|News from June 16-20, 2003|
Tiger Woods' Licensing Agent Cannot Stop Sale of "Masters of Augusta"
6/20. The U.S. Court of Appeals (6thCir) issued its split opinion in ETW v. Jireh Publishing, a trademark case involving the sale of a painting.
ETW Corporation is the licensing agent for Eldrick "Tiger" Woods, the famous golfer. Jireh Publishing markets copies of sports painting created by Rick Rush. Rush painted a picture titled "Masters of Augusta", which commemorates Tiger Woods' victory at the Masters Tournament in Augusta, Georgia in 1997. ETW holds a trademark registration for the mark "Tiger Woods". However, the mark does not appear in the painting. Also, the painting and associated materials all specify that Rick Rush is the source. Tiger Woods is represented in the painting, as are others, including other great golfers from history.
ETW filed a complaint in U.S. District Court (NDOhio) against Jireh alleging trademark infringement in violation of the Lanham Act, 15 U.S.C. § 1114; dilution of the mark under the Lanham Act, 15 U.S.C. §1125(c); unfair competition and false advertising under the Lanham Act, 15 U.S.C. §1125(a); unfair competition and deceptive trade practices under Ohio statute; unfair competition and trademark infringement under Ohio statute; and, violation of Woods's right of publicity under Ohio common law. The District Court granted Jireh's motion for summary judgment and dismissed the case. ETW appealed.
The Appeals Court affirmed on all issues, after a lengthy analysis of each Lanham Act issue, and the right of publicity. One judge dissented, arguing that there are material issues of fact in dispute that should be tried by a jury.
Amici File Brief In Support of RIAA in DMCA Subpoena Case
6/20. The Motion Picture Association of America (MPAA) and other groups filed an amicus curiae brief [38 pages in PDF] with the U.S. Court of Appeals (DCCir) in Verizon v. RIAA, arguing that a 17 U.S.C. § 512(h) subpoena may be used to obtain the identity of an anonymous peer to peer infringer from his ISP.
The brief concludes that "In the DMCA, Congress, after years of considering the competing issues involved, took on the latest threat to copyright -- balancing the tremendous benefits of the Internet and digital technology against the very significant risks they pose to the intellectual property of present and future copyright owners. One cannot find in Title II the purported right to anonymity that Verizon invokes on behalf of the serial infringers at issue in this proceeding, and the others who are similarly inflicting massive injury on copyright owners. For the reasons set forth above, the Court should decline the invitation to create such a right. Amici respectfully submit that the Court should affirm the District Court’s Orders."
Amici also include the Business Software Alliance (BSA) and the Digital Software Association. The amici also include other groups representing musicians, artitists, actors, photographers, writers, directors and publishers. Amici also include the National Football League, and the Commissioner of Baseball. The brief was prepared by Paul Gaffney and Manish Mital of the law firm of Williams & Connolly.
See also, TLJ story titled "District Court Rules That A DMCA § 512(h) Subpoena for the Identity of an P2P Infringer Does not Violate the Constitution", April 24, 2003; TLJ story titled "District Court Rules DMCA Subpoenas Available for P2P Infringers", January 21, 2003; and TLJ story titled "Verizon and Privacy Groups Oppose RIAA Subpoena", August 30, 2002.
People and Appointments
6/20. President Bush announced that he will name Scott McClellan to be Assistant to the President and White House Press Secretary. He is currently a Deputy Assistant to the President and the Principal Deputy White House Press Secretary. He will replace Ari Fleischer. See, White House release and statement by President Bush.
Senate Commerce Committee Approves Bills
6/19. The Senate Commerce Committee held a lengthy meeting to mark up several bills on Thursday morning and afternoon, June 19. The Committee approved legislation that would undo some of the media ownership rules changes announced by the Federal Communications Commission (FCC) on June 2. It passed an anti spam bill. It passed a nanotech R&D bill. It passed a bill that reauthorizes the FTC and amends substantive law affecting FTC operations. Finally, it passed the Commercial Space Transportation Act.
The Committee amended and approved S 1046, the "Preservation of Localism, Program Diversity, and Competition in Television Broadcast Service Act of 2003", a media ownership bill. See, story titled "Senate Commerce Committee Passes Media Ownership Bill", in this issue.
The Committee also amended and approved S 877, the "Controlling the Assault of Non-Solicited Pormography and Marketing Act of 2003", or "CAN-SPAM Act". See, story titled "Senate Commerce Committee Passes Spam Bill", in this issue.
The Committee also approved S 189, the "21st Century Nanotechnology Research and Development Act". See, story titled "Senate Commerce Committee Approves Nanotech R&D Bill", in this issue.
The Committee also approved S 1234, the "Federal Trade Commission Reauthorization Act of 2003", sponsored by Sen. John McCain (R-AZ) and Sen. Gordon Smith (R-OR). There was considerable debate over a non technology related amendment offered by Sen. Frank Lautenberg (D-NJ), pertaining to FTC studies of cigarettes. That amendment failed on a straight party line vote. The bill contains both authorization for appropriations for the FTC, and several tech related substantive provisions. See, story titled "Sen. McCain Introduces FTC Reauthorization Bill" in TLJ Daily E-Mail Alert No. 682, June 17, 2003.
The Committee also approved S 1260, the "Commercial Space Transportation Act of 2003", sponsored by Sen. McCain and Sen. Sam Brownback (R-KS). This purpose of this bill is to authorize appropriations for the Office of the Associate Administrator for Commercial Space Transportation and otherwise promote the development of the commercial space transportation industry.
The Committee did not consider several bills that had been on the agenda for this meeting. The Committee did not take up S 1264, the FCC reauthorization bill, which also contains a large number of significant changes in substantive law. For example, it contains provisions pertaining to media ownership rules, e-rate fraud, FCC enforcement, private causes of actions against common carriers, lobbying by former FCC officials, and the effect of bankruptcy on spectrum auctions. See, story titled "Sen. McCain Introduces Telecom Bill" in TLJ Daily E-Mail Alert No. 681, June 16, 2003.
Nor did the Committee take up S 865, the "Commercial Spectrum Enhancement Act". The House has already passed its version of this bill, HR 1320. See also, TLJ story titled "House Subcommittee Holds Hearing On Commercial Spectrum Enhancement Act", March 25, 2003; story titled "House Subcommittee Approves Spectrum Relocation Fund Bill" in TLJ Daily E-Mail Alert No. 641, April 10, 2003; story titled "House Commerce Committee Passes Spectrum Relocation Bill" in TLJ Daily E-Mail Alert No. 653, May 1, 2003; and story titled "House Passes Commercial Spectrum Enhancement Act" in TLJ Daily E-Mail Alert No. 679, June 12, 2003.
Senate Commerce Committee Passes Media Ownership Bill
6/19. The Senate Commerce Committee amended and passed S 1046, the "Preservation of Localism, Program Diversity, and Competition in Television Broadcast Service Act of 2003". The bill, as amended, would roll back some of the changes to the the Federal Communications Commission's (FCC) media ownership rules that the FCC announced at its June 2, 2003 meeting.
On June 2, the FCC announced rules changes that maintain, but relax, several FCC media ownership rules. The FCC raised the national TV ownership cap from 35% to 45%. The FCC eased both the local TV multiple ownership limits, and radio multiple ownership limits. The FCC also eased the limits on cross ownership of TV stations, radio stations, and daily newspapers. However, the FCC maintained the dual network ownership prohibition.
See, stories titled "FCC Announces Revisions to Media Ownership Rules" and "Reaction to the FCC's Media Ownership Announcement" in TLJ Daily E-Mail Alert No. 672, June 3, 2003.
The bill just adopted by the Senate Commerce Committee rolls back the FCC's announced changes pertaining to the national broadcast TV multiple ownership cap, and the cross ownership limits. It also changes the biennial review language of the Telecom Act of 1996 that the Circuit Court has relied upon in remanding FCC media ownership rules. See, full story.
