Senate Commerce Committee Holds Hearing on Do Not Call Registry

9/30. The Senate Commerce Committee held a hearing regarding the telemarketing do not call registry, and recent court developments in cases pertaining to the registry. The Chairmen of the Federal Trade Commission (FTC) and Federal Communications Commission (FCC) testified that they believe the U.S. District Court (DColo) erred when it held that FTC's do not call registry violates the First Amendment free speech rights of telemarketers. The FCC Chairman stated that the FCC will continue to enforce the do not call rules.

On September 25, the District Court in Denver, Colorado issued its Memorandum Opinion and Order [34 pages in PDF]. This case is Mainstream Marketing Service, TMG Marketing Inc., and American Teleservices Association v. Federal Trade Commission, et al., D.C. No. 03-N-0184, U.S. District Court for the District of Colorado, Judge Edward Nottingham presiding.

See also, stories titled "Colorado District Court Holds That Do Not Call Registry Violates 1st Amendment" in TLJ Daily E-Mail Alert No. 747, September 26, 2003, "FTC Appeals District Court Ruling That Do No Call Registry Violates 1st Amendment" in TLJ Daily E-Mail Alert No. 748, September 29, 2003, and "Do Not Call Registry Developments" in TLJ Daily E-Mail Alert No. 749, September 30, 2003.

FTC Chairman Timothy Muris stated in his prepared testimony that "U.S. District Judge Nottingham in Denver ruled that the Do Not Call Registry offends the First Amendment because it makes a content-based distinction between its treatment of commercial telemarketing calls to sell goods or services and noncommercial calls soliciting charitable contributions. We believe that as a matter of law this decision is incorrect, and are therefore confident of ultimate success on appeal. Nevertheless, this legal dispute could take years to resolve. In the meantime, the status of the Registry is unsettled."

He said that "it is unclear the extent to which Judge Nottingham's decision permits the FCC to access the Registry for enforcement or companies under FCC jurisdiction to access the Registry for compliance with the FCC's rules."

He added that the Colorado ruling "threatens the ability of the states with do not call laws to enforce them".

He concluded that "We believe that the FTC is likely to succeed on the merits of its appeal because the district court's decision reached an unprecedented conclusion that telemarketers have a constitutional right to continue telemarketing calls to consumers who have indicated that they do not want these calls. This holding is at odds with the relevant Supreme Court cases. Specifically, the court erred in its application of Central Hudson Gas & Electric Corp. v. Public Service Commission of New York ..." (See, 447 U.S. 557 (1980).)

Federal Communications Commission (FCC) Chairman Michael Powell stated in his prepared testimony that the FCC "will enforce its National Do-Not-Call rules against telemarketers that have obtained the Do-Not-Call Registry from the Federal Trade Commission." No court has enjoined the FCC.

"I believe our rules will withstand Constitutional challenge. In the end, I am simply unwilling to accept the notion that the First Amendment unavoidably bars the American people from deciding who calls them in the privacy of their own homes. I assure you that the full resources of the FCC are committed to defending our rules and taking any steps necessary to effectively implement and enforce them, to the full extent permissible by law."

He elaborated that "More than ten years ago, Congress vested the Federal Communications Commission with broad authority to protect consumers from unwanted calls. In our June order, we expanded on that effort. Last week, when these rules were challenged in the 10th Circuit Court of Appeals, the Court specifically refused to block our rules. It held that ``on the record presented ... [the telemarketing industry] ha[d] failed to establish a likelihood of success on the merits." Citing the strong public interest in leaving these rules in place, the Court made clear that the rules should go forward. Most recently, the Supreme Court yesterday declined to disturb the Court's ruling." (Brackets in original.)

He added that "as a practical matter, challenges to the FTC's rules affect the enforcement of our rules because the statute instructed the two agencies to work in partnership with one another to achieve our common consumer protection goals. Over the past week, three district court decisions (the most recent issued last night) addressing the FTC's rules have introduced confusion with regard to the implementation and enforcement of the national Do-Not-Call Registry. The Colorado district court's order last night has raised questions about the FCC's ability to enforce the list. Most directly, to the extent the court's ruling prevents the FCC from accessing the FTC's database, our enforcement efforts may be hampered."

