|News Briefs from
September 1-5, 2001
FBI Executes Search Warrant on Islamic ISP
9/5. The FBI executed a sealed search warrant at the offices of Internet service
provider InfoCom Corporation, in a suburb north of Dallas, Texas.
Several Islamic groups held a press conference to criticize the action. The Council on American Islamic Relations (CAIR)
and others issued a release
in which they stated that "Early yesterday morning, more than 80 agents
from the FBI, INS, Customs Service, and other federal agencies raided the
offices of Infocom Corporation in Richardson, Texas." It added that "Infocom
hosts web sites for some 500 companies worldwide", including a number of
Middle Eastern web sites. CAIR also described the action as an "anti Muslim
On August 13 the Wall Street Journal published an opinion piece by Daniel Pipes
and Steven Emerson which stated that "The very existence of both Hamas and
Islamic Jihad is largely attributable to organizing and funding from individuals
living in the U.S." The piece then went on to discuss the use of web sites
based in the U.S.
JCS Chairman Testifies on 3G
9/5. General Henry Shelton,
Chairman of the Joint Chiefs of Staff,
testified to the Senate
Appropriations Committee's Subcommittee on Defense on a wide range of
issues, including reallocating of spectrum currently used by the military for
use by Third Generation (3G) wireless services. See, prepared
He stated that "I am concerned that further reallocation of frequency
spectrum for commercial use, without comparable spectrum to execute DoD's
critical functions, will have a major impact on our ability to execute our
missions. Our success on the battlefield largely depends on our ability to use
advanced communications technology to exchange vital information between
decision-makers, commanders, and deployed forces."
One of the spectrum bands being proposed for reallocation is the 1755-1850 MHz
band, currently used by the military. General Shelton stated that "this
proposal is problematic for two reasons. First, according to our analysis,
sharing with commercial users is not possible due to interference over large
geographical areas and metropolitan centers. Second, moving DoD communications
to a different, but comparable, spectrum could be problematic due to the lengthy
transition period required."
His prepared testimony on 3G spectrum on September 5 was identical to his
prepared testimony on 3G spectrum to the House Armed Services Committee on June
House Passes Patent Bills
9/5. The House passed by voice votes three non controversial intellectual
property related bills -- HR 1866, HR 1886, and HR 2048. HR
1866 overturns the 1997 opinion of the U.S.
Court of Appeals (FedCir) in In Re Portola
Packaging, in which the Court held that the restriction on the scope of patent
reexaminations to "substantial new questions" precludes the
consideration of prior art that was before the examiner. The key language of the
HR 1866 amends 35 U.S.C. §§ 303(a) and 312(a). It adds the following:
"The existence of a substantial new question of patentability is not
precluded by the fact that a patent or printed publication was previously cited
by or to the Office."
HR 1886 affords all participants, including third party requesters, in
reexamination proceedings, judicial review before federal appeals courts. HR
2048 requires the Attorney General to submit a report to the House and Senate
Judiciary Committees regarding the effectiveness of State Justice Institute
9/5. The USPTO published a notice
in the Federal Register regarding its notice of proposed rulemaking (NPRM)
pertaining to requirements for claiming the benefit of prior filed applications
under 18 month publication of patent applications. Comments are due by October
5, 2001. See, Federal Register, September 5, 2001, Vol. 66, No. 172, at Pages
46409 - 46415.
9/5. The USPTO published the September
issue of the PTO
Pulse in its web site.
AAI Questions HP Compaq Merger
9/5. The American Antitrust
Institute released a statement regarding
the proposed merger of HP and Compaq in which it asserted that "The
proposed merger threatens to lessen competition in a number of ways. First, it
will altogether eliminate competition between two of the three largest firms.
Second, there is widespread speculation that the remaining firms in the industry
will for strategic reasons seek merger partners to offset the combined
HP/Compaq's new power with retailers and suppliers. If there is likelihood that
this gigantic merger event will trigger a rapid consolidation of the industry,
then the government should intervene."
