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8/10. Federal Reserve Board (FRB) Governor Susan Bies gave a speech in San Francisco, California about the role that legal counsel and other professionals should play in ensuring effective corporate governance in the aftermath of the WorldCom and other scandals.

Broadcom and Intel Settle Patent Suits

8/8. Broadcom and Intel announced they have settled all outstanding litigation between the companies as well as all litigation involving their affiliates pending in various U.S. federal courts, and in the U.S. International Trade Commission.

They stated that "Under the settlement agreement, all outstanding claims and counterclaims in those actions will be dismissed with prejudice. The parties also entered into reciprocal releases covering all patent claims and certain other claims. In connection with the settlement, Broadcom will pay Intel $60 million in cash in two equal installments in the third and fourth fiscal quarters of 2003." See, Intel release and substantially identical Broadcom release.

The two companies also stated that "Broadcom and Intel entered into a separate comprehensive cross-license agreement covering patents owned or controlled by either party or its subsidiaries, and having a first effective filing date, at any time through August 7, 2008. Under the agreement, products of each party and its subsidiaries are licensed under the patents of the other for the respective lives of the patents. All existing products of each party are licensed by the other. Certain proprietary products of each party are not licensed to the other, but neither company believes that the license exceptions are material to its business as currently conducted or planned. No fees or royalties are payable by either party with respect to its business as currently conducted or planned."

See, for example, complaint filed August 30, 2000, in the U.S. District Court (DDel) by Intel, and TLJ story titled "Intel Sues Broadcom for Patent Infringement", September 4, 2000.

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8/8. The Federal Communications Commission (FCC) published a notice in the Federal Register describing and reciting its rule changes to its rule implementing the Children's Internet Protection Act (CIPA). The FCC released its Order on July 24, 2003. The CIPA requires schools and libraries receiving e-rate subsidies from the FCC to certify that they have internet safety policies and technology protection measures. This is part of Docket No. 96-45. See, Federal Register, August 8, 2003, Vol. 68, No. 153, at Pages 47253 - 47255.

8/8. Oracle announced in a release that "it has extended its previously announced tender offer for all of the common stock of PeopleSoft, Inc. to midnight EDT on Friday, September 19, 2003. ... The tender offer was previously set to expire at midnight EDT on Friday, August 15, 2003."

8/8. The U.S. District Court (SDNY) ruled in Motorola v. Uzan on defendants' motion to stay the court's $4.26 Billion judgment against the Uzans pending appeal. Motorola stated in a release that the Court "agreed to stay execution of the judgment pending appeal until August 15, 2003, and thereafter, only if the Uzans post a $1 billion bond by that date." On July 31, 2003, the Court issued its Opinion and Order [172 pages in PDF] holding defendants liable for common law fraud, promissory fraud, and civil conspiracy to defraud, and awarding Motorola Credit Corporation (MCC) over $4 Billion in compensatory damages, punitive damages, and interest. See, story titled "Judge Awards Motorola $4,265,793,811.32 From Turkish Telecom Deadbeats" in TLJ Daily E-Mail Alert No. 709, August 1, 2003.

8/5. DirecTV stated in a release that "DIRECTV, Inc. and NDS Group plc announced today that they have agreed to stay the litigation between them pending in the U.S. District Court in Los Angeles, Calif. The stay will continue until the anticipated closing of the acquisition by NDS' parent company, The News Corporation Limited, of 34 percent of DIRECTV's parent company, Hughes Electronics Corporation. The acquisition is currently undergoing regulatory review and is expected to close by year-end, upon which the litigation and all claims and counterclaims alleged therein, will be dismissed with prejudice. The companies further announced that DIRECTV will begin deploying a new conditional access viewing card, known as the D1 card, which contains technology contributed by both DIRECTV and NDS. NDS and DIRECTV have also agreed to discuss plans for future generations of conditional access viewing cards to be used by DIRECTV. In connection with their agreement to stay the litigation, the parties have entered into specified commercial arrangements, which include resolving outstanding payment issues with respect to the P4 and D1 viewing cards."