Gerald Cerasale, SVP of the Direct Marketers Association, stated in his prepared testimony that "We continue to believe that the FTC list is fatally flawed by important constitutional defects." He also offered several benefits of telemarketing. He asserted that "many American consumers respond favorably to telemarketing", that "telemarketing provides employment to many Americans", and that it "adds competitiveness to the U.S. economy. It provides information on new products and services and on prices".

Cerasale also raised several objections to the do not call registry. He stated that "it is imperative that the registration process ensures the accuracy of telephone numbers that are placed on the do-not-call registry. Internet registration is subject to abuse. It is our understanding and belief that there are not sufficient protections in place in connection with Internet registration to: (1) verify that the numbers were submitted by the persons to whom the numbers are assigned; (2) determine whether the individual submitting the number has permission to submit the numbers; or (3) determine that the numbers are not business numbers (which are not candidates for inclusion on the registry)." (Parentheses in original.) He also stated that there should be only one do not call registry, but there remain in effect state do not call registries."

District Court Rules on Internet Jurisdiction

9/30. The U.S. District Court (DMd) issued an opinion [12 pages in PDF] in Electronic Broking v. E-Business Solutions, a case regarding personal jurisdiction based on internet activity.

The complaint alleges federal trademark infringement in violation of the Lanham Act, 15 U.S.C. §1125(a), and unfair competition arising from the defendants' alleged use of the trademark "Electronic Broking Services, Limited" in connection with the sale of electronic products and services to the banking and financial services industry. The defendants also had a customer in the state of Maryland, where the complaint was filed.

The Court concluded that the "Defendants' contacts with Maryland do not rise to the level of ``minimum contacts´´ necessary to constitutionally subject them to either general or specific personal jurisdiction in this court. There is no evidence that they directed E-Business Solutions' semiinteractive website into Maryland with the explicit intent of targeting Maryland residents, nor do their Internet activities amount to the type of ``continuous and systematic´´ contacts required for general jurisdiction. Although the defendants have engaged in business with one Maryland corporation, which they contend was related to matters in Africa, Electronic Broking has failed to allege facts regarding the nature and extent of such business dealings sufficient to show a "substantial connection" between the defendants and Maryland. Furthermore, asserting jurisdiction over the defendants in this forum would violate traditional notions of fair play and substantial justice given the considerable burden on the defendants and the limited interests of the plaintiff and the forum in adjudicating the dispute in Maryland."

The District Court dismissed for lack of jurisdiction. This case is Electronic Broking Services, Limited v. E-Business Solutions & Services, et al., D.C. No. JFM-03-1350, Judge Frederick Motz presiding.

People and Appointments

9/30. The Senate confirmed Ronald White to be a Judge of the U.S. District Court (EDOkla) by a vote of 93-0. See, Roll Call No. 370.

9/30. The Senate confirmed Marcia Crone to be a Judge of the U.S. District Court (EDTex) by a vote of 91-0. See, Roll Call No. 369.

Trade News

9/30. Sen. Max Baucus (D-MT) gave a speech [5 pages in PDF] ... in which he addressed trade with the Middle East. He observed that "the true dawn of the information age occurred not in Silicon Valley, but in the Middle East, where mathematicians first conceived the idea of the number zero." He stated that "The President's initiative now seeks to engage the Middle East economically by negotiating a free trade area in the Middle East by 2013. This is an excellent idea. It would re-ignite economic growth and expand opportunity in both the United States and the Middle East." He also promoted S 1121, the "Middle East Trade and Engagement Act", which he introduced, along with Sen. John McCain (R-AZ). He said that "Our bill gives the President the power to allow countries in what we term the ``Greater Middle East´´ that meet certain conditions -- such as supporting the war on terrorism and reforming their economies -- to export products to the United States duty free."

9/30. Trade representatives of Western Hemisphere nations began a four day meeting in Port of Spain, Trinidad and Tobago. The Office of the U.S. Trade Representative (USTR) stated in a release [PDF] the the purpose of this meeting is "to lay the final preparatory groundwork" for the Free Trade Area of the Americas (FTAA) ministerial to be held in Miami, Florida in November.