Video Competition and Broadband Internet Access
9/5. September 5 was the deadline to file reply comments with the FCC in its
Notice of Inquiry (NOI) regarding video competition. The NRTC submitted a comment
[PDF] in which it stated the "the cable industry is limiting its broadband
offerings almost exclusively to metropolitan areas" and that
"Satellite distribution technology -- not cable -- represents the best
option available to provide High speed Internet Access as well as local
television service throughout rural America." It further argued that the
FCC should take steps to promote access in rural areas. Similarly, Northpoint and Broadwave jointly submitted a comment
[PDF] in which they argued that the multichannel video program distribution (MVPD)
"marketplace is currently bereft of competitive alternatives" and that
DBS providers and others are trying to delay deployment of Northpoint's
technology, which they assert will provide MVPD, local TV, and broadband
Internet access to rural areas at affordable prices.
The NCTA submitted a comment
[PDF] in which it concluded that "Despite the annual protestations of
competitors seeking artificial regulatory boosts from the Commission, the
evidence of full and effective competition among providers of video programming
is compelling. Competition has arrived, it is here to stay, and the Commission
should say so ..." AT&T submitted a comment
[PDF] in which it argued that the MVPD market is not dominated by cable.
On June 20, 2001 the FCC adopted a NOI into the status of competition in the
market for the delivery of video programming. The FCC stated in a release
that "The NOI seeks information that will allow the FCC to evaluate the
status of competition in the video marketplace, prospects for new entrants to
that market, and its effect on the cable television industry and consumers. The
NOI also solicits information regarding the extent to which consumers have
choices among video programming distributors and delivery technologies."
See, CS Docket No. 01-129.
USAO SDNY Forms CHIPs Unit
9/5. The U.S. Attorney's Office (SDNY) announced the
formation of a Computer Hacking and Intellectual Property (CHIPs) unit,
comprised of five Assistant U.S. Attorneys specializing in computer and
intellectual property crimes. The unit will focus on computer intrusions,
Internet and computer fraud, theft of trade secrets and economic espionage,
theft of computer and high tech equipment components, criminal copyright and
trademark offenses, and other forms of computer, Internet, and electronic
crimes. See, USAO
On July 20, 2001, Attorney General John Ashcroft announced that eight CHIPs
would be formed. The other locations for new CHIPs units are CDCal (Los
Angeles), SDCal (San Diego), NDGa (Atlanta), DMass (Boston), NDTex (Dallas),
WDWash (Seattle), and the EDVa (Alexandria, Virginia). The NDCal (San Francisco)
already had a CHIPs unit. See, Ashcroft speech.
Report Opposes New Privacy Legislation
9/5. The Pacific Research Institute
released a report
titled "Consumer Privacy: A Free Choice Approach." The report
concludes that "New laws governing the collection of consumer information
are not needed to bolster electronic commerce, protect businesses from state
government legislation, or to emulate other countries. Instead, new information
restrictions would usurp consumer choice, drive up prices for consumers, and
strangle business, especially small business, with red tape."
The report, which was written by Sonia Arrison, also concludes that "The
FTC's Fair Information Practice Principles (FIPPs) are unnecessary, costly, and,
worst of all, may wind up giving consumers less privacy. One of the worst
potential unintended consequences of the FIPPs is that consumers, under the
impression that the government is protecting them, will lose interest in the
technologies that protect privacy."