Senate Commerce Committee Passes Spam Bill
6/19. The Senate Commerce Committee amended and passed S 877, the "Controlling the Assault of Non-Solicited Pormography and Marketing Act of 2003", or "CAN-SPAM Act". This Committee adopted an amendment in the nature of a substitute to the bill as originally introduced on April 10, 2003, by Sen. Conrad Burns (R-MT), Sen. Ron Wyden (D-OR), and others. Moreover, Sen. Wyden stated at the meeting, that the bill will be further revised, particularly regarding increasing penalties.
The bill as introduced, S 877 IS, creates civil bans on sending unsolicited commercial e-mail (UCE) with false header information, or with intentionally false or misleading content. It also requires UCE senders to include a return e-mail address, and ban sending further UCE to persons who have objected to receiving more UCE. It also bans the practice of sending UCE to lists of addresses that have been harvested from websites by automated means. The bill gives enforcement authority to the Federal Trade Commission (FTC), states, and internet access providers, but not individuals. The bill preempts state UCE laws, with exceptions.
The Committee approved an amendment in the nature of a substitute [36 pages in PDF] that makes numerous changes. It increases penalties for certain practices of spammers, including dictionary attacks, the establishment of numerous e-mail accounts to make spam more difficult to track and block, and the hijacking of other computers or computer networks to send or relay spam. It also increases damages available in suits brought by states and internet service providers.
The amendment provides that when a recipient asks to be removed from a sender’s mailing list, the sender also may not provide that recipient's e-mail address to a third party. The amendment also expands the ban on sending unsolicited commercial e-mail after a recipient has opted out to include both solicited and unsolicited marketing e-mail.
The amendment also modifies the federal preemption language to allow states to continue to impose and enforce laws against falsity and deception in spam.
Sen. Bill Nelson (D-FL) offered an amendment, which he later withdrew, that would have provided that certain acts shall be "considered a predicate offense for the purposes of applying the Racketeering Influenced and Corrupt Organization Act (RICO)", codified at 18 U.S.C. § 1961, et seq. He lacked the votes on the Committee for approval. However, he added that he may offer his amendment in the full Senate.
Sen. Wyden stated that Sen. Orrin Hatch (R-UT) and Sen. Patrick Leahy (D-VT), the Chairman and ranking Democrat on the Senate Judiciary Committee, will introduce a bill that amends criminal law regarding spam. Sen. Wyden added "this bill will continue to get tougher ... as we continue to work with the Judiciary Committee".
Sen. John McCain (R-AZ), the Chairman of the Commerce Committee, stated that "the penalties for this outrageous conduct have got to be tougher."
Senators Burns and Wyden also introduced anti-spam legislation in the 106th and 107th Congresses. Their bill in the last Congress, S 630 (107th), was approved by the Senate Commerce Committee on May 17, 2002. Then, the full Senate did not pass the bill. However, in the current Congress, there may be a higher level of support for spam legislation, evidenced by the increased number of spam bills that have been introduced in the House and Senate, the number of cosponsors (S 877 has 17 cosponsors, while S 630 had 12), and the frequency and vehemence of statements made in support of spam legislation.
See, story titled "Senators Burns and Wyden Re-Introduce Can Spam Bill" in TLJ Daily E-Mail Alert No. 643, April 14, 2003.
Senate Commerce Committee Approves Nanotech R&D Bill
6/19. The Senate Commerce Committee passed S 189, the "21st Century Nanotechnology Research and Development Act", with little debate or discussion. The bill, which is sponsored by Sen. Ron Wyden (D-OR), Sen. George Allen (R-VA) and others, would authorize the appropriation of funds for nanotechnology research and development programs at a variety of federal agencies.
See, stories titled "Senate Commerce Committee Holds Hearing on Nanotechnology" in TLJ Daily E-Mail Alert No. 654, May 2, 2003; "House Science Committee Holds Hearing on Nanotechnology" in TLJ Daily E-Mail Alert No. 641, April 10, 2003; and "Representatives Introduce Bill To Authorize Nanotech R&D Funding" in TLJ Daily E-Mail Alert No. 606, February 18, 2003.
One of the aspects of the bill that has been debated is whether the administration should take guidance from a panel of nanotechnology experts, or from a general panel of science and technology experts. Senate Wyden stated in a release that "The bill also requires a panel of experts to advise the President on nanotechnology issues; Wyden has strongly advocated the creation of a panel made up solely of nanotechnology experts, although the existing President’s Commission of Advisors on Science and Technology, or P-CAST, may be used. A National Nanotechnology Coordination Office created in the bill will provide administrative and technical support for the President’s nanotechnology advisors and the research program in general."
Representatives Smith & Berman Introduce Internet Piracy Education Bill
6/19. Rep. Lamar Smith (D-TX), Rep. Howard Berman (D-CA), and Rep. John Conyers (D-MI) introduced HR 2517, the "Piracy Deterrence and Education Act of 2003". This bill would enhance the government's resources for prosecuting intellectual property crimes, and involve the Federal Bureau of Investigation (FBI) and Department of Justice (DOJ) in educating and warning the public regarding internet based copyright infringement.
This bill has very little substance, in the sense that it make no major challenges to the intellectual property rights regime, civil remedies, or criminal enforcement. It contains a lengthy set of findings. It provides that the FBI shall issue warnings to the public about internet copyright infringement. It creates an internet piracy education program at the DOJ. It requires the DOJ's CHIPs units to devote some resources to intellectual property crimes.
The findings section states that "Many computer users either do not know that copyright laws apply to Internet activity or simply believe that they will not be caught or prosecuted for their conduct." It further states that "it is important that Federal law enforcement agencies actively pursue criminals who steal the copyrighted works of others, and prevent such activity through enforcement and awareness. It is also important that the public be educated about the security and privacy risks associated with being connected to an unauthorized peer-to-peer network."
The bill provides that the FBI shall "develop a program to deter members of the public from committing acts of copyright infringement by -- (A) offering on the Internet copies of copyrighted works, or (B) making copies of copyrighted works from the Internet, without the authorization of the copyright owners". It further provides that such program shall include "warnings to individuals" engaging in internet based infringement that "they may be subject to criminal prosecution". The bill, however, makes no changes to the criminal code.
The bill also provides that the FBI shall "facilitate the sharing among law enforcement agencies, Internet service providers, and copyright owners of information concerning" internet based infringement.
The bill also provides that each of the DOJ's Computer Hacking and Intellectual Property (CHIPs) units shall have "at least one agent to support such unit for the purpose of investigating crimes relating to the theft of intellectual property". It also requires training of that agent.
The bill also requires the DOJ to create a "Internet Use Education Program" to "educate the general public concerning the value of copyrighted works and the effects of the theft of such works on those who create them", and to "educate the general public concerning the privacy, security, and other risks of using the Internet to obtain unauthorized copies of copyrighted works".
The bill makes three minor changes to the Copyright Act, regarding registration (17 U.S.C. § 411), infringing importation (17 U.S.C. § 602), and importation prohibitions (17 U.S.C. § 603).
It provides that "An action for infringement of the copyright in any United States work shall not include any action brought by the Government of the United States or by any agency or instrumentality thereof." That is, the government is relieved of the obligation of registering a copyright before bringing an action for infringement.
The findings section of the bill explains that "the Bureau of Customs and Border Protection has been unclear about its legal authority to seize infringing copyrighted materials that have neither been registered with the Copyright Office nor recorded with the Bureau. To provide clarity, it is necessary to specify the authority of the Bureau of Customs and Border Protection to seize infringing materials protected by the copyright laws, with or without registration or recordation."
Rep. Smith (at right) is Chairman of the House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property. Rep. Berman is the ranking Democrat on the Subcommittee. Rep. Conyers is the ranking Democrat on the full Committee.
Jack Valenti, P/CEO of the Motion Picture Association of America (MPAA), stated in a release that "This bill is a sensible step forward in ensuring that the government plays a proper role in educating our young people about the importance of respecting intellectual property, and giving the Federal Bureau of Investigation and other law enforcement officials the personnel and programs necessary to help them fight this scourge."