9th Circuit Rules Law Firm May Require Employees to Sign Agreements to Arbitrate Employment Disputes

9/30. The U.S. Court of Appeals (9thCir) issued its en banc opinion in EEOC v. Luce Forward, holding that employers (in this case, a law firm) that require employees to sign arbitration agreements do not violate Title VII of the Civil Rights Act of 1964, as amended by the 1991 Act.

Luce Forward is a large California law firm that required employees, as a condition for employment, to sign an agreement to submit disputes arising out of their employment to binding arbitration. This is significant because the Civil Rights Act of 1964, as amended in 1991, provides for trial by jury of employment discrimination claims.

Luce Forward refused to hire as a legal secretary a person who refused to sign the agreement. He filed a complaint in state court. The Equal Employment Opportunity Commission (EEOC) also filed a complaint in U.S. District Court (CDCal) on his behalf alleging violation of Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990 (ADA), the Age Discrimination in Employment Act of 1967 (ADEA), and the Equal Pay Act of 1963 (EPA). The focus of this case is Title VII.

The District Court refused, on res judicata grounds, to award make whole relief and rejected the EEOC’s request for injunctive relief under the ADA, the ADEA, and the EPA. However, the District Court enjoined Luce Forward from requiring applicants to agree to arbitrate Title VII claims and from enforcing existing agreements to arbitrate those claims. See, 122 F. Supp. 2d 1080.

A three judge panel of the Court of Appeals reversed. It held that employers may require employees to sign agreements to arbitrate Title VII claims as a condition of their employment.

The District Court relied on the 9th Circuit's earlier decision in Duffield v. Robertson Stephens & Co., 144 F.3d 1182 (1998). The three judge panel held that the Supreme Court's decision in Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001), implicitly overruled Duffield.

The majority of the en banc panel wrote that while it disagreed with the three judge panel's "conclusion that Circuit City implicitly overruled Duffield, we need not explore that disagreement in detail. It suffices to note that the panel opinion has been withdrawn. Id. We now conclude that, although Circuit City did not overrule Duffield, Duffield was wrongly decided; we therefore overrule it ourselves.

And, since the en banc panel overruled Duffield, it reversed the judgment of the District Court insofar as it granted the EEOC’s request for injunctive relief. It added that "With regard to the EEOC's request for injunctive relief on its retaliation theory, we remand this issue to the district court to address in the first instance."

Judge Pregerson (joined by Schroeder and Reinhardt) wrote a partial dissent. He wrote that "Congress in enacting the Civil Rights Act of 1991 did not intend that employers could force their employees as a mandatory condition of employment to forego their right to bring future Title VII claims in a court of law." He added that, in overruling Duffield, "the majority opinion allows employers to force their employees to choose between their jobs and their right to bring future Title VII claims in court. That choice is no choice at all."

Judge Reinhardt (joined by Pregerson) wrote a separate dissent.

More News

9/30. President Bush signed HJRes 69, the Continuing Appropriations for Fiscal Year 2004. See, White House release.

9/30. The Federal Communications Commission (FCC) released a Consumer Advisory [2 pages in PDF] regarding the status of the telemarketing, the national telemarketing do not call registry, and filing of complaints.

9/30. The Federal Communications Commission (FCC) announced that it fined Globcom, Inc. $806,861 for failure to make universal service and telecommunications relay service payments. See, FCC release and Notice of Apparent Liability for Forfeiture and Order, FCC No. 03-231.

9/30. The Federal Election Commission (FEC) announced that it has assessed administrative fines against 48 party committees, candidate committees, and political action committees (PACs) for the late or non-filing of reports required by the Federal Election Commission Act (FECA). The FEC fined several technology related PACs, including Level 3 Communications Inc. Political Action Committee ($375), EDS Political Action Committee ($1,000), NCR Corporation Citizenship Fund ($1,000), T-Mobile Political Action Committee ($1,000), and VENTUREPAC ($6,000). Each of these fines was for the late or non-filing of the 12 Day Pre-General 2002 reports. See, FEC release.

9/30. Microsoft announced that it reached a settlement agreement resolving antitrust litigation pending in the U.S. District Court (DMd) involving direct purchasers of certain Windows software. See, Microsoft release.

Do Not Call Registry Developments

9/29. The U.S. District Court (DColo) issued its Order Denying Stay of Judgment [22 pages in PDF] in Mainstream Marketing v. FTC, one of the cases in which telemarketers seek to enjoin the Federal Trade Commission's (FTC) telemarketing do not call registry.

