FTC and DOJ Divide Antitrust Merger Review Authority
3/5. The Federal Trade Commission (FTC) and
the Department of Justice's (DOJ) Antitrust
Division announced that they have entered into a Memorandum of Agreement
concerning clearance procedures for merger reviews and other antitrust matters.
The agreement attempts to define, by industry, which transactions will be
reviewed by which agency. Both the FTC and DOJ have statutory authority to
conduct antitrust merger reviews. See also, FTC release.
The agreement states that the FTC will have responsibility for "Computer
Hardware", which it defines as "Matters involving computer hardware do
not become matters involving computer software, for purposes of this allocation,
merely because software is being shipped with the hardware. In matters involving
both hardware and software, clearance will be determined on the basis of the
market in which the competitive effects being investigated are predominantly
likely to occur." The FTC would also be assigned transactions involving
"Professional Services" and "Satellite Manufacturing and Launch,
and Launch Vehicles".
The agreement assigns to the DOJ's Antitrust Division transactions involving
"Computer Software", which it defines as "Matters involving
computer software do not become matters involving computer hardware, for
purposes of this allocation, merely because the software is being shipped with
hardware. In matters involving both hardware and software, clearance will be
determined on the basis of the market in which the competitive effects being
investigated are predominantly likely to occur."
The agreement also gives the DOJ "Media and Entertainment", which it
states "Includes cable services, satellite services, television and radio
broadcasting, publishing, newspapers, magazines, movies, movie theaters and
upstream video distribution, advertising, music, toys and games, gaming, and
sports".
The agreement also gives the DOJ "Telecommunications Services and
Equipment", which it states "Includes set-top boxes, cable plant and
related infrastructure, satellite data and programming, communications
infrastructure, and telecommunications equipment (e.g., telephones, pagers,
switches, Internet backbone, telephone cable)".
Finally, the agreement assigns to the DOJ "Financial Services/ Insurance/
Stock and Option, Bond, and Commodity Markets" and "Defense
Electronics".
The FTC and DOJ had previously reached a similar agreement in January. However,
they delayed formal announcement, due to opposition from Sen. Ernest Hollings (D-SC), Chairman of
the Senate Commerce Committee.
A third federal government entity, the Federal
Communications Commission (FCC), conducts license transfer proceedings,
which in the case of some major mergers involving communications and technology
companies, are in the nature of antitrust merger reviews. The agreement between
the FTC and DOJ does not affect these duplicative reviews.
Charles James, Assistant
Attorney General in charge of the Antitrust Division, stated in a release that
"Allocating industry sectors in a more rational manner will enable the
Department to investigate more efficiently possible anticompetitive conduct
affecting consumers and will provide greater certainty to the business
community, all of which is good for consumers."
The agreement also provides that "Nothing in this Memorandum in any way
shall limit either agency in making an independent decision regarding what
investigations it will undertake or in fulfilling its statutory
responsibilities", and that "This Memorandum does not confer on any
person any enforceable right or benefit."
The agreement also leaves uncertainty as to which agency would review certain
transactions, an uncertainty that will increase as industries converge. For
example, the agreement assigns computer hardware companies to the FTC, but
assigns computer software companies to the DOJ. Similarly, the agreement assigns
hardware companies to the FTC, and telecom equipment companies to the DOJ, even
though there is already substantial convergence of these two sectors.
The agreement addresses such uncertainties. It states that "The agencies
anticipate continued convergence between certain telecommunications and
information technologies. In order to address clearance issues that arise as a
result of such convergence, each agency will appoint two representatives to form
an inter agency ``Convergence Committee´´ that will be tasked with
recommending" further refinements to the division authority.
3rd Circuit Reverses Local Zoning Board's Denial of Permit for
Cell Tower
3/5. The U.S.
Court of Appeals (3rdCir) issued its opinion in Nextel
v. Unity Township, case involving a wireless phone company's
efforts to obtain authority from a local zoning board to construct a radio tower
on private land, to eliminate a gap in its cell phone service. The local
authority denied permission. The District Court ruled for the local authority.
The Appeals Court reversed and remanded.
