Senate Judiciary Committee May Consider Inducement Bill

9/20. The Senate Judiciary Committee (SJC) announced that the tentative agenda for its Tuesday, September 21 meeting includes mark up of S 2560, the "Inducing Infringement of Copyrights Act of 2004".

Sen. Orrin Hatch (R-UT), Sen. Patrick Leahy (D-VT), and others introduced the original version of S 2560 in the Senate on June 22, 2004. See, story titled "Senators Introduce Bill to Amend Copyright Act to Ban Inducement of Infringement", in TLJ Daily E-Mail Alert No. 925, June 24, 2004.

On July 22, the SJC held a hearing on the bill. Sen. Hatch and Sen. Leahy are the Chairman and ranking Democrat. See, story titled "Senate Judiciary Committee Holds Hearing on Inducement Bill" in TLJ Daily E-Mail Alert No. 963, August 20, 2004.

On August 24, a group of opponents of the bill sent a proposed alternative version of the bill to the SJC. See, stories titled "Opponents of the Inducing Infringement of Copyrights Act Submit Alternative Proposal" and "Comparison of Hatch Leahy Inducement Bill and Opponents' Proposal", in TLJ Daily E-Mail Alert No. 966, August 25, 2004.

The staff of the Copyright Office (CO) has been meeting with representatives of interested groups and companies regarding revisions to the bill. On September 2 the CO released a discussion draft version of S 2560. See, story titled "Copyright Office Releases Draft Version of Inducement Bill" in TLJ Daily E-Mail Alert No. 970, September 6, 2004.

After further meetings and public debate, the CO released another discussion draft version of the bill on September 9. This version provides as follows:

Section 501 of title 17, United States Code, is amended by adding at the end the following:

(g)(1) Inducement of Infringement -- Whoever manufactures, offers to the public, provides, or otherwise traffics in any product or service, such as a computer program, technology, device or component, that is a cause of individuals engaging in infringing public dissemination of copyrighted works shall be liable as an infringer where such activity: (A) relies on infringing public dissemination for its commercial viability; (B) derives a predominant portion of its revenues from infringing public dissemination; or (C) principally relies on infringing public dissemination to attract individuals to the product or service.

(2) For the purposes of this subsection, ``public dissemination´´ means digital transmission to the public of copies or phonorecords or any other exercise of any of the rights set forth in sections 106(3), 106(4), 106(5) or 106(6).

(3) Limitations on Remedies -- (A) No award of statutory damages under Section 504(c) shall be made for a violation of this subsection unless the copyright owner sustains the burden of proving, and the court finds, that such violation was committed willfully. (B) In granting injunctive relief under Section 502 for a violation of this subsection, the court shall, to the extent practicable, limit the scope of the injunctive relief so as not to prevent or restrain noninfringing uses of the product or service.

(4) Nothing in this subsection shall enlarge or diminish the doctrines of vicarious liability and contributory infringement, including any defenses thereto or any limitations on rights or remedies for infringement. Nothing in this subsection shall enlarge or diminish liability for infringement of the exclusive rights in sections 106(1) or 106(2)."

The Copyright Office released this version, along with a lengthy Explanatory Memorandum.

On September 17 a collection of interest groups and corporations wrote a letter to Sen. Hatch and Sen. Leahy expressing their opposition to the September 9 draft. They asserted that "anyone involved in the development or operation of electronic, or even physical, communication, distribution, or dissemination technologies could be strictly liable when it unknowingly derives revenue that may be small in relation to its own provision of goods and services. Perhaps most troubling, entities that participate in the Internet and other electronic space would have no way of structuring their activities to anticipate and avoid -- or even minimize -- these risks."

While the Senate Judiciary Committee has placed S 2560 on the agenda for its September 21 meeting, there are also 10 other bills, and 12 nominees, on the same agenda. The Committee typically places more items on its agenda than it actually addresses. Items are typically held over until the next meeting.

Senate Commerce Committee to Mark Up Tech and Communications Bills

9/20. The Senate Commerce Committee has scheduled a meeting to mark up numerous bills, including several that are technology or communications related. On Wednesday, September 22, the Committee will mark up bills pertaining to wireless number privacy, universal service, spyware, and public safety spectrum.

Wireless Privacy. The Committee is scheduled to mark up S 1963, the "Wireless 411 Privacy Act".

Sen. Arlen Specter (R-PA) and Sen. Barbara Boxer (D-CA) introduced this bill on November 25, 2003. The Committee has not yet held a hearing, but has scheduled one for Tuesday, September 21, 2004 at 2:30 PM, the afternoon before the markup. See, story titled "House and Senate Committees to Hold Hearings on Wireless Number Privacy" in TLJ Daily E-Mail Alert No. 978, September 16, 2004.

This bill provides that "A provider of commercial mobile services ... may not include the wireless telephone number information of any current subscriber in any wireless directory assistance service database unless" it "obtains express prior authorization" from the subscriber. Also, for new subscribers, the provider would be required to give notice of the right not to be listed in a directory assistance service database, and to provide convenient mechanisms for the subscriber to decline to be listed. It also requires that service providers cannot charge for not listing phone numbers.