Cary Sherman, President of the Recording Industry Association of America (RIAA), stated in a release that "The Smith-Berman legislation will strengthen the hand of the FBI and other federal law enforcement officials to address the rampant copyright infringement occurring on peer-to-peer networks. This common sense, bipartisan bill will help ensure that federal prosecutors across the country have the resources and expertise to fully enforce the copyright laws on the books -- especially against those who illegally distribute massive quantities of copyrighted music online."
Sherman added that "There is also a need for greater awareness about our copyright laws and the illegality of pirating of copyrighted works over the Internet, and this bill bolster's the governments' ability to bring that message to the public."
Bills Introduced to Provide Grants for Community Telecom Planning
6/19. Sen. Patti Murray (D-WA) and others introduced S 1294, the "Community Telecommunications Planning Act of 2003". Rep. Jay Inslee (D-WA) and others introduced the companion bill in the House, HR 2530.
These two bills authorize the appropriations of funds to the Department of Commerce, the Department of Agriculture, and the Department of Education, to give grants to governmental and non-profit entities for "community telecommunications infrastructure planning and market development purposes".
The entities eligible to receive grants would be "any local or tribal government, local non-profit entity, cooperative, public utility, or other public entity". The bill also provides that the grant giving departments "shall give priority ... for rural areas or underserved areas".
The bill would authorize the appropriation of $60 Million for fiscal year 2004, and "such sums as may be necessary" for subsequent years.
Sen. Murray stated in the Senate that her bill would help "rural and underserved communities across the country get connected to the information economy."
She continued that "many small and rural communities are having trouble getting the access they need. Before communities can take advantage of some of the help and incentives that are out there, they need to work together and got through a community planning process. Community plans identify the needs and level of demand, create a vision for the future, and show what all the players must do to meet the telecom needs of their community for today and tomorrow. These plans take resources to develop, and my bill would provide those funds." See, Congressional Record, June 19, 2003, at page S8241.
These bills have been referred to the Senate Commerce Committee and the House Commerce Committee.
Sen. Murray introduced a similar bill in the last Congress, S 1056 (107th). It did not pass. However, it was attached to the Senate version of the farm bill, but then removed in conference.
Rep. Frank Introduces FOIA Exemption Bill
6/19. Rep. Barney Frank (D-MA) introduced HR 2526, the "Restoration of Freedom of Information Act of 2003", a bill to amend the provisions of the Homeland Security Act of 2002 pertaining to the Freedom of Information Act (FOIA), 5 U.S.C. § 552, exemption for voluntarily shared critical infrastructure information.
This is the companion bill to S 609, which Sen. Patrick Leahy (D-VT) and others introduced on March 12, 2003. See, story titled "Sen. Leahy Introduces Bill to Limit FOIA Exemption for Critical Infrastructure Information" in TLJ Daily E-Mail Alert No. 623, March 14, 2003.
Title II of the Homeland Security Act, HR 5005 (107th), pertains to "Information Analysis and Infrastructure Protection". Subtitle B of Title II pertains to "Critical Infrastructure Information". It is comprised of Sections 211-215. President Bush signed HR 5005 on November 25, 2002. It then became Public Law No. 107-296.
However, the debate over creating a FOIA exemption for critical infrastructure information (CII) began long before the introduction of HR 5005 in the summer of 2002. Proponents of the CII exemption include technology companies, the trade groups that represent them, and many members of Congress. They argue that without an adequate exemption, companies that possess CII will not share it with the government, for fear that their competitors, litigants, and hackers will obtain it through FOIA requests. Moreover, if companies to do not voluntarily share CII with the government, the government will not be able to effectively protect its own systems, or effectively pursue national cyber security policies.
Sen. Robert Bennett (R-UT) and Rep. Tom Davis (R-VA) have been leading proponents of the CII FOIA exemption. See for example, story titled "Sen. Bennett Promotes Cyber Security Bill", TLJ Daily E-Mail Alert No. 290, October 19, 2001.
Section 214 of the HR 5005 creates a new FOIA exemption for critical infrastructure information. It provides, in part, "Notwithstanding any other provision of law, critical infrastructure information (including the identity of the submitting person or entity) that is voluntarily submitted to a covered Federal agency for use by that agency regarding the security of critical infrastructure and protected systems, analysis, warning, interdependency study, recovery, reconstitution, or other informational purpose, when accompanied by an express statement specified in paragraph (2) -- (A) shall be exempt from disclosure under section 552 of title 5, United States Code (commonly referred to as the Freedom of Information Act); ..." (Parentheses in original.)
The Leahy/Frank bill would make several changes. It would replace Sections 211-215 with one new Section 211.
The existing provision exempts certain "information". The Leahy/Frank bill would exempt only "records", a narrower term.
Existing law contains a definition of "voluntarily" submitted. The Leahy/Frank bill would narrow the definition of "voluntarily" so that it would encompass a smaller class of records. For example, the Leahy/Frank bill would switch the standard from the "absence of exercise" standard to the "absence of authority" standard. That is, current law provides that "voluntary" means that the submittal of the information is "in the absence of such agency's exercise of legal authority to compel access to or submission of such information". The Leahy/Frank would provide that "voluntary" means that the record is submitted "in the absence of authority of the Department requiring that record to be submitted ..."
Existing law contains a definition of "critical infrastructure information". The Leahy/Frank bill would replace it with a narrower definition of "critical infrastructure".
Existing law provides that "Nothing in this subtitle may be construed to create a private right of action for enforcement of any provision of this Act." The Leahy/Frank bill would eliminate this provision.
HR 2526 is also cosponsored by Rep. Mark Udall (D-CO). The bill was referred to the House Judiciary Committee, of which Rep. Frank is a senior member.
Senators Hatch & Leahy Introduce Spam Crime Bill
6/19. Sen. Orrin Hatch (R-UT), Sen. Patrick Leahy (D-VT) and others introduced S 1293, the Criminal Spam Act of 2003. The bill would criminalize accessing a protected computer to send spam ("multiple commercial electronic mail messages"), using a protected computer to relay or retransmit spam with intent to deceive either recipients or ISPs, falsifying header information in spam, and registering multiple e-mail accounts or domain names to send spam.
This is not a broad spam related bill. The Senate Commerce Committee adopted such a bill on June 19. The Committee amended and approved S 877, the "Controlling the Assault of Non-Solicited Pormography and Marketing Act of 2003", or "CAN-SPAM Act". See, story titled "Senate Commerce Committee Passes Spam Bill" in TLJ Daily E-Mail Alert No. 685, June 20, 2003. Rather, S 1293 is a narrow bill that would amend Title 18 to provide criminal penalties for certain spam related conduct.
Sen. Hatch stated in the Senate that "This legislation, which enjoys bipartisan support, targets the most egregious types of spammers -- those who hijack computer systems and those who use other fraudulent means to send unsolicited commercial electronic mail." See, Congressional Record, June 19, 2003, at page S8238.
Sen. Hatch stated that the problem is that "By using deceptive methods, these spammers conceal their identities, evade Internet service provider filters, and exploit the Internet ..." He continued that bill "targets fraudulent and deceptive spam by enhancing the ability of federal law enforcement authorities to prosecute and punish the most egregious wrongdoers."
S 1293 would criminalize four acts, if committed knowingly: "(1) accesses a protected computer without authorization, and intentionally initiates the transmission of multiple commercial electronic mail messages from or through such computer; (2) uses a protected computer to relay or retransmit multiple commercial electronic mail messages, with the intent to deceive or mislead recipients, or any Internet access service, as to the origin of such messages; (3) falsifies header information in multiple commercial electronic mail messages and intentionally initiates the transmission of such messages; or (4) registers, using information that falsifies the identity of the actual registrant, for 5 or more electronic mail accounts or online user accounts or 2 or more domain names, and intentionally initiates the transmission of multiple commercial electronic mail messages from such accounts or domain names".
The bill imposes penalties of up to five years in prison, depending on which ban is violated, and the circumstances.
However, the bill also creates a civil cause of action in U.S. District Court for the Department of Justice and "any person engaged in the business of providing an Internet access service" for violation of any of the above bans.
The other original cosponsors of bill are Sen. Charles Schumer (D-NY), Sen. Charles Grassley (R-IA), Sen. Dianne Feinstein (D-CA), Sen. Mike DeWine (R-OH), and Sen. John Edwards (D-NC).