On September 25, the District Court issued its Memorandum Opinion and Order [34 pages in PDF] holding that the FTC's do not call registry violates the First Amendment free speech rights of telemarketers. On September 26, the FTC filed a Notice of Appeal [3 pages in PDF], Motion for an Emergency Stay Pending Appeal [3 pages in PDF], and a Memorandum of Points and Authorities in Support of It's Motion for an Emergency Stay Pending Appeal [9 pages in PDF].

Also on September 29, Federal Communications Commission (FCC) Chairman Michael Powell issued a statement [PDF] regarding the status of the FCC's do not call rules.

He wrote that "The FCC will enforce its Do-not-call rules against telemarketers that have obtained the Do-Not-Call list from the FTC, beginning Wednesday. The FCC rules complement and expand on those of the FTC. FCC rules have not been disturbed by recent court cases. Last week, the 10th Circuit Court of Appeals refused to block the rules pending review -- as the telemarketing industry had urged -- citing the strong public interest of leaving the rules in place. The Commission intends to continue to administer and enforce its rules to the fullest extent possible as the litigation proceeds."

And, on September 29, President Bush signed HR 3161, a bill authorizing the FTC to implement a national do not call registry. The House passed the bill on September 25 by a vote of 412-8. See, Roll Call No. 521. Later in the day, the Senate passed the bill by a vote of 95-0. See, Roll Call No. 365.

The Congress passed this bill in immediate response to the September 24 Order [19 page PDF scan] of the U.S. District Court (DOkla) in U.S. Security v. FTC, holding that the FTC's rule creating a do not call registry exceeds the statutory authority of the FTC.

See also, stories titled "Oklahoma Court Rules FTC Do Not Call Registry Invalid" in TLJ Daily E-Mail Alert No. 746, September 25, 2003, and "Congress Passes Bill to Authorize Do Not Call Registry" in TLJ Daily E-Mail Alert No. 747, September 26, 2003.

President Bush gave a speech at the signing ceremony. Sen. Ted Stevens (R-AK), a senior member of the Senate Commerce Committee, Rep. Billy Tauzin (R-LA), the Chairman of the House Commerce Committee, Rep. Fred Upton (R-MI), the Chairman of the Telecom and Internet Subcommittee, and Rep. Ed Markey (D-MA), the ranking Democrat on the Subcommittee, attended the event.

Bush stated that "The reason they're here is they acted to a response from the judiciary. They acted, as well, because the American people clearly like the idea of a Do Not Call Registry. After all, since the first sign-up day three months ago, Americans have entered over 50 million telephone numbers in the Do Not Call Registry."

He continued that "Last week, a federal judge objected to the Do Not Call Registry on the grounds that Congress had not authorized its creation. So the House and the Senate authorized its creation. You acted swiftly and I want to congratulate you very much, it's a really good action. The Senate voted 95-0, the House 412-8, this affirmed the decision by the FTC and it's affirmed the wishes of the American people."

Bush added that "The Do Not Call Registry is still being challenged in court. Yet, the conclusion of the American people and the legislative branch and the executive branch is beyond question. So today I'm pleased to sign this important piece of legislation into law."

Bush also stated that the FCC is "ably headed by Michael Powell" and the FTC is "ably headed by Tim Muris".

Rep. John Dingell (D-MI), the ranking Democrat on the House Commerce Committee stated in a release that "I am confident the courts will ultimately overturn these errant court decisions that run counter to the wishes of millions of Americans,” said ranking member Dingell. “In the interim, I encourage the Federal Communications Commission and the Federal Trade Commission to take whatever steps necessary under the law to protect the privacy of consumers who do not want unsolicited calls at home."

11th Circuit Rejects Georgia Power's Petitions for Review of Pole Attachments Orders

9/29. The U.S. Court of Appeals (11thCir) issued two companion opinions on two petitions for review (Nos. 02-10222 and 02-15608) filed by Georgia Power Company (GPC) regarding actions by the Federal Communications Commission (FCC) pertaining to pole attachments rental rates.

GPC filed its first petition (No. 02-1022) after the the FCC's Cable Service Bureau (CSB) had issued an order reducing GPC's rental rate, and after GPC had sought review by the full Commission, but before the Commission had acted. The Appeals Court dismissed this petition as premature. See, opinion [7 pages in PDF].