FCC and NTIA Announce Timetable for Implementation of WRC-03 Final Acts

8/7. The Federal Communications Commission (FCC) and the Department of Commerce's (DOC) National Telecommunications and Information Administration (NTIA) announced a plan for implementation in the U.S. of the Final Acts of the 2003 World Radiocommunications Conference (WRC-03). See, NTIA release and substantially identical FCC release [3 pages in PDF].

The FCC plans, among other things, to issue, this year, its Report and Order in its NPRM regarding making more spectrum available for unlicensed devices, such as Wi-Fi. The FCC also plans to issue this year a Report and Order allocating spectrum for broadband internet access by passengers and crew on commercial aircraft.

The release states that "Under the WRC-03 Implementation Plan, the FCC, in coordination with NTIA, plans to consider the results of WRC-03 in several key proceedings". It then states that during the "Fourth Quarter 2003" it plans to consider "Revisions of Parts 2 and 15 of the Commission's rules to permit Unlicensed National Information Infrastructure (U‑NII) devices in the 5 GHz band -- Report and Order". It also states that its fourth quarter plans include "Extension of the allocation to the mobile-satellite service (Earth-to-space) on a secondary basis in the band 14-14.5 GHz to permit operation of the aeronautical mobile-satellite service -- Report and Order". (Parentheses in original.)

International Telecommunications Union's (ITU) WRC-03 took place in Geneva, Switzerland from June 9 through July 4, 2003. The conference addressed a large number of issues, and adopted its "Final Acts". Two items addressed by the conference particularly affect information technology. One item pertains to allocating spectrum in the 5 GHz band for use by unlicensed devices, including, but not limited to, WiFi devices. Another item pertains to allocating spectrum for broadband access by passengers and crew on commercial aircraft.

Prior to the conference, on May 15, 2003, the Federal Communications Commission (FCC) adopted a Notice of Proposed Rulemaking (NPRM) [28 pages in PDF] proposing to make available an additional 255 MHz of spectrum for unlicensed use. This NPRM proposed allocating the 5.470-5.725 GHz band. See also, FCC press release [PDF], and stories titled "FCC Adopts NPRM to Increase Unlicensed Spectrum" and "FCC Unlicensed Spectrum NPRM and the Jumpstart Broadband Act" in TLJ Daily E-Mail Alert No. 663, May 16, 2003, and "FCC Releases NPRM Regarding Increasing Amount of Unlicensed Spectrum" in TLJ Daily E-Mail Alert No. 674, June 5, 2003.

The resolution adopted by the WRC-03 on spectrum for unlicensed devices, and that is a part of the Final Acts, parallels the proposal contained in the FCC's NPRM.

And now, in the August 7 statements by the FCC and NTIA, the FCC states that it plans to complete this NPRM in the fourth quarter of 2003.

The WRC-03 also approved a secondary allocation for aeronautical mobile satellite services in the 14-14.5 GHz band for the provision of internet and other data services on aircraft. Boeing plans to provide real time two way broadband services on its aircraft for passengers and crew. However, prior to the WRC-03, the international table of frequency allocations provided that the 14-14.5 GHz band could not be used for "aeronautical mobile services". The WRC-03 Final Acts deleted this exclusion.

And now, in the August 7 statements by the FCC and NTIA, the FCC states that it plans to issue its report and order on this matter in the fourth quarter of 2003.

See also, stories titled "FCC Meeting Addresses WRC-03" in TLJ Daily E-Mail Alert No. 696, July 11, 2003; and "Delegates Discuss World Radiocommunications Conference" in TLJ Daily E-Mail Alert No. 703, July 22, 2003.

FCC Hosts Tutorial on Fiber to the Home

8/7. The Federal Communications Commission (FCC) hosted a tutorial on August 7 on Fiber to the Home (FTTH) technology.

The primary speaker was Jim Farmer, VP of the Fiber to the Home Council. Leonard Ray of the FTTH Council also spoke. Ray stated that as of March of 2003, 110,000 homes were passed by fiber, and that 38,000 are connected, for a take rate of 35%. He added that of the homes passed by fiber, 70% are "over build", as opposed to "green field".

On February 20, 2003, the FCC asserted that it adopted an order regarding the Section 251 unbundling obligations of incumbent local exchange carriers (ILECs). This is also known as the triennial review order. However, the FCC has not released this order. The FCC has issued only a short press release [2 pages in PDF] and an attachment [4 pages in PDF].