California Court Rejects Filed Rate Doctrine Defense in
9/5. The California
Court of Appeal (3rd) issued its opinion [PDF]
v. AT&T, a slamming case. Lovejoy filed a complaint in
California state court against AT&T alleging fraud in connection with the
unauthorized switching of a telecommunications carrier. Lovejoy alleged that
AT&T falsely asserted that he had authorized the switching of his 800
service, and then terminated the service, reassigned his number, and ruined his
business. AT&T moved for judgment on the pleadings, arguing that the
conduct plead by Lovejoy does not constitute actionable fraud, and that the
action is barred by the filed rate doctrine. The trial court dismissed the case
based in its interpretation of the law of fraud. Lovejoy appealed. The Court of
Appeal, addressing both the fraud issues and the filed rate doctrine, reversed
Shapiro Named Interim US Atty for ND California
9/5. The Department of Justice announced the appointment of David Shapiro as the
interim United States Attorney for the Northern District of California. See, USAO
Kermit the Frog Joins FCC
9/5. The FCC announced that "The Hallmark Channel, in association with The
Jim Henson Company, has donated the Kermit the Frog image to the FCC for use in
a promotional campaign to bring attention to the availability of the
V-Chip." Meanwhile, Commissioner Gloria Tristani's last day at the FCC is
Friday, September 7. She has chaired the FCC's V-Chip Task Force since its
creation in May of 1999, and has served as the FCC's spokesman on V-Chip
matters. Tristani stated that "The critical next step for the V-Chip is
creating greater awareness among parents of the V-Chip technology and the
ratings system for television programming." Her replacement was not
immediately available for comment. See also, FCC
9/5. The Senate Intelligence
Committee cancelled its hearing on the information leak provisions of
the FY 2002 Intelligence Authorization Bill.
9/4. A grand jury of the U.S. District
Court (CDCal) returned an indictment against Gregory Howearth for interstate
travel for the purpose of having sex with a minor and use of the Internet to
entice a minor to engage in illegal sexual activity. Howearth had communicated
in an Internet chat room with an undercover law enforcement officer who posed as
a thirteen year old. See, USAO release.
Senate Begins Debate on Export Administration Act
9/4. The Senate returned from its August recess, and began debate on S 149, the
Export Administration Act of 2001. The bill is a major overhaul of export
control laws. It passed the Senate
Banking Committee on March 22, 2001, by a vote of 19 to 1. It would ease
restraints on the export of most dual use products, such as computers and
software. However, it would raise penalties for violation of remaining
prohibitions. It would also repeal 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.
The bill is sponsored by Sen. Mike Enzi
(R-WY). It is supported by Sen. Paul
Sarbanes (D-MD), the Chairman of the Senate Banking Committee, Sen. Phil
Gramm (R-TX), the ranking Republican on the Committee, and by President Bush.
However, it is opposed by a small faction in the Senate led by Sen. Fred
Thompson (R-TN), Sen. John Warner (R-VA), and Sen. Richard Shelby (R-AL).
The Senate defeated, by a vote of 74 to 19, an amendment offered by Sen. Fred Thompson (R-TN) that would have
increased the power of agencies to delay license applications for an additional
60 days. This amendment would have allowed reviewing agencies to extend the time
limits on reviewing export license applications if they determined that
"due to the complexity of the analysis" or "because of the
potential impact on the national security or foreign policy interests of the
United States" a further delay is warranted. Under current law, and
S 149, an exporter wishing to export an item on a control list must apply
for a license. The application must be sent to the Secretary of Commerce, who
then refers it to other interested departments. The agencies must provide a
recommendation to approve or deny the license within 30 days of that referral.
S 149 also contains six specific circumstances in which further time may be
taken. Sen. Enzi argued that passage of the Thompson amendment would
"significantly undermine the discipline of the entire review process, and
effectively create gridlock".
Secretary of State Colin Powell, Secretary of Defense Donald Rumsfeld, and
Secretary of Commerce Donald Evans wrote a letter to Sen. Trent Lott (R-MS), the Republican
Majority Leader, urging passage of the bill. "President Bush strongly
supports the bill as passed by the Senate Banking Committee and wants to move
forward in this important area. We urge you to support S. 149," the three
The current Export Administration Act was scheduled to lapse on August 20.
However, President Bush issued an Executive
Order on August 17 extending it. President Bush also wrote a letter
to the Speaker of the House of Representatives and the President of the Senate
regarding this decision.
Sen. Gramm Announces Retirement
9/4. Sen. Phil Gramm (R-TX) announced
that he will not run for re-election in the 2002 election. Sen. Gramm is the
ranking Republican on the Senate
Banking Committee. He has been involved in many technology related debates.