Representatives Baird & Inslee Introduce ICANN Bill
6/19. Rep. Brian Baird (D-WA) and Rep. Jay Inslee (D-WA) introduced HR 2521, the "Fair, Transparent, and Competitive Internet Naming Act of 2003". The bill would require the Comptroller General to conduct a study regarding "the business practices, procedures, accountability, and administration" of the Internet Corporation for Assigned Names and Numbers (ICANN).
This study would examine whether the ICANN has operated in accordance with the terms of the Memorandum of Understanding (MOU) between the U.S. Department of Commerce and ICANN, whether the MOU provides for adequate oversight by the federal government, and whether persons and entities would be better served by a different relationship between the ICANN and the federal government (such as would exist with application of the Administrative Procedure Act or the Federal Advisory Committee Act to the ICANN).
The study would also examine whether "any decision by ICANN to approve the request of a private entity to manage and operate a Wait Listing Service for expired Internet domain names is consistent with the purpose and principles of the Memorandum of Understanding, whether any such decision would have the effect of awarding a monopoly to such private entity, and the effects any such decision would have on existing Internet domain name registrars and on other users of the Internet."
The bill would also impose a moratorium on the Department of Commerce. It provides that the "(1) Secretary of Commerce may not take any action to alter the system and procedures for registration of Internet domain names from such system in effect on June 19, 2003, and any action taken during such period before the date of the enactment of this Act may not be given any effect during the remainder of such period, and (2) any decision or determination to alter such system, including by providing for any entity to implement a Wait Listing Service of domain name registration, and any authority granted to alter such system, shall not be effective during such period, regardless of whether such decision or determination is made before or after the date of the enactment of this Act."
Rep. Baird issued a release which states that "Domain Registrars across the country have expressed concern over ICANN’s recent agreement to implement an exclusive Wait List Service (WLS) for customers interested in registering domain names that are in use by others. Customers may currently purchase ‘expired’ domain names through a number of registrar firms. If the WLS becomes reality, as currently envisioned by ICANN, domain registrars around the country will be edged out of competition. This agreement is contrary to competition principles detailed in the very same Memorandum of Understanding that provided ICANN with control of the DNS."
The Comptroller General is the head of the General Accounting Office (GAO), which is the audit, evaluation, and investigative arm of the Congress. The bill was referred to the House Commerce Committee.
FCC Announces Agenda for June 26 Meeting
6/19. The Federal Communications Commission (FCC) announced the agenda [2 pages in PDF] for its meeting of Thursday, June 26.
The FCC will consider an Eighth Report regarding the status Commercial Mobile Services (CMS) competition. This is WT Docket No. 02-379.
The FCC will consider a Third Report and Order and Second Further Notice of Proposed Rulemaking regarding issues raised by proposed revisions to satellite and earth station license application forms. This is IB Docket Nos. 02-34 and 00-248.
The FCC will consider a Report and Order regarding it rules regulating unsolicited advertising by telephone and facsimile machine. This is CG Docket No. 02-278.
The meeting will be a 9:30 AM in the FCC's Commission Meeting Room (Room TWC305), at 445 12th Street, SW.
District Court Enters Final Judgment in US v. Village Voice and NT Media
6/19. The U.S. District Court (NDOhio) entered its Final Judgment in U.S.A. v. Village Voice Media and NT Media, an antitrust action involving an agreement between two publishers of weekly city newspapers and web sites to allocate markets. The Final Judgment bars them from taking any action in furtherance of their agreement.
On January 27, 2003, the Department of Justice's (DOJ) Antitrust Division (ATR) filed a complaint in District Court against NT Media (which publishes the New Times weekly city newspapers and web sites) and the Village Voice Media (which publishes the Village Voice weekly city newspapers and web sites) alleging violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. The two count complaint alleges both per se and rule of reason violations of Section 1.
The two companies entered into an agreement to allocate markets. NT agreed to shut down a newspaper in Los Angeles, and in return, Village Voice agreed to shut down a newspaper in Cleveland. The complaint alleges that "The agreements contained essentially identical ``Non-Competition´´ clauses in which each Defendant agreed not to publish an alternative newsweekly in the other Defendant's market for at least ten years. Each Defendant also agreed not to solicit or attempt to induce advertisers to advertise in a competing publication over the next decade."
The parties also agreed to use the web sites of the closed publications to redirect Internet traffic to the web sites of the former competitors. The complaint alleges that "The written agreements further required each Defendant to redirect traffic on its closed newsweekly's website to the other Defendant's website for one year, and to state prominently on its website that its alternative newsweekly was no longer in circulation."
At the time of the filing of the complaint the parties also agreed to a proposed consent decree. See, Hold Separate Stipulation and Order and proposed Final Judgment (PFJ).
On February 12, 2003, the DOJ published a notice in the Federal Register of its PFJ and Competitive Impact Statement. See, Federal Register, February 12, 2003, Vol. 68, No. 29, at Pages 7132-7147.
See also, story titled "DOJ Files Antitrust Complaint Against Newspaper and Web Site Publishers for Allocation of Markets" in TLJ Daily E-Mail Alert No. 592, January 28, 2003.
Sen. Hatch Comments Further About Remedies for P2P Piracy
6/18. Sen. Orrin Hatch (R-UT), Chairman of the Senate Judiciary Committee, issued a statement regarding his off the cuff remarks about copyright infringement on peer to peer (P2P) networks at the June 17 hearing of the Committee.
He stated at that hearing that if no other way can be found to protect copyrighted materials from piracy on P2P networks, "then I am all for destroying their computers".
See, stories titled "Senate Committee Holds Hearing on P2P Networks" and "News Analysis: Hatch Hyperbolizes About Destroying Computers on P2P Networks" in TLJ Daily E-Mail Alert No. 683, June 18, 2003.
He stated in his June 18 release that "I am very concerned about Internet piracy of personal and copyrighted materials, and I want to find effective solutions to these problems."
He added that "I made my comments at yesterday's hearing because I think that industry is not doing enough to help us find effective ways to stop people from using computers to steal copyrighted, personal or sensitive materials."
He concluded that “I do not favor extreme remedies -- unless no moderate remedies can be found. I asked the interested industries to help us find those moderate remedies."
DOJ and Microsoft File Briefs with DC Circuit in CCIA/SIIA Appeal
6/18. The Department of Justice's (DOJ) Antitrust Division filed its brief with the U.S. Court of Appeals (DCCir) in an appeal brought by two non party trade groups to the District Court's denial of their motion to intervene in USA v. Microsoft. In addition, Microsoft filed its brief [29 pages in PDF]. This is A.C. No. 03-5030.
This is the antitrust case filed by the DOJ in 1998. The DOJ and Microsoft reached a settlement in 2001, and filed their Revised Proposed Final Judgment with the District Court. The District Court held that the DOJ and Microsoft had complied with the Tunney Act, and approved the settlement.
Two groups that are not parties to this litigation, the Computer and Communications Industry Association (CCIA) and the Software and Information Industry Association (SIIA), opposed the settlement. They jointly moved for leave to intervene in late 2002. The District Court denied their motion on January 11, 2003. The present appeal followed.
The DOJ wrote in its brief that "The district court conducted a careful and comprehensive Tunney Act review of the proposed consent decree in this government antitrust enforcement action, painstakingly reviewing massive quantities of information, including this Court's prior decision, the government's submissions, Microsoft's submissions, amici's submissions, and an unprecedented number of public comments. It concluded that the consent decree "takes account of the theory of liability advanced by Plaintiffs, the actual liability imposed by the appellate court, the concerns of the Plaintiffs with regard to future technologies, and the relevant policy considerations," and that, with one minor amendment, its entry is in the public interest."
The DOJ added that "Appellants, private trade associations representing many of Microsoft's rivals, nonetheless seek to intervene for the purpose of pursuing their own vision of relief. In so doing, they ignore the legal standards governing intervention and distort the purpose of the Tunney Act."