GPC filed its second petition (No. 02-15608) after the full Commission affirmed the CSB's order. The Appeals Court denied this petition. See, opinion [30 pages in PDF].

No. 02-15608. In this longer opinion the Appeals Court reviewed the history of the 1978 Pole Attachments Act, the pole access provisions of the 1996 Telecom Act, opinions of the 11th Circuit, and the FCC's implementing rules and decisions. (The statute is now codified at 47 U.S.C. § 224.)

In October 2000, GPC notified Teleport Communications Atlanta that it was imposing an annual pole attachment rate of $53.35. Teleport filed a complaint with the FCC arguing that the rate was in excess of the maximum rate permissible under the Pole Attachment Act. GPC argued that the FCC formula failed to provide just compensation because it relied on historical costs rather than fair market value. The CSB, which is now a part of the FCC's Media Bureau, struck GPC's rate. GPC filed an application for administrative review. However, before the FCC acted on this application, GPC filed its first petition for review with the 11th Circuit (No. 02-10222). After the full Commission affirmed the CSB order, GPC filed its second petition for review (No. 02-15608). Teleport intervened in both proceedings.

In this second petition (No. 02-15608), GPC challenged the FCC's order affirming a decision of the FCC's CSB which reduced GPC's $53.35 annual pole rental rate to between $6.56 and $8.24. GPC argued that the FCC acted arbitrarily and capriciously in numerous ways when it ruled on the pole attachment rate dispute between GPC and intervenor Teleport. The Appeals Court held that the FCC did not act arbitrarily or capriciously, and therefore denied the petition for review.

This proceeding is Georgia Power Company v. Federal Communications Commission and U.S.A, respondents, and Teleport Communications Atlanta, Inc., intervenor, No. 02-15608, a petition for review of an order of the FCC in FCC Docket No. PA 00-005.

No. 02-10222. In this brief opinion, the Appeals Court dismissed GPC's first petition for review as premature.

The Court wrote that there are just two issues in this proceeding: "First, should the intervenors' brief in support of Georgia Power be stricken because it injects new issues into this appeal? Second, should the Federal Communications Commission's (FCC) motion to dismiss be granted because Georgia Power acted prematurely in filing the first petition?"

First, the Appeals Court ruled that the intervenors' brief must be striken. It wrote that "In its first petition, Georgia Power complained that the proper method for determining just compensation must use the replacement costs, not the historical costs. It argued that, unless replacement costs are used, the FCC formula denies Georgia Power just compensation for the taking mandated by the Telecommunications Act." In contrast, "In their briefs on the first petition, the utility intervenors raise a different argument. They claim that only the courts can determine just compensation for a taking and that FCC can play no role in awarding just compensation to Georgia Power."

The Appeals Court held both that "an intervenor is precluded from raising issues not raised by the principal parties", and that "this argument has been raised before, and we have rejected it". It therefore granted the FCC's motion to dismiss the intervenors' brief.

Second, the Appeals Court ruled that Georgia Power's first petition is premature, and must be dismissed. The Court held that since Georgia Power filed the present petition (02-10222) after the CSB had issued its order, but before the Commission had an opportunity to rule on the application for review, and only final agency actions are subject to judicial review, there was no final agency action, and the petition for review is premature.

The Court elaborated that "Georgia Power can get judicial review of the Cable Services Bureau’s order only if both of the following two conditions are satisfied: (1) it files an application for review by the full Commission, and (2) the relevant order becomes final. Unfortunately for Georgia Power, satisfying the first condition makes a ruling from the full FCC the only means of satisfying the second condition. The Cable Services Bureau’s order would become final if Georgia Power did not file an application for review, but once it files an application for review, the subordinate unit’s order is non-final, and hence non-reviewable ..."

This proceeding is Georgia Power Company v. Federal Communications Commission and U.S.A, respondents, and Teleport Communications Atlanta, Inc., Duke Energy Corp., American Electric Power Service Corp., intervenors, No. 02-10222, a petition for review of an order of the FCC's CSB in FCC Docket No. PA 00-005.