Background. Nextel Communications sought to eliminate a gap in its
service along Route 30 in western Pennsylvania. It requested a variance from
Unity Township in order to build a 250 foot radio tower on a private farm that
is in an area zoned residential. Unity denied the request. Nextel filed a
complaint in U.S. District Court (WDPenn) against Unity. The District Court held
that Nextel's claim had been mooted by an amendment to the original ordinance
upon which the denial was based.
Court of Appeals. Nextel appealed. It argued that the zoning ordinance
had the effect of prohibiting all wireless telecommunications towers in the
Township, and that the Unity Township's disparate treatment of Nextel and a
competitor constituted "unreasonable discrimination", in violation of
the Communications Act of 1934 (TCA), at 47 U.S.C. § 332(c)(7)(B)(i).
The Appeals Court rejected the mootness argument. It then reversed, and held
that "the case is remanded for three fact specific determinations: (1)
whether the service gap was suffered by all wireless providers or only Nextel,
(2) whether erecting a tower at the farm site proposed by Nextel was the least
intrusive means for covering the gap in service along U.S. Route 30, and (3)
whether the Township's discrimination between Nextel and Sprint was
unreasonable. If the District Court finds that no provider was covering the
service gap and that the farm site was the least intrusive means of covering
that gap, or it finds that the Township's discrimination was unreasonable, then
Nextel is entitled to remedies available under the TCA."Rep. Sensenbrenner Backs FTC DOJ Agreement
3/5. Rep. James Sensenbrenner
(R-WI), the Chairman of the House
Judiciary Committee, announced his support for the Memorandum of Agreement
between the Federal Trade Commission (FTC) and
the Department of Justice's (DOJ) Antitrust
Division concerning clearance procedures for merger reviews and other
antitrust matters. The Judiciary Committee has jurisdiction over antitrust
matters.
Rep. Sensenbrenner stated in a release that "I
support this sound plan for how antitrust issues will be handled by the DOJ and
FTC. I believe it promotes a more efficient use of DOJ and FTC antitrust
resources in addition to reducing unnecessary and duplicative burdens placed
upon employees and employers. Furthermore, this plan offers a `win-win´ by
assigning antitrust areas based upon the particular agency's experience and
expertise."
The agreement defines, by market, which transactions will be reviewed by which
agency. For example, the FTC will have responsibility for transactions involving
companies that provide computer hardware, professional services, and satellite
manufacturing and launch, and launch vehicles. The DOJ will have responsibility
for transactions involving media and entertainment, telecommunications services
and equipment, and financial services.
So, perhaps, the two antitrust regulatory authorities have colluded to allocate
the market, and Rep. Sensenbrenner has justified their collusion on the basis
that it will increase efficiency.House Subcommittee to Mark Up Dot Kids Bill
3/5. The House Commerce Committee's
Subcommittee on Telecommunications and the Internet will mark up HR 3833
[PDF], the "Dot Kids Implementation and Efficiency Act of 2002", at
2:00 PM on Wednesday, March 6. This is the latest version of legislation
sponsored by Rep. John Shimkus
(R-IL) and Rep. Ed Markey (D-MA) to
require the creation of a top level domain restricted to content suitable for
minors.
The bill provides that "The NTIA shall require the registry selected to
operate and maintain the United States country code Internet domain to
establish, operate, and maintain a second level domain within the United States
country code domain that provides access only to material that is suitable for
minors and not harmful to minors".
The original bill of Reps. Shimkus and Markey, HR 2417,
would have required a "top-level, International domain". The
Subcommittee held a hearing on HR 2417 on November 1, 2001. See, TLJ Daily E-Mail Alert
No. 300, Nov. 2, 2001.
BXA Issues Wassenaar Rule Changes
3/5. The Commerce Department's Bureau of
Export Administration (BXA) issued rule
changes [PDF] pertaining to the Wassenaar Arrangement on Export Controls for
Conventional Arms and Dual Use Goods and Technologies. These rule changes revise
the Commerce Control List (CCL) to implement changes in Category 4 (Computers)
of the Wassenaar List of Dual Use Goods and Technologies, particularly with
respect to million theoretical operations per second (MTOPS) levels. The rule
changes are effective March 5, and will be published in the Federal Register on
March 8.