He is a strong supporter of the Export Administration Act of 2001, which is
currently being debated by the full Senate. His retirement may open the way for Sen. Richard Shelby (R-AL) to become either
ranking Republican or Chairman of the Committee. Sen. Shelby is an an opponent
of the bill.
In the 104 and 105th Congresses Sen. Gramm supported and moved legislation to
limit meritless class action securities litigation against technology companies.
See, the Private Securities Litigation Reform Act of 1995 (PSLRA), and the
Securities Litigation Uniform Standards Act of 1998 (SLUSA).
The landmark Gramm Leach Bliley Act carries Sen. Gramm's name. This landmark
legislation removes New Deal era restrictions on affiliations among banks,
securities firms, and insurance companies. It also contains new privacy
provisions regarding non-public personal information.
Finally, while immigration issues do not fall within the jurisdiction of the
Senate Banking Committee, Sen. Gramm has been an advocate of amending visa laws
to enable companies to hire highly skilled technology workers from other
Rep. Horn Announces Retirement
9/4. Rep. Steve Horn (R-CA) announced
that he will not run for re-election. The California legislature, which is
controlled by Democrats, redrew district lines to eliminate his district. He is
Chairman of the House Reform Committee's Subcommittee on Government
Management, Information and Technology. During the 105th Congress his
subcommittee issued low grades to government agencies on their level of computer
security, and studied Year 2000 conversion efforts of government agencies. See, Horn
Bush Announces 13 U.S. Attorneys
9/4. President Bush announced his intent to nominate 13 U.S. Attorneys. Among
these is the nomination of Thomas DiBiagio for the District of Maryland.
DiBiagio is currently a partner in the Washington DC law firm of Dyer Ellis & Joseph. From 1991 to 2000
he was Assistant U.S. Attorney for the District of Maryland. See, White
House release and Dyer
The other nominations are as follows: William Duffy (Northern District of
Georgia), Maxwell Wood (Middle District of Georgia), Edward Kubo (District of
Hawaii), Steven Colloton (Southern District of Iowa), Donald Washington (Western
District of Louisiana), Jeffrey Collins (Eastern District of Michigan), Gregory
Lockhart (Southern District of Ohio), Sheldon Sperling (Eastern District of
Oklahoma), Mary Beth Buchanan (Western District of Pennsylvania), Daniel Bogden
(District of Nevada), Peter Hall (District of Vermont), Thomas Johnston
(Northern District of West Virginia).
9/4. Malcolm Wittenberg plead guilty in U.S.
District Court (NDCal) to one count of insider trading, in violation of 15
U.S.C. §§ 78j and 78ff. The Plea
Agreement [PDF] states that Wittenberg learned of a pending merger of Sun Microsystems and Forte Software in the course
of his representation of Forte. He then traded in Forte Software stock.
Wittenberg admitted that he used material, non public information when he
purchased stock in Forte Software. The plea agreement also states that
Wittenberg at all relevant times was an attorney and partner in the San
Francisco office of the Oakland law firm of Crosby Heafey Roach & May. Wittenberg
has left the firm, but the firm web site lists him as "of counsel". It
further states that he "currently represents clients in all aspects of
acquiring and protecting patents and trademarks. He also has extensive
experience in technology licensing and product distribution, representing
clients in both domestic and international transactions." See also, April
16, 2001 two count indictment
[PDF] and September 4, 2001 USAO
Federal Reserve and XML
9/4. Ferguson also gave a speech
at the Federal Reserve Bank of Philadelphia
titled "The Evolving Financial and Payment System". He stated that
"accelerating changes in technology have created new financial products and
services as well as whole new ways of conducting financial business." He
stated that XML, or extensible markup language, "is becoming
increasingly important in the financial markets and that it raises interesting
possibilities for the future." The Federal Reserve Board's Payments System
Development Committee held a one day workshop in June on the implications of XML
for the payment system.
9/4. Robert Mueller begins as Director of the FBI.