The U.S. Court of Appeals for the Eleventh Circuit does not have exclusive jurisdiction over petitions for review in pole attachments cases. It just appears that it does. The three judge panel for both of these opinion was comprised of Judges Black, Marcus and Middlebrooks. Judge Black wrote both opinion.

People and Appointments

9/29. The Senate confirmed Carlos Bea to be a Judge of the U.S. Court of Appeals (9thCir) by a vote of 84-0. See, Roll Call No. 368.

9/29. President Bush nominated William Haynes (at right) to be a Judge of the U.S. Court of Appeals (4thCir). See, White House release. Haynes is General Counsel at the Department of Defense. He has previously worked as a partner at the law firm of Jenner & Block and as a VP and Associate General Counsel at General Dynamics Corporation.

9/29. President Bush nominated Raymond Gruender to be Judge of the U.S. Court of Appeals (8thCir). See, White House release. Gruender is the U.S. Attorney for the Eastern District of Missouri.

9/29. Meribeth McCarrick was named Associate Director of the Federal Communications Commission's (FCC) Office of Media Relations. She has worked for the FCC since 1994. See, FCC release [PDF].

9/29. Dan Iannicola was named Deputy Assistant Secretary for Financial Education at the Treasury Department. See, release.

9/29. Barry Beringer, Chief Counsel to the House Committee on Science, died. See, release.

More News

9/29. The U.S. Patent and Trademark Office's (USPTO) Trademark Trial and Appeal Board (TTAB) announced that it unveiled TTABVue. The USPTO describes this as "a system that allows users to view images of documents relating to trademark disputes on the Internet. TTABVue includes images of most documents filed since January 2003. Some earlier records covering the period June 2001 to January 2003 also are available." See, USPTO release.

9/29. Carly Fiorina, CEO of Hewlett Packard, gave a lofty speech in Detroit, Michigan in which she addressed the history of, and economic prospects for, "the Arab world" and "the Islamic world", and how information technology can create opportunities. She said that "for all that technology means in countries like the U.S., its potential is even greater for regions like the Middle East. As we've seen, our newest technology applied to solutions like telemedicine, teleagriculture, and distance learning has a unique ability to help countries leapfrog years of development, to close the gap between technology-empowered communities and technology-excluded communities." She concluded that "We really do believe that if we focus on the possibilities and not just the problems; if we focus on the economics, and not just the politics of the Arab world -- within a generation, we really will see education for everyone, with schools that are totally networked, and students and parents who interact over the Internet."

Federal Circuit Rules in Festo on Remand

9/26. The U.S. Court of Appeals (FedCir) issued its en banc opinion [MS Word] on remand in Festo v. Shoketsu Kinzoku Kogyo Kabushiki, a patent case regarding the doctrine of equivalents and the rule of prosecution history estoppel.

On May 28, 2002, the Supreme Court issued its opinion [21 pages in PDF] reversing the Court of Appeals and remanding. The Supreme Court affirmed the doctrine of equivalents, articulated its purpose, held that the narrowing of a patent claim may give rise to prosecution history estoppel (but that it does not absolutely bar application of the doctrine of equivalents), and listed circumstances under which it might or might not operate as a bar. See, story titled "Supreme Court Reverses in Festo Case" in TLJ Daily E-Mail Alert No.439, May 29, 2002.

The Appeals Court wrote in this opinion on remand that "The sole issue specifically before us is whether Festo can rebut the presumption that the filing of narrowing amendments for the two patents in suit surrendered all subject matter between the original claim limitations and the amended claim limitations."

It concluded that "Festo cannot overcome that presumption by demonstrating that the rationale underlying the narrowing amendments bore no more than a tangential relation to the accused equivalents or by demonstrating that there was ``some other reason´´ such that the patentee could not reasonably have been expected to have described the accused equivalents. However, we remand to the district court to determine whether Festo can rebut the presumption of surrender by establishing that the equivalents in question would have been unforeseeable to one of ordinary skill in the art at the time of the amendments."

Judge Pauline Newman dissented at length. She wrote that this opinion "places new and costly burdens on inventors, and reduces the incentive value of patents. By adopting a generous interpretation of the scope of surrender, and stinginess toward its rebuttal, the ensuing framework is one that few patentees can survive."

CCIA Files Amicus Curiae Brief in MGM v. Grokster

9/26. The Computer & Communications Industry Association (CCIA) filed an amicus curiae brief with the U.S. Court of Appeals (9thCir) in MGM v. Grokster.