A Free Trading Nation
3/5. President Bush announced that he is imposing a 30% tariff on the
importation of certain steel products from certain countries. Speaking at a
joint press conference with Egyptian President Hosni Mubarak, Bush stated,
"we're a free trading nation".
The President's announcement follows, in part, a recommendation by the U.S. International Trade Commission. The
statutory authority for this action is Section 203(b) of the Trade Act of 1974, 19 U.S.C. § 2253.
See also, the President's Steel
Products Proclamation and White
House release.
This action does not apply to Canada, Israel, Jordan, and Mexico, the four
countries with which the U.S. has free trade agreements. Nor does it apply to
"a developing country that is a member of the World
Trade Organization (WTO), as long as that country's share of total imports
of the product, based on imports during a recent representative period, does not
exceed 3 percent".
U.S. Trade Representative (USTR) Robert
Zoellick explained it this way: "So the President believes that free trade
benefits America's consumers and families, and that it's vital to generating
jobs for America's workers, opening markets for American products and services,
and in spurring economic growth. But the President also recognizes that some
industries, workers and communities can't respond as quickly as one might wish
to the changes of a fast moving global economy. We all know that financial and
information markets move with lightening speed. But some traditional
manufacturing industries and the communities that depend on them cannot. Some
may need a breathing space to regain competitiveness. And this includes the
steel industry. The global steel industry has been rife with government
intervention, subsidies and protection. These unfair practices have hurt the
U.S. steel industry because our market has been much more open than
others." See, transcript
of press conference.
EU Trade Commissioner Pascal Lamy
responded that "The US decision to go down the route of protectionism is a
major setback for the world trading system. Imports are not the cause of US
difficulties and the measures announced today will not only not provide a
solution but aggravate matters. I fear today's short sighted move will end any
hope of finding an internationally agreed solution at the OECD to overcapacity
problems faced by the world steel industry, and will not rein in global
subsidies. The EU will of course launch an immediate complaint in Geneva against
this clear violation of WTO rules and we will take whatever measures are
necessary to safeguard our own market." See, EU release.
Samsung Sues SanDisk for Patent Infringement
3/5. Samsung
filed a complaint in U.S. District Court (EDTex) against SanDisk alleging
patent infringement. Samsung alleges infringement of four patents of which it is
the assignee: U.S. Patents Nos. 5,473,563
(titled Nonvolatile semiconductor memory), 5,514,889
(Non-volatile semiconductor memory device and method for manufacturing the
same), 5,546,341
(titled Nonvolatile semiconductor memory), and 5,642,309
(Auto-program circuit in a nonvolatile semiconductor memory device). Samsung
seeks injunctive and monetary relief.
Charles Van Orden, VP and General Counsel of SanDisk, stated in a release that "We believe
this lawsuit is a tactical move on Samsung's part in advance of the upcoming
expiration in August, 2002, of their patent cross license with SanDisk. We
intend to vigorously defend against this action."
Microsoft Opposes Government Imposed Copy Protection Standards
3/5. Microsoft published in its web site an essay
titled "Pirates of the Information Age". This essay states that
"Some believe government legislated standards for copy protection are the
way to go, but such a course could actually slow the development of new
solutions ..."
Microsoft continued that "There clearly is a need, however, for government
and industry to work together to fight the piracy problem. The White House is
including piracy enforcement in trade negotiations with foreign countries. Law
enforcement agencies, working in partnership with the high tech industry, are
becoming more aggressive and sophisticated in their efforts to curb software
theft. Microsoft and other software companies are undertaking worldwide
education campaigns to help businesses and consumers recognize counterfeit
software."
Microsoft also advocated "stronger anticounterfeiting laws, multilateral
cooperation, sustained resources and industry cooperation".
People and Appointments
3/5. Candi Wolff was named Assistant to the Vice President for
Legislative Affairs. From 1996 to 2000 she was Deputy Staff Director to the
Senate Republican Policy Committee. Before that, she was Legislative Counsel to
the Senate Steering Committee and Tax Counsel to former Sen. Malcolm Wallop
(R-WY). And before that, she was an associate in the Public Policy and Law
section of the law firm of Akin Gump. See, White
House release.
