-Government can strengthen democracy and the rule of law by
empowering citizens and making the provision of essential government services
Go to News Briefs from July 16-20, 2001.