The FCC's attachment to its press release briefly addresses FTTH. It states that "There is no unbundling requirement for new build/greenfield FTTH loops for both broadband and narrowband services. There is no unbundling requirement for overbuild/brownfield FTTH loops for broadband services. Incumbent LECs must continue to provide access to a transmission path suitable for providing narrowband service if the copper loop is retired." See also, TLJ stories on the FCC's announcement of it triennial review order.

Farmer stated that one of the advantages of fiber is its "tremendous information carrying capacity". As an example, he provided estimates for how long is would take to receive a copy of the movie "Braveheart" by different technologies. He stated that with a 56 kbps modem, it would take two days to download the movie. With a 128 kbps ISDN line, it would take 20 hours. FedEx could ship a DVD in 12 hours. With a 1 mbps downstream DSL connection, it would take two and a half hours. With a 2.5 mbps downstream cable modem, it would take 45 minutes. And, with FTTH, it would take less than one minute.

He listed other advantages of FTTH technology, including that it has few maintenance problems, it carries a signal a greater distance than electrical signals, it is easier to provide near symmetric rates with FTTH that with DSL or cable, its small size makes it easier to fit into existing crowded ducts, it is not affected by electrical interference, and it lasts a long time.

Farmer also reviewed the structure of fiber optic cables, the different types of lasers, single and dual fiber systems, the different wavelengths being used, and ATM and ethernet transport. He also reviewed FTTH architectures, including Passive Optical Networks (PONs), Active Node, and Hybrid PONs. He also covered security, telephony, and other topics.

FRB Governor Addresses Banking Operational Risks and Information Technology

8/7. Federal Reserve Board (FRB) Governor Susan Bies gave a speech in Des Moines, Iowa titled "The Role of Community Bank Directors in Strengthening Corporate Governance". She addressed, among other things, the relationship between operational risk and information technology in community banking.

She explained that "operational risk" is "any risk that arises from inadequate or failed internal processes, people, or systems or from external events. Examples of operational risk include employee fraud, customer lawsuits, failed information system conversions, and mis-sent wires."

Bies (at right) stated that "Operational risk has always been part of banking. But the greater variety of products and services that banks provide, the evolution of business processes (including substantially greater reliance on information technology and telecommunications), and changes in the ethical environment in which we live have all contributed to more observable exposures to this type of risk. Many of the community bank failures in recent years have been due to operational risks. In a few cases, dominant chief executives perpetrated frauds by manipulating the internal controls. In others, the management information systems necessary to monitor exposures in riskier lines of business were never built. As a result, other managers and the boards did not have the information necessary to monitor and understand the growing risks inherent in what appeared to be profitable strategies." (Parentheses in original.)

FTC Files Administrative Complaint Seeking Rescission of Aspen Tech's Acquisition of Hyprotech

8/7. The Federal Trade Commission (FTC) filed an administrative complaint [10 pages in PDF] seeking to rescind the recent acquisition by Aspen Technology, Inc. of Hyprotech Ltd. The FTC alleges that the acquisition combined two competing software makers in violation of the FTC Act and the Clayton Act. See also, FTC release.

The complaint states that "AspenTech is a developer and worldwide supplier of manufacturing, engineering, and supply chain simulation computer software, including non-linear process engineering simulation software used by the refining, oil & gas, petrochemical, specialty chemical, air separation, pharmaceutical, fine chemical and other process manufacturing industries and by engineering and construction companies to support those industries."

The complaint further states that before its acquisition by AspenTech, "Hyprotech was a wholly-owned operating division of AEA Technology plc. ... Hyprotech had been a developer and worldwide supplier of manufacturing, engineering and supply chain simulation computer software, including nonlinear process engineering simulation software used by the refining, oil & gas, petrochemical, specialty chemical, air separation, pharmaceutical, fine chemical and other process manufacturing industries and by engineering and construction companies to support those industries."

The complaint states that AspenTech acquire Hyprotech on or about May 31, 2002, in a transaction that was not reportable under the Hart Scott Rodino Act.

The FTC alleges that prior to the acquisition, "AspenTech and Hyprotech were direct and actual competitors" in various software markets, and that the acquisition created a worldwide dominant firm in these markets, and is anticompetitive.