Assistant Attorney General Hewitt Pate stated in a release that "The Microsoft settlement is in the public interest and the Department remains committed to actively enforcing its terms. As today’s brief explains, the District Court properly rejected CCIA and SIIA's attempt to intervene in this case. Following painstaking review of the record, the District Court correctly found that the Department fully complied with the Tunney Act procedures, and that the settlement was in the public interest."
Microsoft wrote in its brief that "The District Court did not abuse its discretion in denying the request for permissive intervention. CCIA and SIIA failed to establish the requisite commonality between any issues that remain in this litigation and any antitrust claims their members may have against Microsoft. They also failed to comply with Rule 24(c)'s requirement that they file a pleading setting forth the claim or defense for which they sought intervention. With regard to intervention as of right -- which they pursue on appeal only in a footnote in connection with their challenge to the parties' compliance with the Tunney Act's procedural requirements -- CCIA and SIIA did not identify a legally protectable interest sufficient to give them standing to intervene. This Court thus should affirm the District Court’s denial of intervention and dismiss the remainder of this appeal."
Reps. Lofgren and Boucher Address FTAs and DMCA
6/18. Rep. Zoe Lofgren (D-CA) and Rep. Rick Boucher (D-VA) urged passage of two bills that would amend the DMCA to provide exceptions to its anti-circumvention provisions. They also stated that Secretary of Commerce Don Evans has advised them that these bills would not breach the treaty obligations of the U.S. under the negotiated Singapore and Chile free trade agreements (FTA). President Bush signed the Singapore FTA on May 6, 2003, and U.S. Trade Representative (USTR) Robert Zoellick signed the Chile FTA on June 6, 2003. Both require approval by the Congress. See, full story.
6/18. The Copyright Office (CO) published a notice in the Federal Register announcing final rule governing SoundExchange, that takes effect on July 18, 2003. The notice states that this rule "will govern SoundExchange, an unincorporated division of the Recording Industry Association of America, Inc., when it functions as the designated agent for the purpose of receiving royalty payments and statements of accounts from nonexempt subscription digital transmission services which make digital transmissions of sound recordings under a statutory license." See, Federal Register, June 18, 2003, Vol. 68, No. 117, at Pages 36469 - 36470.
Senate Committee Holds Hearing on P2P Networks
6/17. The Senate Judiciary Committee held a hearing titled "The Dark Side of a Bright Idea: Could Personal and National Security Risks Compromise the Potential of Peer to Peer File Sharing Networks". Witnesses praised the benefits of P2P networks, but also cautioned about threats that they pose to the privacy and security of individuals, and to the security of sensitive government records. Witnesses also discussed the problem of pormography on P2P networks that is often disguised a popular music files, thus causing children to unwittingly be exposed.
At the conclusion of the hearing, Sen. Orrin Hatch (R-UT), the Chairman of the Committee, also focused on copyright infringement on P2P networks, and suggested that if no other way can be found to protect copyrighted works from piracy, "destroying computers" should be permitted. See, related story below titled "News Analysis: Hatch Hyperbolizes About Destroying Computers on P2P Networks".
Sen. Hatch was the only member of the Committee to participate. However, Sen. Dianne Feinstein (D-CA), a member of the Committee, appeared at the outset as a witness.
Sen. Hatch stated that "peer-to-peer file-sharing networks are here to stay". He said that they "permit rapid and broad dissemination of information and ideas; and they have provided a powerful tool to researchers, hobbyists, and interested citizens seeking information and ideas on an array of topics. At the same time, however, they have also opened up our homes, our businesses, and our government agencies to potentially serious security risks that are neither widely recognized nor easily remedied."
He also stated that "in government agencies, employee use of P2P networks could also disclose sensitive government data to the enemies of this country. At this moment in history, the implications of this risk are troubling, to say the least."
He also said that "I am also troubled that many P2P networks require their users to install so-called “spyware” or “adware” -- programs that monitor, collect, and report information about the Internet “browsing” habits of a particular user."
Finally, he said that "the users of P2P file-sharing networks may also encounter malicious programs -- such as viruses, worms and Trojan horses -- that have been disguised as popular media files." He added that "If the promoters of these networks acknowledge that their nature increases users' risk of exposure to malicious programs, then they must also recognize their increased duty to protect and educate their users." See, prepared statement, which Sen. Hatch read at the hearing.
Sen. Patrick Leahy (D-VT), the ranking Democrat on the Committee, did not attend. However, he submitted a prepared statement for the record.
The first panel of witness was made up of Sen. Feinstein, Rep. Tom Davis (R-VA), and Rep. Henry Waxman (D-CA).
Sen. Feinstein (at right) read a statement, and then departed to attend another event. She too praised P2P technology. "This technology can be used to help researchers share information or files seamlessly across borders, or to help business people share documents -- in other words, there are legitimate uses for this software."
"But", she continued, "there are also risks." She said that these "networks are also facilitating a new era of easily obtainable pormographic material, including child pormography."
She also cautioned about threats to government records. "Of most concern, however, is the use of peer-to-peer file sharing by government employees." She said that "a federal employee intending to simply download and share music files, therefore, could easily make available every file on his computer, without intending to do so or even realizing it after the fact."
And, she said, "For normal users, this lack of security presents the real threat of identity theft."
Rep. Davis and Rep. Waxman are the Chairman and ranking Democrat on the House Government Reform Committee, which has already held hearings on this issue. Like Senators Hatch and Feinstein, they praised the potential of P2P networks, but cautioned about the associated risks.
Rep. Davis (at right) stated that P2P networks "have become an increasingly popular mechanism for trafficking in pormography, including child pormography. In fact, it seems as if many of these programs have become digital pormographic libraries where all sorts of pormographic materials can be easily accessed for free." He added that "Innocent searches for files using the names of popular cartoon characters, singers, and actors produce thousands of graphic pormographic images, including child pormography."
The second panel of witnesses included Nathaniel Good (a graduate student at UC Berkeley), Randy Saaf (MediaDefender), and Alan Morris (Sharman Networks).
Good presented the results of a survey of users of P2P networks that showed that most users do not know the extent to which files on their hard drives are made available to anyone else. He testified that, due to the nature of the KaZaA software and interface, many users designate their C drive as the location of files which they download, and unwittingly make all of their C drive files available for search and copying.
He testified regarding a study of 12 KaZaA users. "Of the 12 users, only 2 correctly identified that KaZaA intallation had been set to share all files on the hard drive. In addition, only 2 users correctly indicated that all types of files could be shared over a P2P network. 9 of 12 users believed that only multimedia files such as music, video and pictures could be shared."
Saaf used an overhead monitor to present a demonstration of how quickly and easily he was able to use a laptop computer, and a connection at Kinko's, to search for, find, and download Microsoft Money files on strangers' computers.
He also testified that he was able to locate over 2,000 government computers sharing content on P2P networks. For example, there were 236 at the Naval Warfare Systems Command, 155 at the Los Alamos National Laboratory, and many more at other government agencies with sensitive information.
Notably, while the hearing examined "national security risks" of P2P networks, no one from the Department of Defense, FBI, or other defense, national security, intelligence, or law enforcement agency testified at the hearing.
News Analysis: Hatch Hyperbolizes About Destroying Computers on P2P Networks
6/17. Sen. Orrin Hatch (R-UT) stated in off the cuff remarks at the tail end of a hearing on the security threats of P2P networks, that if no other way can be found to protect copyrighted materials from piracy on P2P networks, "destroying computers" may be appropriate. He added that this would first require Congressional legislation.
Sen. Hatch (at right) did not offer a definition of the term "destroying computers". Nor has he introduced or cosponsored any legislation on this subject. However, after his first mention of this, witnesses discussed this as though he meant self help measures by copyright owners or their representatives, of an invasive nature, such as viruses, that would be intended to disable in some way computers or files on P2P networks that are involved in copyright infringement. He did not correct them.
One witness, Randy Saaf of MediaDefender, said that no one wants to use "invasive procedures". He added that "invasive procedures are not being pursued" by any legitimate company.
