Senate Approves Copyright Bill

11/20. The Senate amended and approved by unanimous consent S 3021, the "Family Entertainment and Copyright Act of 2004" on Saturday, November 20, 2004. The House has yet to approve this large composite bill.

This bill was just introduced on November 20 by Sen. Orrin Hatch (R-UT) and Sen. Patrick Leahy (D-VT). However, it is a composite bill made up mostly of language from bills that have already been the subject of committee hearings, markups, House approval, and/or Senate approval. Also, a pre-introduction draft of this bill was the subject of the story titled "Senate May Consider Intellectual Property Bill" in TLJ Daily E-Mail Alert No. 1,022, November 19, 2004. See, full story.

Congress Approves Omnibus Appropriations Bill

11/20. The House and Senate both approved on November 20, 2004 an huge omnibus appropriations bill that provides appropriations for fiscal year 2005 for most of the technology related executive branch entities. Also, while it is an appropriations bill, it also includes many substantive law provisions.

This bill contains FY 2005 appropriations for the Federal Communications Commission (FCC), Federal Trade Commission (FTC), and Securities and Exchange Commission (SEC). It also includes appropriations for the Department of Commerce (DOC), which includes the U.S. Patent and Trademark Office (USPTO), National Institute of Science and Technology (NIST), National Telecommunications and Information Administration (NTIA), and the Bureau of Industry and Standards (BIS). It also includes appropriations for the Department of Justice (DOJ), which includes the Antitrust Division and the Criminal Division (which handles matters related to intellectual property crimes, computer hacking, and CALEA matters.

As of publication of this issue, the conference report was not yet published in the Congress's Thomas web site. However, it is in the House Rules Committee web site. See, web page with hyperlinks to the different divisions of the bill. See especially, Division B [PDF scan], titled "Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 2005". This copy is a PDF scan of 216 pages, and over 20 MB. It is a a long download. This Division contains most of the technology related appropriations.

The House approved the conference report on HR 4818, this omnibus appropriations bill, on Saturday afternoon, November 20, by a vote of 344-51. See, Roll Call No. 542. This vote was non-partisan. 27 Republicans voted against the bill, and 24 Democrats voted against it.

The Senate approved the conference report on Saturday night, November 20, by a vote of 65-30. See, Roll Call No. 215. Voting correlated with party affiliation. 6 of 51 Republicans voted against the bill, while 23 of 48 Democrats voted for the bill.

See, House Appropriations Committee's (HAC) summary of the bill, titled "Highlights of the Final FY05 Spending Bills", and Senate Appropriations Committee's (SAC) summary of Division B of the bill.

See, full story.

Appropriations Bill Provides $1.54 Billion for USPTO, Temporary Fee Increases, But No End to Diversion

11/20. The House and Senate both approved the conference report on HR 4818, the huge omnibus appropriations bill that includes appropriations for many departments and agencies, including the U.S. Patent and Trademark Office (USPTO).

The bill provides appropriations totaling $1,540,000,000 for the USPTO for FY 2005. The Congress has not approved HR 1561, the USPTO fee bill. However, this omnibus appropriations bill contains the fee increases; but, the increases are only applicable for FY 2005 and 2006. The appropriations bill also contains the fee bill's language regarding outsourcing patent searches to U.S. companies. However, the fee bill's language regarding ending fee diversion is not in the appropriations bill.

Division B [huge PDF scan] of HR 4818 is titled "Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 2005". It contains the USPTO provisions.

The USPTO appropriations language includes much smoke and mirrors, metaphorically.