On April 25, 2003, the U.S. District Court (CDCal) issued its opinion holding that Grokster's and Streamcast's peer to peer file copying networks do not contributorily or vacariously infringe the copyrights of the holders of music and movie copyrights. See, story titled "District Court Holds No Contributory or Vicarious Infringement by Grokster or Streamcast P2P Networks" in TLJ Daily E-Mail Alert No. 650, April 28, 2003. See also, story titled "Music Publishers File Appeal Brief in P2P Infringement Case", also published in TLJ Daily E-Mail Alert No. 724, August 22, 2003.

The CCIA argues that "This case is about more than the legality of peer-to-peer software. It is about the future of the information technology (``IT´´) industry, the Internet, and the fair use of digital works."

"The legal foundation upon which the IT industry stands is the Supreme Court’s decision in Sony Corp. of America v. Universal City Studios ... In Betamax, the Supreme Court proclaimed that the manufacturer of a product could not be held secondarily liable for infringing uses of the product so long as the product was capable of substantial noninfringing uses. That clear standard gave venture capitalists, engineers, and manufacturers the confidence and certainty that they could invest their resources in developing a wide range of consumer IT products without facing copyright liability. These products include personal computers, laptops, scanners, printers, and the software that enables them to operate."

Finally, the CCIA states that "Appellants claim that the District Court's decision leaves them powerless to combat infringement over P2P networks. Two recent developments prove the opposite." The CCIA states that the Recording Industry Association of America (RIAA) has successfully reduced infringement by bringing lawsuits against individual infringers. It also states that the "legal downloads of sound recordings are finally available in a low cost, user-friendly manner."

FTC Appeals District Court Ruling That Do No Call Registry Violates 1st Amendment

9/26. The Federal Trade Commission (FTC) filed a Notice of Appeal [3 pages in PDF] with the U.S. District Court (DColo) in Mainstream Marketing v. FTC. On September 25, the District Court issued its Memorandum Opinion and Order [34 pages in PDF] holding that the FTC's do not call registry violates the First Amendment free speech rights of telemarketers. The FTC also filed a Motion for an Emergency Stay Pending Appeal [3 pages in PDF] and a Memorandum of Points and Authorities in Support of It's Motion for an Emergency Stay Pending Appeal [9 pages in PDF]. See, full story.

Other Do Not Call Registry Related Proceedings

9/26. In addition to Mainstream Marketing Services v. FCC (D.C. Colorado) and CompTel v. FCC (U.S.C.A., D.C.), there are several other proceeding related to the do not call registry, telemarketing practices, and consumer complaints about telemarketers.

MMS v. FCC (10thCir). On July 25, 2003, Mainstream Marketing Services (MMS) filed a petition for review in the U.S. Court of Appeals (10thCir).

On September 26, the Tenth Circuit denied MMS's request for a stay of the FCC's do not call order, holding that it had failed to show a substantial likelihood of success on the merits.

This is Mainstream Marketing Services, Inc., TMG Marketing, and American Teleservices Association, Appeals Court No. 03-9571. These telemarketers are represented by Robert Corn-Revere.

U.S. Security v. FTC (U.S.D.C., W.D. Okla). U.S. Security, and other telemarketing related entities, filed a civil complaint in the U.S. District Court (WDOkla) against the FTC. On September 24, the District Court issued its Order [19 page PDF scan] holding that the FTC's rule creating a do not call registry exceeds the statutory authority of the FTC.

This was a matter of statutory interpretation, so the Congress was able to render the District Court's order moot by amending the statute to make clear that the FTC has authority to implement a do not call registry. See, HR 3161, which was passed by both the House and Senate on September 25.

See also, stories titled "Oklahoma Court Rules FTC Do Not Call Registry Invalid" in TLJ Daily E-Mail Alert No. 746, September 25, 2003, and "Congress Passes Bill to Authorize Do Not Call Registry" in TLJ Daily E-Mail Alert No. 747, September 26, 2003.

This case is U.S. Security, et al. v. Federal Trade Commission, D.C. No. CIV-03-122-W, U.S. District Court for the Western District of Oklahoma, Judge Lee West presiding.