3/5. Amazon.com announced that Chief
Financial Officer Warren Jenson intends resign later this year. See, Amazon
release.
3/5. The Board of Directors of the Competitive
Telecommunications Association (CompTel) elected new officers. Richard
Burk (P/CEO of nii Communications) is the new Chairman; he replaces Doug
Hanson. Jerry James (President of Grande Communications) is the new Vice
Chairman; he replaces Drew Walker. Joseph Ambersley (EVP at PaeTec) is
the new Vice Chairman and Treasurer; he replaces Burk. See, CompTel release.
More News
3/5. Attorney General John
Ashcroft and Deputy Attorney General Larry Thompson held a press conference
to announce the creation of the Department of
Justice's National Security Coordination Council. See, transcript.
3/5. The Bureau of Export Administration (BXA)
updated its Denied
Persons List.
3/5. The Federal Communications Commission's
(FCC) Common Carrier Bureau announced that it is seeking nominations for a board
member position on the Universal
Service Administration Company's (USAC) Board of Directors. For more
information, contact Sheryl Todd at 202 418-7400.
3/5. The U.S. Department of Justice published a notice
in the Federal Register regarding the Tunney Act public comments that it
received relating to the Revised Proposed Final Judgment in U.S. v. Microsoft,
Civil Action No. 98-1232. See, Federal Register, March 5, 2002, Vol. 67, No. 43,
at Pages 9984 - 9985.
3/5. Sen. Charles Schumer (D-NY) and Sen. John Edwards (D-NC) introduced S 1989,
the National Cyber Security Defense Team Authorization Act.
Supreme Court Grants Cert in NextWave Case
3/4. The Supreme Court of the United
Stated granted certiorari in FCC v. NextWave and Arctic Slope v.
Nextwave. See, March 4 Order
List [PDF] at page 3. The grant may prolong litigation, and continue to tie
up spectrum that could be used to provide wireless phone service and Third
Generation (3G) wireless services.
NextWave obtained spectrum licenses at Federal
Communications Commission (FCC) auctions in 1996. The FCC permitted NextWave
to obtain the licenses, and make payments under an installment plan, thus
creating a debtor creditor relationship between NextWave and the FCC. NextWave
did not make payments required by the plan, and filed a Chapter 11 bankruptcy
petition. The FCC cancelled the licenses. It then proceeded to re-auction the
disputed spectrum.
The U.S. Court of Appeals (DCCir) ruled in
its June 22, 2001, opinion
that the FCC is prevented from canceling the spectrum licenses by § 525 of the
Bankruptcy Code. The FCC then petitioned the Supreme Court for writ of
certiorari.
Late last year the FCC, DOJ, NextWave, and re-auction winners negotiated a
settlement agreement. However, it required the passage of legislation by
Congress by the end of the year. Congress took no action.
FCC Chairman stated in a release
that "I am gratified that the Supreme Court has decided to review the D.C.
Circuit's decision in the NextWave case. This will allow the Court to clarify
the relationship between public spectrum auctions and the U.S. bankruptcy
laws."
This is Supreme Court Nos. 01-653 and 01-657.
Supreme Court Denies Cert in Symantec v. Hilgraeve Patent Case
3/4. The Supreme Court of the United
Stated denied certiorari in Symantec
v. Hilgraeve, a patent infringement case involving computer virus
detection software. See, March 4 Order
List [PDF] at page 4.
Hilgraeve is the holder of U.S.
Patent No. 5,319,776, titled "In transit detection of computer virus
with safeguard". Symantec provides
Internet security products, including anti virus protection products. Hilgraeve
filed a complaint in U.S.
District Court (EDMich) against Symantec alleging that its PCAnywhere and
Norton Anti Virus products infringe its '776 patent.
This patent describes a program that scans for computer viruses. It scans a body
of data during its transfer, and before storage of the data with potential
viruses on the destination storage medium. If the program detects signs of a
virus during the scan, and the program automatically blocks storage. Hilgraeve
argued that Symantec's products screen incoming digital data for viruses during
transfer and before "storage" on the destination storage medium.