The FTC alleges that the acquisition violates Section 7 of the Clayton Act, 15 U.S.C. § 18. It seeks rescission of the consummated transaction.

David McQuillin, P/CEO of AspenTech, stated in a release that "We do not agree with the FTC’s assertions but, on the contrary, are confident that the acquisition has brought significant benefits to our customers and is not anticompetitive ... Over the past year we have worked closely with our customers to develop new innovations that would have been impossible prior to the merger. We will continue to bring these new innovations to market and fulfill our customers’ expectations promised by the merger. We believe a vigorous defense against the allegations of the complaint is in the best interests of our customers and our shareholders and that is what we intend to do."

People and Appointments

8/7. The Federal Bureau of Investigation (FBI) reorganized its Office of Public and Congressional Affairs (OPCA) into two offices. Eleni Kalisch was named Assistant Director in charge of the new Office of Congressional Affairs (OCA). Cassandra Chandler was named Assistant Director in charge of the new Office of Public Affairs (OPA). See, FBI release.

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8/7. Federal Communications Commission (FCC) Commissioner Michael Copps issued a release [PDF] in which he complained about the FCC's lack of action against a sleazy broadcaster in New York City. The release states that "Last August WNEW-FM in New York ran an Opie & Anthony show which allegedly contained a broadcast of sexual activity at St. Patrick’s Cathedral as part of an on-air stunt", and the FCC has received complaints, but taken no action. Copps stated that "The time has come for the Commission to send a message that it is serious about enforcing the indecency laws. Yet, we continue to turn a deaf ear to the millions of Americans who are fed up with the patently offensive programming coming their way so much of the time." The FCC has fined Infinity Broadcasting, Inc., the licensee of WNEW(FM), for other evil broadcasting. See, June 6, 2002 Notice of Apparent Liability for Forefeiture.

8/7. Rep. Bob Goodlatte (R-VA) stated in a release that he traveled to Costa Rica and met with members of the Costa Rica Legislative Assembly regarding internet gambling. The release states that "While Internet gambling is illegal in Costa Rica, there are sufficient loopholes in the existing law to allow Internet gambling businesses to create companies in the country which provide services to support the Internet gambling industry. It is estimated that there are as many as 5,000 people presently employed in these Internet gambling service jobs in Costa Rica." Rep. Goodlatte stated that "The United States has a vested interest in seeing the government of Costa Rica increase the oversight of these off-shore gambling sites, most of which are doing direct business, illegally, with people in the United States ... Any time there is such a massive unregulated flow of funds, it is ripe for corruption and crime."

8/7. The California Court of Appeal issued its opinion [MS Word] in Sargent Fletcher v. Able Corp., a case regarding the burden of proof and the burden of producing evidence in a misappropriation of trade secrets case brought under the California Uniform Trade Secrets Act (UTSA). This is Sargent Fletcher, Inc. v. Able Corporation, No. B145831, an appeal from the Superior Court of Los Angeles County, Judge Harold Cherness presiding, Super. Ct. No. KC025385.

8/7. The U.S. Court of Appeals (FedCir) issued its split opinion [MS Word] in HP v. Mustek, a patent infringement case involving optical scanner technology. This is Hewlett Packard Company v. Mustek Systems, Inc. and Mustek, Inc., Nos. 02-1372, 02-1395, and 02-1465, appeals from the U.S. District Court (SDCal), Judge Robert Whaley presiding.

Judge Posner Opines On Amicus Briefs

8/6. Judge Richard Posner of the U.S. Court of Appeals (7thCir) issued a solo opinion [7 pages in PDF] in Voices for Choices v. Illinois Bell Telephone. This case is an appeal from a District Court decision which held that portions of the state of Illinois's Public Utilities Act are preempted by Section 251 of the Communications Act, pertaining to interconnection. However, this opinion does not address the merits of the appeal. Rather, it is an opinion explaining his reasons for refusing to accept two amicus curiae briefs. The Judge could have accepted the briefs, and then ignored them. But instead, he used this case as a vehicle for comparing and contrasting the natures of the legislative and judicial processes, and explaining the appropriate and inappropriate uses of amicus briefs. In short, he ordinarily does not expect individual legislators and interests groups to submit amicus briefs.