ATA v. FCC (U.S.D.C., D.C.). The American Teleservices Association (ATA) has also filed a complaint in the U.S. District Court (DC) against the Federal Communications Commission (FCC) alleging violation of the Freedom of Information Act (FOIA), codified at 5 U.S.C. § 552, in connection with the ATA's efforts to obtain from the FCC personally identifying information about the over 10,000 consumers who have complained to the FCC about telemarketing practices.

See, story titled "Telemarketers Sue FCC To Get Names, Addresses, and Phone Numbers of Consumers Who Complained to FCC" in TLJ Daily E-Mail Alert No. 741, September 17, 2003.

This case is American Teleservices Association v. FCC, D.C. No. 03-CV-1848, Judge Richard Leon presiding. The complaint was signed by Robert Corn-Revere. It was filed on September 4, 2003.

OMB Issues Guidance to Executive Branch Entities Regarding Privacy and E-Government

9/26. Joshua Bolton, Director of the Office of Management and Budget (OMB), wrote a memorandum to the heads of executive departments and agencies titled "OMB Guidance for Implementing the Privacy Provisions of the
E-Government Act of 2002". See, also OMB release [1 page in PDF] describing the memorandum.

The Act requires departments and agencies to conduct privacy impact assessments (PIAs) "before -- (i) developing or procuring information technology that collects, maintains, or disseminates information that is in an identifiable form; or (ii) initiating a new collection of information that -- (I) will be collected, maintained, or disseminated using information technology; and (II) includes any information in an identifiable form permitting the physical or online contacting of a specific individual, if identical questions have been posed to, or identical reporting requirements imposed on, 10 or more persons, other than agencies, instrumentalities, or employees of the Federal Government."

This memorandum provides detailed guidance regarding PIAs for electronic information systems and collections, including when to conduct PIAs, when PIAs are not required, how to conduct PIAs, and what to address in PIAs.

The memorandum also provides detailed guidance regarding privacy policies on agency websites used by the public. The memorandum sets a deadline of December 15, 2003 for departments and agencies to adopt website privacy policies.

HR 2548 in the 107th Congress, titled "The E-Government Act of 2002", was signed on December 17, 2002, and became effective on April 17, 2003. It is Public Law 107-347. It is codified at 44 U.S.C. Ch. 36. Section 208 of the Act, which is attached as Exhibit B to the OMB memorandum, contains privacy provisions, and requires the Director of the OMB to issue implementing guidelines.

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9/26. Federal Reserve Board Chairman Alan Greenspan gave a speech to the 33rd Annual Legislative Conference of the Congressional Black Caucus in Washington DC. He stated that today, "the advance of telecommunications technologies and the development of other new technological tools have broadened the availability of credit and other banking services. More generally, these advances mean consumers must be familiar with the role that computers play in the conduct of every traditional financial transaction, from withdrawing funds to borrowing." He added that "household and business borrowers have benefited from the technological developments that have enhanced financial services, and their remarkable growth. Computer and telecommunications technologies have lowered the cost and broadened the scope of such services."

9/26. The U.S. Patent and Trademark Office (USPTO) published a notice in the Federal Register announcing and summarizing new regulations implementing the Madrid Protocol Implementation Act of 2002, and amendments to existing regulations both to implement the Act and revise the procedures for processing trademark applications and conducting proceedings before the Trademark Trial and Appeal Board. The new rules take effect on November 2, 2003. See, Federal Register: September 26, 2003, Vol. 68, No. 187, at Pages 55747 - 55781. The Congress enacted this Act as a part of HR 2215 (107th), a bill to authorize appropriations for the Department of Justice for FY 2002, and other purposes.

9/26. The Federal Communications Commission's (FCC) Wireline Competition Bureau announced that it seeks nominations for several Board member positions on the Board of Directors of its Universal Service Administrative Company (USAC). Nominations are due by October 27, 2003. See, FCC notice [PDF].

9/26. Sen. Max Baucus (D-MT), the ranking Democrat on the Senate Finance Committee, and nine other Senators, wrote a letter [2 pages in PDF] to President Bush arguing that "Taiwan should be under consideration for a free trade agreement with the United States." And more generally, the letter inquires "What are the criteria for determining whether to negotiate a free trade agreement?"

Go to News from September 21-25, 2003.