Symantec argued its products do not infringe because they screen the incoming
digital data only after it has been transferred and "stored" on the
destination storage medium.
The District Court granted Hilgraeve's motion for summary judgment that Symantec
did not have a license to the '776 patent. The District Court granted Symantec's
motion for summary judgment of non-infringement. Hilgraeve appealed; and
Symantec cross appealed. The U.S.
Court of Appeals (FedCir) issued its opinion on September 17, 2001. It
vacated the grant of summary judgment of non-infringement, and generally
affirmed the grant of summary judgment that Symantec did not license the patent.
The Supreme Court denied Symantec's petition for writ of certiorari without
opinion.
FRB Vice Chairman Addresses Disaster Recovery
3/4. Federal Reserve Board Vice
Chairman Roger
Ferguson gave a speech
to the Institute of International Bankers in
Washington DC titled "A Supervisory Perspective on Disaster Recovery and
Business Continuity". He stated that "Through the routine supervisory
process, we are talking to institutions about the robustness of their disaster
recovery planning but are stopping short of setting detailed regulatory
standards at this point."
Ferguson stated that "The Federal Reserve and other regulators, both here
and abroad, have been analyzing the aftermath of the terrorist attacks with a
view toward strengthening the overall resilience of the financial system."
He first reviewed three key lessons of September 11. "First, business
continuity planning at many institutions, although improved by Y2K preparations,
clearly had not fully taken into account the potential for wide spread disasters
and for the major loss or inaccessibility of critical staff."
"Second, business concentrations, both market based and geographic,
intensified the impact of operational disruptions. ... Moreover, significant
telecommunications vulnerabilities resulting from concentrations became evident
when failures affected numerous institutions, both within and outside lower
Manhattan." And, "Third, the events of September 11 graphically
demonstrated the interdependence among financial system participants, wherever
located."
Ferguson then addressed the "steps that institutions are taking to improve
their own preparedness and business continuity planning", such as
"enhancing security measures, updating communication plans, and
strengthening real time data backup". He went into detail about different
back up models, including having an active operating site and a backup site, and
having split operations. He also addressed communications diversification.
He stated that "Institutions are also exploring methods to provide a
greater diversity of telecommunications services and to eliminate points of
failure. Contract provisions and audit oversight of telecommunications vendors
may heighten attention to this critical vulnerability. At the same time, many
recognize that overcoming telecommunications vulnerabilities will be extremely
difficult given the current physical infrastructure. In the longer term,
establishing diverse telecommunications methods (such as Internet and wireless)
and moving toward wider geographic diversification of operations may address
these vulnerabilities. Industry wide discussions with telecommunications
providers may help institutions to avoid some of the vulnerabilities exposed on
September 11. Some institutions are reexamining arrangements with disaster
recovery vendors because they have found that these vendors' ``first come, first
served´´ policies mean just that."
Ferguson concluded that the FRB is "talking to our industry colleagues
about appropriate sound practices", but is "stopping short of setting
detailed regulatory standards at this point". He added, "Although I
anticipate that we will issue updated supervisory guidance and examination
procedures for business continuity before long, I am not certain that we want to
approach this issue with a checklist."
People and Appointments 3/4. President Bush nominated James Comey to be U.S. Attorney
for the Southern District of New York. See, WH
release.
3/4. President Bush nominated Michael Toner to be a member of the Federal Election Commission (FEC) for a term
expiring April 30, 2007. He replaces Darryl Wold, whose term expired. See, WH
release.
3/4. The Federal Bureau of Investigation (FBI)
announced several new appointments. Roderick Beverly will be Special
Agent in Charge of International Operations. Leah Meisel will be
Personnel Officer and Deputy Assistant Director for Personnel, Administrative
Services Division. James Bernazzanni will be Deputy Chief,
Counterterrorist Center, Central Intelligence Agency. Robert Cromwell
will be Chief of the Applicant Processing Section, Administrative Services
Division. Mary Ann Woodson will be Budget Officer and Chief of the Budget
Section, Finance Division. See FBI release.