Companion legislation in the House has not yet been reported by the House Commerce Committee, or its Subcommittee on Telecommunications and the Internet.

Spyware. The Committee is also scheduled to mark up S 2145, "Software Principles Yielding Better Levels of Consumer Knowledge Act", or "SPY BLOCK Act".

Sen. Ron Wyden (D-OR) and Sen. Barbara Boxer (D-CA) introduced this bill on March 27, 2004. The Committee held a hearing on this bill on March 23, 2004. See, story titled "Senate Communications Subcommittee Holds Hearing on Spyware Bill" in TLJ Daily E-Mail Alert No. 862, March 24, 2004.

First, this bill, as introduced, provides that "It is unlawful for any person who is not the user of a protected computer to install computer software on that computer, or to authorize, permit, or cause the installation of computer software on that computer, unless ... the user of the computer has received notice ... the user of the computer has granted consent ... and ... the computer software's uninstall procedures satisfy the requirements" of the bill. The bill also elaborates on the requirements for notice, consent and uninstall procedures.

Second, this provides that "It is unlawful for any person who is not the user of a protected computer to install computer software on that computer, or to authorize, permit, or cause the installation of computer software on that computer, if the design or operation of the computer software is intended, or may reasonably be expected, to confuse or mislead the user of the computer concerning the identity of the person or service responsible for the functions performed or content displayed by such computer software." The bill refers to this as the "red herring" prohibition.

Third, this bill provides that "It is unlawful for any person who is not the user of a protected computer to use an information collection, advertising, distributed computing, or settings modification feature of computer software installed on that computer, if ... the computer software was installed in violation of section 2 ... the use in question falls outside the scope of what was described to the user of the computer in the notice provided ... or ... in the case of an information collection feature, the person using the feature fails to establish and maintain reasonable procedures to protect the security and integrity of personal information so collected."

The bill contains several exceptions pertaining to pre-installed software, software resident in temporary memory, and other software. The bill also contains a subsection providing immunity from liability for passive transmission, web hosting, and hyperlinking.

Finally, the bill addresses enforcement and remedies. There is no private right of action under this bill. Enforcement would be left to the Federal Trade Commission (FTC), other federal agencies, and the states.

There are also spyware related bills pending in the House.

The House Commerce Committee approved HR 2929, the "Safeguard Against Privacy Invasions Act" or "SPY Act", sponsored by Rep. Mary Bono (R-CA), on June 24, 2004. See, story titled "House Commerce Committee Approves Spyware Bill" in TLJ Daily E-Mail Alert No. 926, June 25, 2004.

On September 8, 2004, the House Judiciary Committee amended and approved HR 4661, the "Internet Spyware (I-SPY) Prevention Act of 2004". See, bill as introduced, and as bill as amended. See also, story titled "House Judiciary Committee Approves Spyware Bill" in TLJ Daily E-Mail Alert No. 973, September 9, 2004; and story titled "Judiciary Committee Members Introduce Spyware Bill" in TLJ Daily E-Mail Alert No. 928, June 29, 2004.

The two House bills, and the Senate bill as introduced, are different bills.

Rural Universal Service. The Committee is also scheduled to mark up S 1380, the "Rural Universal Service Equity Act of 2003".

Sen. Gordon Smith (R-OR) and others introduced this bill on July 9, 2003. See, story titled "Sen. Smith Introduces Universal Service Reform Bill" in TLJ Daily E-Mail Alert No. 697, July 14, 2003.

The bill requires the Federal Communications Commission (FCC) to amend its regulations codified at 47 CFR 54.309 and 54.311. See, Part 54 of the FCC rules.

Specifically, the bill provides that "In calculating Federal universal service support for eligible telecommunications carriers that serve rural, insular, and high cost areas, the Commission shall ... revise the Commission's support mechanism for high cost areas to provide support to each wire center in which the incumbent local exchange carrier's average cost per line for such wire center exceeds the national average cost per line by such amount as the Commission determines appropriate for the purpose of ensuring the equitable distribution of universal service support throughout the United States."

Other Items on the Agenda. The Committee's agenda also includes mark up of S ___, a public safety spectrum bill.

The agenda also includes consideration of the nominations of Deborah Majoras and Jonathan Liebowitz to be Commissioners of the Federal Trade Commission (FTC). They both currently hold recess appointments. Sen. Wyden and Sen. Boxer have opposed the nomination of Majoras.

See, story titled "Bush Gives Majoras and Liebowitz Recess Appointments to the FTC" in TLJ Daily E-Mail Alert No. 950, August 2, 2004; and story titled "Senate Commerce Committee Holds Hearing on FTC Nominees" in TLJ Daily E-Mail Alert No. 910, June 3, 2004.

More News

9/20. The Department of Homeland Security (DHS) announced that it awarded $9 Million in grants for information technology demonstration projects as a part of its Information Technology and Evaluation Program (ITEP). See, DHS release.

9/20. The Department of Homeland Security (DHS) announced that it named the prime contractor for its Electronically Managing Enterprise Resources for Government Effectiveness and Efficiency Program (also known as eMerge²). The prime contractor is BearingPoint, Inc. See, DHS release.