The final time that Sen. Hatch referenced "destroying" computers, he made these comments. "You know, I, there is no excuse for anybody violating copyright, copyright laws. ... And if they get a copyright, that ought to be respected. If we can find some ways to do this without destroying (inaudible word), I'd recommend we do it. But if that is the only way, then I am all for destroying their computers. (Audience laughter) unless you have a few hundred thousand of those -- I think people would grow up and realize -- but, we would have to pass legislation ..."
Tech Law Journal transcribed the above statement from its audio tape of the hearing. Sen. Hatch softly mumbled. He did not read from a prepared text. And, the audio system in the Senate Judiciary Committee hearing room is of low quality. Hence, there could be errors in the above transcription.
Sen. Hatch has not introduced, or cosponsored, any bill that would authorize, or limit liability for, the destruction of computers used to infringe copyrights, or files on computers used to infringe copyrights. Nor has he previously made a similar statement. Hence, in this sense, this was a major new policy statement by one of the key players on intellectual property issues in the Congress.
The closest policy initiative to this is a bill that was introduced last July by Rep. Howard Berman (D-CA). HR 5211 (107th) provides that "Notwithstanding any State or Federal statute or other law, ... a copyright owner shall not be liable in any criminal or civil action for disabling, interfering with, blocking, diverting, or otherwise impairing the unauthorized distribution, display, performance, or reproduction of his or her copyrighted work on a publicly accessible peer-to-peer file trading network, if such impairment does not, without authorization, alter, delete, or otherwise impair the integrity of any computer file or data residing on the computer of a file trader."
This bill merely refers to disabling files, not "destroying computers". See also, TLJ text of bill, and Rep. Berman's section by section summary.
Rep. Howard Coble (R-NC), the former Chairman of the Subcommittee on Courts, the Internet and Intellectual Property, Rep. Lamar Smith (R-TX), the current Chairman, Rep. Robert Wexler (D-FL), and Rep. Ric Keller (R-FL) cosponsored the bill. Rep. Berman is the ranking Democrat on the Subcommittee.
See also, stories titled "Rep. Berman Introduces Bill to Legalize Self Help Technologies to Disable P2P Piracy" and "News Analysis: The Berman Bill" in TLJ Daily E-Mail Alert No. 478, July 26, 2003.
Sen. Hatch did not reference the HR 5211 (107th), or limitation of liability, at the June 17 hearing.
While Sen. Hatch's statement may be interpreted as a significant new policy statement, it may also be interpreted as an off the cuff exercise in hyperbole, directed at a witness from Sharman Networks who had presented contradicted and incredible testimony regarding the threats that P2P networks pose, in the form of identity theft, theft of personal financial information, threats to the security of sensitive government records, threats of children being exposed to pormography, and threats of widespread copyright piracy.
Had Sen. Hatch intended to make a major policy statement regarding P2P infringement, he would have identified ahead of time that the hearing would cover copyright issues. (The notice of the hearing did not reference copyright.). He would also have made his policy statement at the outset of the hearing, rather than at the tail end. He made his remarks at the end of an afternoon hearing, after most of the reporters who were present at the outset had left the room to write their stories in time to meet filing deadlines. He also would have put this item in his prepared statement, so that persons not present at the hearing could obtain it.
Some witnesses had testified at the hearing about how the interface for KaZaA makes it difficult for many users to avoid making all of the files on their hard drives subject to searches and copying. One witness gave a demonstration of the interface. Another presented the results of a survey showing user confusion.
Then, Alan Morris, EVP of Sharman Networks, the owner and operator of the KaZaA Media Desktop, asserted that it is now "very very hard" for users to unintentionally share files.
He also testified that what is needed is "basic education on security risks for all computer users".
Several witnesses described the volume of pormography available on P2P networks, including child pormography, and testified that some of it is disguised. Rep. Henry Waxman (D-CA) testified that children searching for Britney Spears or Pokeman files could end up getting illegal child pormography. Sen. Patrick Leahy submitted a statement in which he said that P2P networks "may allow sezual predators a way to lure their victims into an instant messaging conversation".
Morris said that "we cannot control what is on the network". He advocated "active and involved parenting" and the use of "filters". Morris also invoked the notion of "democracy" of the internet.
Sen. Hatch pointed out that P2P networks enable the piracy of copyrighted works. Morris said that KaZaA posts notices that say that users should not infringe copyrights.
Sen. Hatch asked Morris, "does Sharman share any responsibility" for what is shared inadvertently or illegally?
"No", said Morris.
In the context of these exchanges that Sen. Hatch then made his comments regarding "destroying computers".
Senate Finance Committee Holds Hearing on Chile and Singapore FTAs
6/17. The Senate Finance Committee held a hearing titled "The Implementation of U.S. Bilateral Free Trade Agreements With Singapore and Chile".
Sen. Charles Grassley (R-IA), the Chairman of the Committee, wrote in his opening statement [PDF] that "The two agreements we are discussing today are the first to be considered under the Trade Promotion Authority (TPA) procedures that Congress implemented last year with the passage of the Trade Act of 2002." He noted that the Trade Act was passed with bipartisan support, and stated that "I hope this bipartisan consensus will carry through while we consider these two agreements."
Sen. Max Baucus (D-MT), the ranking Democrat on the Committee, wrote in his opening statement [PDF] that "These two agreements break new ground on a host of important issues", including "intellectual property, services, and e-commerce".
The U.S. Singapore FTA addresses technology related subjects, including e-commerce, intellectual property rights (IPR), and telecommunications. The U.S. Chile FTA similarly addresses several technology related topics. See, Chapter 13 (telecommunications), Chapter 15 (e-commerce), and Chapter 17 (IPR).
Peter Allgeier, a Deputy U.S. Trade Representative (USTR), included in his prepared testimony [PDF] summaries of the e-commerce, IPR, and telecommunications provisions of two FTAs.
He stated that "The U.S.-Singapore FTA provides for a very high level of IPR protection, including state of the art protections for trademarks and digital copyrights, as well as expanded protection for patents and undisclosed information. These are supported by tough penalties for piracy and counterfeiting, including procedures for seizure and destruction of counterfeit products, the equipment used to produce counterfeit products, and the establishment of statutory and actual damages for violations. Singapore will accede to international Internet treaties, extend the term of protection for copyrighted works, and maintain criminal penalties for circumvention of technology protection measures and for trade in counterfeit goods."
He also said that "The FTA ensures government involvement in resolving disputes between trademarks and Internet domain names, which is important to prevent ``cyber-squatting´´ of trademarked domain names."
"The FTA contains provisions designed to ensure that only authors and other copyright owners have the right the make their works available online. Copyright owners maintain rights to temporary copies of their works on computers, which is important in protecting music, videos, software and text from widespread unauthorized sharing via the Internet."
"The FTA requires that governments only use legitimate computer software, thus setting a positive example for private users. Singapore agrees to prohibit the production of optical discs (CDs, DVDs or software) without a source identification code, unless the copyright holder authorizes (in writing) such production", said Allgeier.
"The FTA provides for limited liability for Internet Service Providers (ISPs), reflecting the balance struck in the U.S. Digital Millennium Copyright Act between legitimate ISP activity and the infringement of copyrights."
He also addressed the e-commerce provision of the Singapore FTA. He said that "No previous U.S. free trade agreement contains such cutting-edge provisions on digital trade as the proposed FTA with Singapore."
"For example", said Allgeier, "the Agreement establishes explicit guarantees that the principle of nondiscrimination applies to digital products delivered electronically, such as software, music, images, videos, or text. This will provide fair treatment and protection to U.S. firms that deliver such digital products via the Internet. The FTA also establishes a binding prohibition on customs duties charged on digital products delivered electronically. For digital products delivered on hard media (such as a DVD or a CD-ROM), customs duties will be based on the value of the media (e.g., the disc), not on the value of the movie, music or software contained on the disc."
He also noted that the Singapore FTA "affirms that any commitments made related to services also extend to the electronic delivery of such services, such as financial services delivered over the Internet. This sets a very good precedent for U.S. services liberalization efforts in the WTO and in other FTAs."