More News
3/4. The U.S. District Court (NDOhio)
sentenced Brian Wildman to five months in prison, and five months of home
confinement. Wildman plead guilty to two counts of mail fraud, in violation of 18 U.S.C. § 1341,
in connection with an eBay Internet auction fraud scheme. See, USAO release.
3/4. Federal Communications Commission (FCC)
Chairman Michael Powell
gave a speech
at the Competitive Telecommunications
Association's (CompTel) annual convention in Miami, Florida. He provided an
overview of some recent actions by the FCC.
FCC Receives Comments on Regulatory Treatment of ILECs
Provision of Broadband
3/1. Friday, March 1, was the deadline to submit comments to the Federal Communications Commission (FCC) in
response to its notice of proposed rulemaking (NPRM) regarding the appropriate
regulatory requirements for incumbent local exchange carriers' (ILECs')
provision of broadband telecommunications services. The FCC adopted this NPRM at
its December 12 meeting. This is CC Docket No. 01-337. See, notice
in the Federal Register, January 15, 2002, Vol. 67, No. 10, at Pages 1945 -
1947.
The Information Technology Association of America
(ITAA) submitted a comment
[PDF] in which it stated that the FCC "should continue to classify ILECs as
dominant in the provision of wholesale mass market broadband telecommunications
services. Rather than eliminating existing regulations, the Commission should
take action to promote competitive entry by Data CLECs, while enforcing the
still effective Computer II requirement that the BOCs separate the provision of
telecommunications services (both narrowband and broadband) from the provision
of information services. If the Commission chooses to deregulate the ILECs'
broadband services, however, it should, at the very least, require the ILECs to
provide ``advanced telecommunications services´´ through an affiliate that is
structurally separate from their local exchange service operations."
WorldCom submitted a comment
[PDF] in which argued that the FCC "should consider the issues that arise
when a carrier is dominant in an upstream market (local exchange and exchange
access), but faces some competition in the downstream market (broadband
services). The Commission must consider what level of regulation to apply to the
downstream market, and what safeguards are necessary to prevent a carrier from
leveraging its power in the upstream market to affect competition in the
downstream market. Consistent with FCC precedent, most recently the LEC
Classification proceeding, the Commission should not declare a carrier with
market power in the upstream market non-dominant in the downstream market unless
there is sufficient evidence of irreversible and meaningful competition in the
downstream market."
Time Warner submitted a comment
[PDF] in which it stated that "there is no need for the Commission to alter
the current regulation of ILEC broadband services provided to medium and large
business customers, except to require ILECs to comply with special access
service quality performance measurements, standards, reporting requirements and
penalties."
Sprint submitted a comment
[PDF] in which it argued that "The broadband services market should be
divided into two relevant product markets -- mass market and larger business. In
both of these markets there is a demonstration of existing competition that
justifies some degree of pricing flexibility and tariff filing flexibility, but
only if the ILEC Section 251 UNE, collocation, and resale obligations
continue."
Back in January, SBC filed a petition
[PDF] with the FCC seeking a ruling that it is non dominant in its provision of
advanced services, and to forbear from dominant carrier regulation of those
services.
Petition for Rehearing Filed in Kelly v. Arriba Soft
3/1. Ditto.com (formerly known as Arriba
Soft) filed a petition for rehearing and/or rehearing en banc with the U.S. Court of Appeals (9thCir) in Kelly
v. Arriba Soft, a case involving the fair use exception to
copyright infringement in the context of online digital images, hyperlinking and
search engines. On February 6, a unanimous three judge panel issued its opinion
[PDF] holding that Arriba Soft's display of images constituted copyright
infringement.
Background. Leslie Kelly is a professional photographer who has
copyrighted and published images of the American west. Arriba Soft, which is now
known as Ditto.com, operates an Internet
search engine for images. It placed in its web site reduced size copies of
images, or thumbnails. This search engine produced thumbnail images, rather than
text, in response to queries. Arriba placed thumbnail copies of Kelly's images
in its web site, without permission from Kelly. It also used hyperlinks to files
on the servers of others to display the full sized pictures.