9/20. The Department of Commerce's (DOC) Bureau of Industry and Security (BIS/BXA) released a statement regarding developments in the U.S's and India's Next Steps in Strategic Partnership (NSSP) initiative, which addresses, among other topics, high tech trade.

9/20. The Securities and Exchange Commission (SEC) filed a civil complaint [22 pages in PDF] in U.S. District Court (EDNY) against iShopNoMarkup.com, Inc., and three of its directors and officers, alleging violation of federal securities laws in connection with iShop's purported development of an online shopping mall. The complaint alleges that "From the fall of 1999 to the summer of 2000, iShop, a start-up Internet company, defrauded over 350 investors by misrepresenting material information about the company’s operations and capital raising plans to individuals who invested approximately $2.3 million in iShop stock." It further alleges that "IShop claimed it was developing a shopping mall on the Internet to sell products directly from manufacturers to consumers at no markup. To raise capital, iShop conducted a series of purported private placement offerings and distributed confidential offering memoranda ("COMs") to investors. The COMs misrepresented, and failed to disclose, material information." The individual defendants are Anthony M. Knight, Moussa Yeroushalmi, and Scott W. Brockop. The four count complaint alleges violation of §§ 5(a), 5(c), and 17(a) of the Securities Act of 1933, § 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. See also, SEC release. This case is SEC v. iShopNoMarkup.com, Inc., et al., U.S. District Court for the Eastern District of New York, D.C. No. CV 04 4057 (DRH).

9/20. The General Accounting Office (GAO) released a report [58 pages in PDF] titled "Information Technology: FAA Has Many Investment Management Capabilities in Place, but More Oversight of Operational Systems Is Needed". The report finds that "Over the past 2 decades, individual FAA modernization projects have experienced cost overruns, schedule delays, and performance shortfalls of large proportions", and that "weaknesses remain" in it management of investment in information technology resources.

9/20. The American Conservative Union (ACU) announced its opposition to S 2560, "Inducing Infringement of Copyrights Act of 2004". See, ACU release.

People and Appointments

9/20. Elizabeth Valinoti was named Legal Advisor to the Chief of the Federal Communications Commission's (FCC) Enforcement Bureau. The FCC stated in a release that she will be responsible for wireless, international, and homeland security issues. She has been handling broadcast indecency matters. Before joining the FCC, she worked in the Washington DC office of the law firm of Mintz Levin. She has also worked for the National Exchange Carrier Association (NECA).

More News

9/19. The Electronic Privacy Information Center (EPIC) published in its web site copies of three redacted documents that is received from the Department of Homeland Security's (DHS) Transportation Security Administration (TSA) regarding the Computer Assisted Passenger Prescreening System (CAPPS II). See, April 17, 2003 memorandum [5 pages in PDF], July 29, 2003 memorandum [6 pages in PDF], and July 30, 2003 memorandum [5 pages in PDF], all of which are titled titled "Privacy Impact Statement (Preliminary)". The EPIC states that these documents "reflect a dramatic expansion over just three and a half months in the ways passenger information collected for the program would have been shared". The TSA no longer uses the term CAPPS II.

More News

9/17. The EU and the US issued a joint statement regarding a September 17, 2004 meeting in Brussels, Belgium of the annual Information Society Dialogue.

FCC News

9/16. The Federal Communications Commission (FCC) released its Second Further Notice of Proposed Rulemaking [20 pages in PDF] regarding reducing the time interval for intermodal number porting (porting numbers between wireline and wireless carriers). The FCC adopted, but did not release, this item at its September 9, 2004 meeting. Comments will be due 30 after publication in the Federal Register, which has not yet occurred. Reply comments will be due within 60 days. This item is FCC 04-217 in CC Docket No. 95-116.

9/16. The Federal Communications Commission (FCC) published a notice in the Federal Register that summarizes and sets the effective date (October 18, 2004) for its rules implementing Section 14 of the CAN SPAM Act. The Congress passed S 877, the "Controlling the Assault of Non-Solicited Pormography and Marketing Act of 2003", also known as the "CAN-SPAM Act of 2003", late last year. On December 16, 2003, President Bush signed the bill. It became Public Law No. 108-187. Most of the rules implementing this statute are a matter of Federal Trade Commission (FTC) jurisdiction. However, Section 14 of the Act directs the FCC to write rules "to protect consumers from unwanted mobile service commercial messages". These rules include a prohibition on sending commercial messages to any address referencing an internet domain name associated with wireless subscriber messaging services. See, Federal Register, September 16, 2004, Vol. 69, No. 179, at Pages 55765 - 55780.

9/16. The Federal Communications Commission (FCC) filed its Opposition to Petition for Writ of Mandamus [PDF] with the U.S. Court of Appeals (DCCir) in USTA v. FCC. This case is U.S. Telecom Association v. FCC and USA, U.S. Court of Appeals for the District of Columbia, App Ct. No. 00-1012, a petition for review of a final order of the FCC.

Go to News from September 11-15, 2004.