The Defendants below, and the appellants before the Seventh Circuit, are Illinois Bell Telephone Company, and other SBC companies. They filed an appeal brief.

The Speaker of the Illinois House, Michael Madigan, and the President of the Illinois Senate, Emil Jones, filed a motion for leave to file an amicus curiae brief. The Communications Workers of America also sought leave to file an amicus brief. They support the position of SBC on appeal.

Judge Posner first listed several general reasons why a court might not accept amicus briefs: "judges have heavy caseloads and therefore need to minimize extraneous reading; amicus briefs, often solicited by parties, may be used to make an end run around court-imposed limitations on the length of parties' briefs; the time and other resources required for the preparation and study of, and response to, amicus briefs drive up the cost of litigation; and the filing of an amicus brief is often an attempt to inject interest group politics into the federal appeals process."

He then explained the nature of the legislative and judicial processes. "The legislative process is democratic, and so legislators have an entirely legitimate interest in determining how interest groups and influential constituents view a proposed statute. Statutes pass because there is more political muscle behind than in front of them, not because they are ``wise´´ or ``just,´´ though they may be. The judicial process, in contrast, though ``political´´ in a sense when judges are asked to decide cases that conventional legal materials, such as statutory and constitutional texts and binding precedent, leave undetermined, so that some mixture of judges' values, temperament, ideology, experiences, and even emotions is likely to determine the outcome, is not democratic in the sense of basing decision on the voting or campaign-financing power of constituents and interest groups. An appeal should therefore not resemble a congressional hearing."

He continued that "The fact that powerful public officials or business or labor organizations support or oppose an appeal is a datum that is irrelevant to judicial decision making, except in a few cases, of which this not one, in which the position of a nonparty has legal significance. And even in those cases the position can usually be conveyed by a letter or affidavit more concisely and authoritatively than by a brief."

He concluded that "No matter who a would-be amicus curiae is, therefore, the criterion for deciding whether to permit the filing of an amicus brief should be the same: whether the brief will assist the judges by presenting ideas, arguments, theories, insights, facts, or data that are not to be found in the parties’ briefs. The criterion is more likely to be satisfied in a case in which a party is inadequately represented; or in which the would-be amicus has a direct interest in another case that may be materially affected by a decision in this case; or in which the amicus has a unique perspective or specific information that can assist the court beyond what the parties can provide."

He reviewed the amicus briefs, and found that they are largely redundant of the SBC brief. "Essentially, the proposed amicus briefs merely announce the ``vote´´ of the amici on the decision of the appeal. But, as I have been at pains to emphasize in contrasting the legislative and judicial processes, they have no vote."

This case is Voices for Choices, et al. v. Illinois Bell Telephone Co., et al., Nos. 03-2735 and 03-2766, appeals from the U.S. District Court for the Northern District of Illinois, Eastern Division, Judge Charles Kocoras presiding, D.C. Nos. 03-3290 and 03-3643.

Judge Posner has addressed amicus briefs before. See, his opinion in John Ryan v. Commodity Futures Trading Commission, 125 F.3d 1062 (7thCir. 1997). He wrote that "amicus curiae" means "friend of the court, not friend of a party", and that "We are beyond the original meaning now; an adversary role of an amicus curiae has become accepted".

He also gave a lecture in Washington DC in November of 2002 in which he discussed the filing of amicus curiae briefs with the Supreme Court in intellectual property cases. He stated that "Although an amicus curiae brief can be filed by an individual, most are filed either by organizations, or by individuals who are representatives of organizations. They may be pretending to be real flesh and blood human beings. So, I think amicus curiae brief practice provides some clue to the roll of interest groups in the area of law."