Arriba operated by using a crawler that copied images from other web sites,
including those of Kelly and third parties which published Kelly's pictures
under license. Arriba then used these copies to generate reduced size, lower
resolution, thumbnail pictures, which it kept in its database. Arriba then
deleted the original, full size, images. When someone used Arriba's search
engine to search for images on the Internet, Arriba served web pages that
included thumbnails, which resided on its servers. Then, if the user clicked on
the thumbnail image, a second page was served, which displayed the full sized
image, drawn from the server of the originating web site, along with, among
other things, advertisements purchased from Arriba. A hyperlink to the
originating web site was also displayed.
District Court. Kelly filed a complaint in U.S.
District Court (CDCal) against Arriba alleging copyright infringement.
Arriba asserted that its actions constituted fair use within the meaning of 17 U.S.C. § 107. The
District Court held that that Kelly had established a prima facie case of
copyright infringement based on Arriba's unauthorized reproduction and display
of Kelly's works, but that this reproduction and display constituted a
non-infringing fair use. See, opinion
at 77 F. Supp.2d 1116 (C.D. Cal. 1999).
Appeals Court. The three judge panel of the Ninth Circuit reasoned that
"two distinct actions by Arriba ... warrant analysis. The first action
consists of the reproduction of Kelly's images to create the thumbnails and the
use of those thumbnails in Arriba's search engine. The second action involves
the display of Kelly's images through the inline linking and framing processes
when the user clicks on the thumbnails." The Appeals Court applied the four
prong analysis of Section 107 for each action.
The Appeals Court concluded: "We hold that Arriba's reproduction of Kelly's
images for use as thumbnails in Arriba's search engine is a fair use under the
Copyright Act. We also hold that Arriba's display of Kelly's full sized images
is not a fair use and thus violates Kelly's exclusive right to publicly display
his copyrighted works. The district court's opinion is affirmed as to the
thumbnails and reversed as to the display of the full sized images. We remand
with instructions to determine damages for the copyright infringement and the
necessity for an injunction."
The law firm of Perkins Coie
represents Arriba Soft. See, Perkins Coie
release. The law firm of Arnold
& Porter represents Kelly.
People and Appointments 3/1. The National Telecommunications
Cooperative Association (NTCA) board of directors elected John Metts
President, Norman Walker Vice President, and Tom Rowland Secretary
Treasurer. Metts is CEO and General Manager of Penasco Valley Telephone
Cooperative in Artesia, New Mexico. Welker is CEO and General Manager of
McDonough Telephone Cooperative in Colchester, Illinois. Rowland is P/CEO of
North Central Telephone Cooperative in Lafayette, Tennessee.
More News
3/1. The Federal Trade Commission (FTC)
extended the deadline for submitting public comments to the FTC regarding the
use of disgorgement as a remedy for competition violations, including those
involving the Hart Scott Rodino Premerger Notification Act, FTC Act, and Clayton
Act. See, original FTC release
and Federal Register notice
setting a deadline of March 1, and FTC release extending
deadline to March 29.
3/1. The Federal Trade Commission (FTC)
approved a notice
to be published in the Federal Register regarding proposed new Privacy Act
system of records. This system, if adopted, would include telephone numbers and
other information pertaining to individuals who have informed the Commission
that they do not wish to receive telemarketing calls. Public comments on this
proposal are due by March 29, 2002.
3/1. The Federal Trade Commission (FTC)
release a report
[41 pages in PDF] titled "Public Workshop: The Mobile Wireless Web, Data
Services and Beyond: Emerging Technologies and Consumer Issues". This
report pertains to a workshop held by the FTC on December 11-12, 2000, on new
wireless technologies, and the consumer protection issues that they raise.
3/1. The U.S.
Court of Appeals (FedCir) issued its opinion in Hewlett
Packard v. Packard Press. The U.S.
Patent and Trademark Office (USPTO) Trademark Trial and Appeal Board
dismissed Hewlett Packard's opposition to Packard Press's application for
registration of the mark PACKARD TECHNOLOGIES for data processing and data
transmission services. HP appealed. The Appeals Court ruled that there is a
likelihood of confusion, and reversed.