It provides that "For necessary expenses of the United States Patent and Trademark Office provided for by law, including defense of suits instituted against the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, $1,336,000,000, to remain available until expended, which shall be derived from offsetting collections assessed and collected pursuant to 15 U.S.C. 1113 and 35 U.S.C. 41 and 376, and shall be retained and used for necessary expenses. Provided, That the sum herein appropriated from the general fund shall be reduced as such offsetting collections are received during fiscal year 2005, so as to result in a fiscal year 2005 appropriation from the general fund estimated at $0: Provided further, That during fiscal year 2005, should the total amount of offsetting fee collections be less than $1,356,000,000, this amount shall be reduced accordingly: Provided further, That not less that 526 full-time equivalents, 530 positions and $72,899,000 shall be for the examination of trademark applications; and not less than 5,057 full-time equivalents, 5,139 positions and $759,021,000 shall be for the examination and searching of patent applications: Provided further, That not more than 244 full-time equivalents, 251 positions and $31,906,000 shall be for the Office of the General Counsel: Provided further, That of amounts made available under this heading, $20,000,000 shall only be available for initiatives to protect United States intellectual property overseas:

It also states that, "Provided further, That notwithstanding section 1353 of title 31, United States Code, no employee of the United States Patent and Trademark Office may accept payment of reimbursement from a non-Federal entity for travel, subsistence, or related expenses for the purpose of enabling an employee to attend and participate in a convention, conference, or meeting when the entity offering payment or reimbursement is a person or corporation subject to regulation by the Office, or represents a person or corporation subject to regulation by the Office, unless the person or corporation is an organization exempt from taxation pursuant to section 501(c)(3) of the Internal Revenue Code of 1986.

And, it provides that "In addition, fees authorized by title VIII of this Act may be collected and credited to this account as offsetting collections: Provided, That not to exceed $218,754,000 derived from such offsetting collections shall be available until expended for authorized purposes: Provided further, That not less than 58 full-time equivalents, 72 positions and $8,551,000 shall be for the examination of trademark applications; and not less than 378 full-time equivalents, 709 positions and $106,986,000 shall be for the examination and searching of patent applications; Provided further, That not more than 20 full-time equivalents, 20 positions and $4,955,000 shall be for the Office of General Counsel: Provided further, That the total amount appropriated from fees collected in fiscal year 2005, including such increased fees, shall not exceed $1,574,754,000;

Title VIII, which is at pages 174-192 of the Rules Committee's PDF draft, is titled "PATENT AND TRADEMARK FEES". It incorporates much of the language of HR 1561.

March 3, 2004, the House approved HR 1561, the "United States Patent and Trademark Fee Modernization Act of 2003", by a vote of 379-28. See, Roll Call No. 38. See, story titled "House Passes USPTO Fee Bill", also published in TLJ Daily E-Mail Alert No. 849, March 4, 2004. The bill contains increases in user fees that implement the U.S. Patent and Trademark Office's (USPTO) 21st Century Strategic Plan. It also provides for U.S. outsourcing of patent searches, and an end to the diversion of user fees to subsidize other government programs. The Senate Judiciary Committee, but not the full Senate, has approved this bill.

HR 4818 essentially cuts and pastes most of the USPTO fee bill into the appropriations bill. However, it omits the language in Section 5 of HR 1561 that addresses ending the diversion of USPTO fees to subsidize other government programs. It also deletes requirements for studies. It also deletes some conforming amendments. It adds language regarding transition and the temporary nature of these provisions.

It does include HR 1561's language that allows the outsourcing of patent searches, but only to U.S. companies using U.S. citizens.

Appropriations Bill Provides $281 Million for FCC

11/20. The House and Senate both approved the conference report on HR 4818, the huge omnibus appropriations bill that includes appropriations for many departments and agencies, including the Federal Communications Commission (FCC).

Division B [huge PDF scan] of HR 4818 is titled "Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 2005". It contains the FCC provisions.

It provides, at page 135, "For necessary expenses of the Federal Communications Commission, as authorized by law, ... $281,098,000."

Section 634, at page 170, provides that "None of the funds appropriated by this Act may be used by the Federal Communications Commission to modify, amend, or change its rules or regulations for universal support payments to implement the February 27, 2004 recommendations of the Federal-State Joint Board on Universal Service regarding single connection or primary line restrictions on universal service support payments."

Section 638, at page 172, provides that "Notwithstanding 40 U.S.C. 524, 571, and 572, the Federal Communications Commission may sell the monitoring facilities in Honolulu, Hawaii, and Livermore, California, including all real property."