Judge Posner was reviewing amicus briefs as possible empirical evidence in support of his public choice theory based explanation for what he saw as a large expansion of intellectual property protections in the last 20 years. He continued that "since 1980 the Supreme Court has decided 30 intellectual property cases in which amicus curiae briefs were filed, and which there was an issue of, a substantive issue of intellectual property, rather than a procedural or jurisdictional issue that would be peripheral to, of peripheral interest to the intellectual property. And now, there is a 31st case, the Eldred case, which is pending in the Supreme Court. And in these 31 cases, including Eldred, a total of 276 amicus curiae briefs supporting or opposing intellectual property protection were filed, and a pretty healthy majority, 154 out of the 276, almost 60 percent, support intellectual property rights. But it turns out that this imbalance in favor of intellectual property, which you would sort of expect from this asymmetry of appropriability that I have been emphasizing, is actually due entirely to the 11 patent cases in my 31 case sample, where 82 briefs were filed in support of validity, or other claim of the patentee, and only 48 against. In the other cases the score is 72 in support of intellectual property rights, and 74 against. So, basically, 50 50. And, in the Eldred case itself, despite the enormous majority by which the Sony Bono Act, the Act challenged in the case, passed Congress, 36 amicus curiae briefs were filed, and 18 are in support of the constitutionality of the Bono Act, and the other 18 are opposed."

He added that "that interest group pressure is not always necessary to get legislation passed. It is certainly not necessary to get judges to adopt a particular position."

What is notable about this analysis is that Judge Posner examined interest group participation in the Courts as possible evidence in support of a public choice explanation of law making that encompasses the judicial process. Thus, he examined the judicial process (and its interest group amici), as though it may operate like the legislative process (and its interest group lobbyists). In contrast, in his Voices for Choices and John Ryan opinions, Posner argued that the judicial process should not operate like the legislative process.

Bankruptcy Court Approves SEC MCI WorldCom Settlement

8/6. The U.S. Bankruptcy Court (SDNY) issued an order approving the Securities and Exchange Commission's (SEC) settlement with MCI WorldCom. See, SEC release.

The settlement provides for a civil penalty of $2.25 Billion, to be satisfied by payment of $500 Million in cash and by transfer of common stock in the reorganized company having a value of $250 Million to a distribution agent to be appointed by the District Court, on the effective date of the plan of reorganization.

On July 7, 2003, the U.S. District Court (SDNY) issued issued its Opinion and Order approving the settlement. See, story titled "District Court Approves SEC Settlement with WorldCom" in TLJ Daily E-Mail Alert No. 693, July 8, 2003.

Stasia Kelly, MCI WorldCom's newly appointed General Counsel, stated in a release that "Today's ruling represents a key milestone as MCI moves toward emergence from Chapter 11 protection. It represents additional validation of all the positive steps the company has taken over the past year to both put its house in order and establish itself as a leader in good corporate governance. We look forward now to completing our confirmation hearing and emerging from Chapter 11 protection."

This is In re WorldCom, Inc., et al., Ch. 11 Case No. 02-13533 (Bankr. S.D.N.Y.)

DOJ Files Brief with Appeals Court in Challenge to Consent Judgment in Microsoft Case

8/6. The Department of Justice's (DOJ) Antitrust Division filed its brief with the U.S. Court of Appeals (DC) in U.S. v. Microsoft. This brief pertains to the appeal of the Computer & Communications Industry Association (CCIA) and the Software and Information Industry Association (SIIA) of the entry of the consent decree in the government's antitrust case against Microsoft. On December 20, 2003, the CCIA and SIIA filed a motion and memorandum [25 pages in PDF] with the U.S. District Court (DC) seeking leave to appeal the November 12, 2002 Final Judgment. The pertinent fact is that neither the CCIA nor the SIIA are parties to the case. The District Court denied the motion. This appeal followed.

The DOJ brief states that the issues on appeal are "Whether the district court abused its discretion in denying appellants' motion for leave to intervene for purposes of appeal of the entry of a consent judgment" and "If the Court reversed the denial of appellants' motion, two additional issues would be presented: A. Whether the district court abused its discretion in determining that there were no procedural obstacles to entry of the consent decree; and B. Whether the district court abused its discretion in concluding that entry of the consent decree was in the public interest."

The DOJ brief argues that the District Court, in approving the consent judgment, "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 continues 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."

The brief argues that the District Court "properly exercised its discretion in denying permissive intervention for purposes of appeal", that "the government fully complied with Tunney Act procedural requirements", and that the District Court "properly found the decree to be in the public interest".