9/4. Kenneth Wilson
joined the Menlo Park office of the law firm of Perkins Coie (PC) as a partner in the
firm's intellectual property practice. Wilson handles patent, copyright,
trademark, trade secret and other technology related litigation, and counsels
high tech companies on intellectual property matters. Wilson was previously a
partner in the Palo Alto office of the law firm of Wilson
Sonsini. See, PC release.
9/4. The Senate Finance
Committee reported S 643, a
bill to implement the agreement establishing a U.S. Jordan free trade area.
See, Rept. No. 107-59.
9/4. National Science Foundation (NSF)
published a notice
in the Federal Register that the Advisory Committee for Cyberinfrastructure
will hold a meeting on September 14, 2001, from 2:00 - 5:00 PM, at Room 1150,
National Science Foundation, 4201 Wilson Boulevard, Arlington, Virginia. The
purpose of this meeting is to develop a plan for the preparation of a report to
the NSF regarding advanced cyberinfrastructure and the evaluation of the
existing Partnerships for Advanced Computational Infrastructure. See, Federal
Register, September 4, 2001, Vol. 66, No. 171, at Page 46293.
9/4. The Copyright Office (CO)
published a notice
in the Federal Register that it is extending the period for filing comments
regarding the determination of reasonable rates and terms for the digital
performance of sound recordings. The CO is extending the period to file
comments to 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 § 114 of the
Copyright Act. Comments and Notices of Intent to Participate in a Copyright
Arbitration Royalty Panel Proceeding are due by September 19, 2001. See, Federal
Register, September 4, 2001, Vol. 66, No. 171, at Page 46250.
WIPO Releases Second Report on Rights in Domain Names
9/3. The WIPO released its report (and executive
summary) titled "The Recognition of Rights and the Uses of Names in the
Internet Domain Name System: Report of the Second WIPO Internet Domain Name
Process." The first WIPO report on the domain name process addressed
trademarks and domain names. It recommended the establishment of the existing
dispute resolution procedure to deal with disputes concerning the bad faith
registration and use of trademarks as domain names. This second report addresses
International Nonproprietary Names (INNs) for pharmaceutical substances, names
and acronyms of international intergovernmental organizations (IGOs), personal
names, geographical identifiers, and trade names which are the names used by
enterprises to identify themselves.
INNs. The report recommended that "a simple mechanism be established
which would protect INNs against identical domain name registrations."
IGOs. The report recommended that "States, as the constituents of
IGOs, should work towards the establishment of an administrative dispute-
resolution procedure, akin to the UDRP, where
an IGO could bring a complaint that a domain name was the same or confusingly
similar to the name or acronym of the IGO, that it has been registered without
legal justification and that it is likely to create a misleading association
between the holder of the domain name registration and the IGO in
Personal Names. The report concluded that "it was found that there
are no existing international norms dealing with their protection and that
national legal systems provide for a wide diversity of legal approaches to their
protection ... it is suggested that the international community needs to decide
whether it wishes to work towards some means of protection of personal names
against their abusive registration as domain names."
Geographical Identifiers. The report states that there is
"considerable evidence of the widespread registration of the names of
countries, places within countries and indigenous peoples as domain names by
persons unassociated with the countries, places or peoples. However, these areas
are not covered by existing international laws and a decision needs to be taken
as to whether such laws ought to be developed."
Trade Names. The report recommended that no action be taken to protect
HP to Purchase Compaq
9/3. Hewlett Packard and Compaq Computer announced a definitive merger
agreement. Carly Fiorina, currently C/CEO of HP, will continue as C/CEO of the
merged entity. Michael Capellas, C/CEO of Compaq, will be President. HP stated
in a release
that "Under the terms of the agreement, unanimously approved by both Boards
of Directors, Compaq shareowners will receive 0.6325 of a newly issued HP share
for each share of Compaq, giving the merger a current value of approximately $25
billion. HP shareowners will own approximately 64% and Compaq shareowners 36% of
the merged company. The transaction, which is expected to be tax-free to
shareowners of both companies for U.S. federal income tax purposes, will be
accounted for as a purchase." The transaction is subject to regulatory and
shareholder approvals. See also, Compaq release.
Go to News Briefs from August 26-31.