He also addressed the telecommunication provisions of the Singapore FTA. He said that it contains "a full range of market access commitments on telecommunications services, consistent with the regulatory regimes of the U.S. and Singapore." He also said that the FTA "specifies that companies, not governments, will make technology choices, particularly for mobile wireless services, thus allowing firms to compete on the basis of technology and innovation, not on government-mandated standards."
Allgeier similarly addressed the IPR, e-commerce and telecom provisions of the Chile FTA. He said that the "Protection of copyrights, patents, trademarks, and undisclosed trade information in the U.S.-Chile FTA is state of the art, with protections that go beyond previous U.S. free-trade agreements."
He continued that "The Electronic Commerce text in the FTA identifies Chile as a leader in Latin America for the further development of digital trade, as both countries agreed to provisions on electronic commerce that reflect the issue's importance in global trade."
He added that "Chile and the United States committed to non-discriminatory treatment of digital products, agreed not to impose customs duties on such products, and affirmed that commitments made related to services also extend to the electronic delivery of such services. For digital products delivered on hard media (e.g., a DVD or CD), customs duties will be based on the value of the media (e.g., the disc), not on the value of the movie, music or software contained on the disc. Finally, both countries agreed to cooperate in numerous policy areas related to electronic commerce, including on the maintenance of cross-border flows of information."
James Jarrett, of Intel, testified on behalf of the Business Software Alliance (BSA) and High-Tech Trade Coalition (HTTC). He stated in his prepared testimony [6 pages in PDF] the Intel, the BSA and the HTTC support both FTAs.
He said that the "Singapore and Chile FTAs significantly advance the establishment of strong intellectual property protection, tariff-free and barrier-free e-commerce in Singapore and Chile".
He added that "Both agreements recognize the importance of strong intellectual property rights protections in a digital trade environment by building on the obligations in the TRIPS Agreement, and ensuring that works made available in digital form receive commensurate protection by incorporating the obligations set out in the WIPO Copyright Treaty."
He also noted that both agreements contain "Requirements to establish prohibitions against the circumvention of effective technological protection measures employed by copyright owners to protect their works against unauthorized access or use, coupled with the ability to fashion appropriate limitations on such prohibitions, again consistent with those set out in the Digital Millennium Copyright Act."
BIS Amends EAR Regarding Encryption Products
6/17. The Department of Commerce's (DOC) Bureau of Industry and Security (BIS), which is also still known as the Bureau of Export Administration (BXA), published a notice in the Federal Register regarding adoption of amendments to the Export Administration Regulations (EAR). The notice states that these amendments take effect on June 17, 2003, and "clarify when encryption commodities and software may be given de minimis treatment, when short-range wireless devices incorporating encryption may be given mass market or retail treatment, and to provide guidance on when exporters are required to submit encryption review requests."
The notice also states that this set of amendments "also expands the authorizations according to which travelers departing the United States may take encryption for their personal use, and clarifies that specially designed medical equipment and software are not controlled as encryption or ``information security´´ items under the EAR. Finally this rule implements changes to the Wassenaar Arrangement List of dual-use items (agreed upon in the September 2002 meeting and finalized in December 2002) that eliminate from Export Control Classification Number (ECCN) 5A002 certain types of ``Personalized smart cards´´ and equipment specially designed and limited to controlling access to copyright protected data." (Parentheses in original.)
For more information, contact Norman LaCroix at 202 482-4439. See, Federal Register, June 17, 2003, Vol. 68, No. 116, at Pages 35783 - 35787.
OECD Releases Cross Border Fraud Guidelines
6/17. The Federal Trade Commission (FTC), consumer protection agencies of other nations, and the Organisation for Economic Cooperation and Development (OECD), released a document [33 pages in PDF] titled "OECD Guidelines for Protecting Consumers from Fraudulent and Deceptive Commercial Practices Across Borders".
FTC Commissioner Mozelle Thompson stated that "Cross-border fraud, perpetrated through telemarketing, Web sites, and spam, harms consumers and consumer confidence in the global marketplace ... The OECD guidelines announced today reflect an international commitment by consumer protection law enforcement agencies to work together to combat these schemes." See also, FTC release.
These guidelines recommend that the consumer protection agencies of the nations that are members of the OECD cooperate in preventing fraudulent and deceptive commercial practices against consumers. Many of the specific recommendations pertain to internet communications.
These guidelines provide that "Member countries should provide an appropriate mechanism to permit consumer protection enforcement agencies, in conjunction with judicial or administrative authorities and subject to appropriate safeguards, to seek to preserve such evidence, particularly that of a transient nature, in particular investigations until it can be examined. Such a mechanism should also be available in appropriate cases where consumer protection enforcement agencies are assisting agencies in other countries."
Evidence of a transient nature would such things as stored electronic communications held by internet service providers, that is, e-mail. This might implicate the Electronic Communications Privacy Act (ECPA), and similar statutes in other nations.
These guidelines also provide that "To address the need to locate and identify those engaged in fraudulent and deceptive commercial practices, Member countries and their consumer protection enforcement agencies and other competent authorities should, in co-operation with one another and with domain name registrars and other relevant stakeholders, work together to develop options for reducing the incidence of false header and routing information and inaccurate information about holders of domain names."
They also provide that "Member countries should work towards enabling their consumer protection enforcement agencies to share the following information with consumer protection enforcement agencies in other Member countries in appropriate instances: ... Information about addresses, telephones, Internet domain registrations, basic corporate data, and other information permitting the quick location and identification of those engaged in fraudulent and deceptive commercial practices."
6/17. The Internal Revenue Service (IRS) published a notice in the Federal Register stating that it will hold a hearing on proposed regulations relating to the definition of toll telephone service for purposes of the communications excise tax. The hearing will be held at 10:00 AM on September 10, 2003 in room 4718, Internal Revenue Building, 1111 Constitution Avenue, NW. The deadline to submit outlines of topics to be discussed is July 15, 2003. See, Federal Register, June 17, 2003, Vol. 68, No. 116, at Pages 35828 - 35829.
6/17. Microsoft announced that it has filed 15 lawsuits in the U.S. and U.K. pertaining to spam. Microsoft stated in a release that it "filed the legal actions under Washington state's strong antispam law, which provides Internet service providers (ISPs) with the tools to take action against spammers to protect consumers". See, Section 19.190.010, et seq. Microsoft also stated that "two additional civil lawsuits were filed in the United Kingdom, alleging the unlawful harvesting of e-mail account names and other illegal spamming practices under the U.K. Misuse of Computers Act of 1990."
6/17. The Consumer Federation of America (CFA) wrote a letter to member of the Senate Commerce Committee urging them to "to rollback the Federal Communications Commission's (FCC) radical deregulation of the nation's media. The Commission's order is a clear ends-oriented decision directed at helping the largest media companies at the expense of the public and democracy. This decision will diminish the diversity of voices heard over the public airwaves and the coverage of local voices and local issues as media giants buy up local outlets and nationalize the stories they broadcast." The Committee is scheduled to mark up S 1046, the "Preservation of Localism, Program Diversity, and Competition in Television Broadcast Service Act of 2003" on June 19. It was introduced on May 13, 2003, by Sen. Ted Stevens (R-AK) (at right), Sen. Ernest Hollings (D-SC) and others. It would establish by statute a national broadcast television multiple ownership cap of 35%. The FCC has long had a rule providing for a 35% cap. However, on June 2, 2003, the FCC announced that it would raise this cap to 45%. See, FCC release [10 pages in PDF].
Supreme Court Denies Certiorari in Baystate v. Bowers
6/16. The Supreme Court denied certiorari, without opinion, in Baystate v. Bowers, a patent, copyright and contract case involving CAD software. See, Order List [10 pages in PDF], at page 4. This denial lets stand the January 29, 2003, revised opinion of the U.S. Court of Appeals (FedCir) which addressed federal preemption, shrink wrap contracts, and reverse engineering. Basically, a shrinkwrap contract barred reverse engineering of a software program. A divided Appeals Court held that the Copyright Act does not preempt state contract law that allows parties to impose a ban on reverse engineering. See, full story.