See also, stories titled "CCIA and SIIA Seek to Appeal as Amici in Microsoft Case" in TLJ Daily E-Mail Alert No. 573, December 23, 2002; "DOJ Opposes CCIA and SIIA Attempt to Appeal in Microsoft Antitrust Case" in TLJ Daily E-Mail Alert No. 577, January 7, 2003.

This is District Court Civil Action No. 98-1232 (CKK), and Appeals Court No. 03-5030.

EC Releases Statement About Its Microsoft Antitrust Investigation

8/6. The European Union (EU) issued a release regarding the European Commission (EC) antitrust investigation of Microsoft. It states that the EC "has gathered additional evidence from a wide variety of consumers, suppliers and competitors. This evidence confirms and in many respects bolsters the Commission's earlier finding that Microsoft is leveraging its dominant position from the PC into low-end servers and that Microsoft's tying of Windows Media Player to the Windows PC operating system weakens competition on the merits, stifles product innovation, and ultimately reduces consumer choice."

The EU also stated that the EC "invites Microsoft to submit its comments on a series of remedies it intends to impose in order to bring the antitrust infringements it has identified to an end. As this complex investigation draws to a close, the Commission will continue to ensure a meticulous respect of due process. Therefore, the Commission has addressed to Microsoft a final Statement of Objections."

Ed Black, P/CEO of the Computer & Communications Industry Association (CCIA), stated in a release that "The Commission’s statement today should also lay to rest any doubt that Mario Monti is committed to ending Microsoft’s illegal abuse of its interlocking monopolies." He also stated that the EC should require Microsoft to make a version of Windows XP with Media Player, and mandate "interface disclosure requirements to ensure interoperability of competitors products with Windows in the low-end server market".

Black added that "The European Commission now has the opportunity to adopt remedies which can actually break Microsoft’s monopoly stranglehold on consumers, PC manufacturers and software developers, something no other competition authority anywhere has yet managed to do".

People and Appointments

8/6. Ann Malester was named Deputy Director of the Federal Trade Commission's (FTC) Bureau of Competition. She has been Assistant Director for Mergers I, which has reviewed proposed mergers in the pharmaceutical, biotechnology, medical device, and defense and aerospace industries, since 1991. Steven Bernstein will replace Malester as Assistant Director for Mergers I. He has been a FTC staff attorney for 12 years. See, FTC release.

8/6. Michelle Dennedy was named Chief Privacy Officer of Sun Microsystems. See, Sun release.

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8/6. The Federal Trade Commission (FTC) published a notice in the Federal Register in which it announced that it has authorized the Director of the FTC's Bureau of Consumer Protection to share certain non-public information (consumer complaint information from the Identify Theft Data Clearinghouse and Consumer Information System databases) with consumer reporting agencies. See, Federal Register, August 6, 2003, Vol. 68, No. 151, at Page 46642.

8/6. The Executive Office of the President's (EOP) Office of Science and Technology Policy's (OSTP) National Science and Technology Council's (NSTC) Subcommittee on Research Business Models published a notice in the Federal Register stating that it "is undertaking a review of policies, procedures, and plans relating to the business relationship between federal agencies and research performers with the goal of improving the performance and management of federally sponsored basic and applied scientific and engineering research. As part of that effort, the Subcommittee will hold a series of regional workshops in the Fall of 2003 to solicit input and feedback from the research performer community. This notice is intended to collect data that will assist the Subcommittee in setting agendas for those regional workshops." The deadline to submit comments is September 22, 2003. See, Federal Register, August 6, 2003, Vol. 68, No. 151, at Pages 46631 - 46632.

8/6. The U.S. District Court (EDNY) approved two stipulated orders in cases brought by the Federal Trade Commission (FTC) against Rhino International, Inc. and Safety Cell, Inc. alleging the marketing on television and on the internet of bogus cell phone radiation protection patches. The orders require the two defendants to have adequate scientific evidence to substantiate claims about the performance, efficacy, or benefit of any good or service, and prohibits them prohibited from marketing or selling any product that claims to protect consumers from harmful radiation and electromagnetic energy, unless the claims can be substantiated by competent and reliable scientific evidence. The Rhino order also includes a fine of $342,665. This is FTC v. Rhino International, D.C. No. CV 03-3850 and FTC v. Safety Cell, D.C. No. CV 03-3851. See, FTC release.

Go to News from August 1-5, 2003.