Senate Commerce Committee to Hold Mark Up Session
6/16. The Senate Commerce Committee will hold a meeting on Thursday, June 19, to mark up 14 bills, including several technology and communications related bills. The agenda includes a FCC reauthorization bill, a FTC reauthorization bill, the Commercial Spectrum Enhancement Act, a nanotechnology bill, a spam bill, and a media ownership bill. See, SCC release.
McCain FCC Reauthorization Bill (S 1264). The agenda includes S 1264, the "Federal Communications Commission Reauthorization Act of 2003", sponsored by Sen. John McCain (R-AZ). Despite its title, this bill is actually a wide ranging bill that would accomplish far more than merely authorizing appropriations for the FCC for fiscal years 2004 through 2007.
It also contains many significant substantive provisions pertaining to media ownership rules, e-rate fraud, FCC enforcement, private causes of actions against common carriers, lobbying by former FCC officials, and the effect of bankruptcy on spectrum auctions. See, story titled "Sen. McCain Introduces Telecom Bill" in TLJ Daily E-Mail Alert No. 681, June 16, 2003.
Spectrum Relocation Fund Bill (S 865). The agenda also includes S 865, the "Commercial Spectrum Enhancement Act", sponsored by Sen. McCain and others. This is the Senate companion bill to HR 1320, which is also titled the "Commercial Spectrum Enhancement Act". The House passed its version of this bill on June 11, 2003, by a vote of 408-10. See, Roll Call No. 260.
This bill would change the process for reallocating spectrum from federal users to commercial users, such as for Third Generation (3G) wireless services. For example, the Department of Defense (DOD) currently uses spectrum in the 1710-1755 MHz band. The National Telecommunications and Information Administration (NTIA) and Federal Communications Commission (FCC) have identified this band for reallocation for 3G services. The DOD will incur expenses to relocate to other spectrum bands. The bill would create a Spectrum Relocation Fund, funded by auction proceeds, to compensate federal agencies for the cost of relocating. The bill would replace the current role of the House and Senate Appropriations Committees.
See also, TLJ story titled "House Subcommittee Holds Hearing On Commercial Spectrum Enhancement Act", March 25, 2003; story titled "House Subcommittee Approves Spectrum Relocation Fund Bill" in TLJ Daily E-Mail Alert No. 641, April 10, 2003; story titled "House Commerce Committee Passes Spectrum Relocation Bill" in TLJ Daily E-Mail Alert No. 653, May 1, 2003; and story titled "House Passes Commercial Spectrum Enhancement Act" in TLJ Daily E-Mail Alert No. 679, June 12, 2003.
Stevens/Hollings Media Ownership Bill (S 1046). The agenda also includes S 1046, the "Preservation of Localism, Program Diversity, and Competition in Television Broadcast Service Act of 2003". It was introduced on May 13, 2003, by Sen. Ted Stevens (R-AK) (at right), Sen. Ernest Hollings (D-SC) and others.
It would establish by statute a national broadcast television multiple ownership cap of 35%. Specifically, the bill provides that the FCC "shall not permit any license for a commercial television broadcast station to be granted, transferred, or assigned to any party (including all parties under common control) if the grant, transfer, or assignment of such license would result in such party or any of its stockholders, partners, or members, officers, or directors, directly or indirectly, owning, operating or controlling, or having a cognizable interest in television stations which have an aggregate national audience reach exceeding 35 percent." (Parentheses in original.)
The FCC has long had a rule providing for a 35% cap. However, on June 2, 2003, the FCC announced that it would raise this cap to 45%.
The FCC stated in a press release [10 pages in PDF] that the "FCC incrementally increased the 35% limit to a 45% limit on national ownership." The FCC elaborated that "A company can own TV stations reaching no more than a 45% share of U.S. TV households." It added that "The share of U.S. TV households is calculated by adding the number of TV households in each market that the company owns a station. Regardless of the station's ratings, it is counted for all of the potential viewers in the market. Therefore, a 45% share of U.S. TV households is not equal to a 45% share of TV stations in the U.S."
See, stories titled "FCC Announces Revisions to Media Ownership Rules" and "Reaction to the FCC's Media Ownership Announcement" in TLJ Daily E-Mail Alert No. 672, June 3, 2003.
Burns/Wyden Spam Bill (S 877). The agenda also includes S 877, the "Controlling the Assault of Non-Solicited Pormography and Marketing Act of 2003", or "CAN-SPAM Act". This bill was introduced on April 10, 2003, by Sen. Conrad Burns (R-MT), Sen. Ron Wyden (D-OR), and others.
The bill would create civil bans on sending unsolicited commercial e-mail (UCE) with false header information, or with intentionally false or misleading content. It would also require UCE senders to include a return e-mail address, and ban sending further UCE to persons who have objected to receiving more UCE. It would also ban the practice of sending UCE to lists of addresses that have been harvested from websites by automated means.
The bill would give enforcement authority to the Federal Trade Commission (FTC), states, and internet access providers, but not individuals. The bill would preempt state UCE laws, with exceptions.
Senators Burns and Wyden also introduced anti-spam legislation in the 106th and 107th Congresses. Their bill in the last Congress, S 630 (107th), was approved by the Senate Commerce Committee on May 17, 2002. However, the full Senate did not pass the bill.
See, story titled "Senators Burns and Wyden Re-Introduce Can Spam Bill" in TLJ Daily E-Mail Alert No. 643, April 14, 2003.
Other Bills. The agenda also includes S 189, the "21st Century Nanotechnology Research and Development Act", introduced on January 16, 2003 by Sen. Wyden, Sen. George Allen (R-VA) and others; S 1234, the "Federal Trade Commission Reauthorization Act of 2003", sponsored by Sen. McCain and Sen. Gordon Smith (R-OR); and S 1260, the "Commercial Space Transportation Act of 2003", sponsored by Sen. McCain and Sen. Sam Brownback R-KS).
The meeting will be held at 9:30 AM in Room 253 of the Russell Building.
6/16. The Federal Communications Commission (FCC) released its annual report [18 pages in PDF] to the Congress, as required by the Open-Market Reorganization for the Betterment of International Telecommunications Act (ORBIT Act), on progress in achieving a competitive global marketplace for satellite communication services.
6/16. The Federal Communications Commission (FCC) released an order [8 pages in PDF] granting Sprint Spectrum a limited waiver and extension of the Enhanced 911 Phase II deadline.
6/16. After releasing several non tech related opinions, and an order list, the Supreme Court announced that "The Court will take a recess from today until Monday, June 23, 2003." See, Order List [10 pages in PDF], at page 4.
6/16. Rep. Bob Filner (D-CA) spoke in the House regarding the Federal Communications Commission's (FCC) triennial review order, which the FCC announced in February, but has yet to release. Rep. Filner said that "I think that the initial stands for ``Forget Consensus in Congress.´´" He said that "the FCC missed the opportunity to bring clarity to the rules that promote facilities-based competition and would spur investment and create jobs. Instead, it has punted the decision to the States, all 50 of them. This move will force more State proceedings, more regulatory uncertainly, and without a doubt, more delay. See, Congressional Record, June 16, 2003, at page H5370.6/16. Rep. Barney Frank (D-MA) introduced HR 2478, the "Cable Consumer Rights Act of 2003", a bill to reinstate the authority of the Federal Communications Commission (FCC) to regulate cable television service rates. The bill would repeal Section 301(b) of the Telecommunications Act of 1996, and reinstate Section 623 of the Communications Act of 1934. The bill was referred to the House Commerce Committee.
6/16. Rep. Chris Cox (R-CA) and others introduced HRes 277, a resolution expressing support for freedom in Hong Kong. It states that "the traditional liberties of Hong Kong's 7,000,000 people are now immediately threatened by Hong Kong's proposed `Article 23´ laws, which were drafted under strong pressure from the Government of the People's Republic of China, dealing with sedition, treason, and subversion against the Chinese Communist Party". It adds that "similar subversion laws in the People's Republic of China are regularly used to convict and imprison journalists, labor activists, Internet entrepreneurs, and academics". Therefore, HRes 277 provides that it is "Resolved, That the House of Representatives ... condemns any restriction of the freedom of thought, expression, or association in Hong Kong".
Go to News from June 11-15, 2003.