There are also FCC related provisions in Division J [PDF scan], titled "Other Matters". First, it includes a much revised version of the Satellite Home Viewer Extension Reauthorization Act (SHVERA). This is at PDF pages 122-228 of the Rules Committee draft. Second, it includes, at page 16, a provision applicable only to certain Alaska tariffs.

Appropriations Bill Includes H1B and L1 Visa Provisions

11/20. The House and Senate both approved the conference report on HR 4818, the huge omnibus appropriations bill that includes appropriations for many departments and agencies. It also contains many substantive bills, including language titled the "L-1 Visa and H-1B Visa Reform Act". H-1B visas enable skilled high tech workers to work in the U.S. The annual quota is currently 65,000. HR 4818 would allow an additional 20,000 visas to be issued to graduates of U.S. universities with a masters, or higher, degree.

As of publication of this issue, the conference report was not yet published in the Congress's Thomas web site. However, it is in the House Rules Committee web site. See, web page with hyperlinks to the different divisions of the bill. See, Division J [PDF scan], titled "Other Matters". This copy is a PDF scan of 316 pages. It is a very long download. It is also a hand marked draft.

HR 4818 includes the S 1635, the "L-1 Visa (Intracompany Transferee) Reform Act of 2004", sponsored by Sen. Saxby Chambliss (R-GA). This was a stand alone bill that was amended and approved by the Senate Judiciary Committee on September 30, 2004. The version in HR 4818 further amends the language of S 1635.

Sen. Chambliss described his bill when he introduced it on September 17, 2003. "Congress created the L-1 visa to allow international companies to move executives, managers, and other key personnel within the company and into the U.S. temporarily. The L-1 is an important tool for our multi-national corporations, however, some companies are making an end-run around the visa process by bringing in professional workers on L-1 visas and then outsourcing those workers to a third party company. In other words, some firms are using the so-called ``L-1 loophole´´ to become the international equivalent of temp agencies, or ``job shops.´´ As a result, American workers are being displaced by foreign workers who are brought to the U.S. essentially for their labor. This must stop -- my legislation targets the problem, closes the loophole, and protects U.S. jobs from inappropriate use of the L-1 visa." See, Congressional Record, September 17, 2003, at Pages S11686-7.

HR 4818 also includes the "H-1B Visa Reform Act of 2004". This is new. This bill had not been previously approved by either the House or Senate. No Committee reported this bill. No Committee held a hearing on this bill.

H-1B refers to 8 U.S.C. § 1101(a)(15)(H)(i)(b). The quota for H-1B visas is set at 8 U.S.C. § 1184(g). It had been 65,000. It was raised for fiscal years 1999-2003. It is now back to 65,000 per year.

HR 4818 amends Section 1184(g)(5), which currently provides that "The numerical limitations contained in paragraph (1)(A) shall not apply to any nonimmigrant alien issued a visa or otherwise provided status under section 1101(a)(15)(H)(i)(b) of this title who is employed (or has received an offer of employment) at -- (A) an institution of higher education (as defined in section 1001(a) of title 20, or a related or affiliated nonprofit entity; or (B) a nonprofit research organization or a governmental research organization."

HR 4818 adds a new Subsection (C) that provides, "(C) has earned a master's or higher degree from a United States institution of higher education (as defined by section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)), until the number of aliens who are exempted from such numerical limitation during such year exceeds 20,000."

This effectively raises the H-1B quota by 20,000.

HR 4818 also amends Subsection (A) and (B), quoted above, to include not only persons "employed", but also persons "employed (or has received an offer of employment)". (Parentheses in original.)

These visas provisions are Title IV of Division J of HR 4818. The Rules Committee PDF draft is not paginated. However, this title is PDF pages 37-47. It also includes, in a handwritten notation, at page 37, a name and phone number. It is Joe Jacquot, of Sen. Chambliss's staff.

On November 16, 2004, HP, Intel, Level 3 Communications, Micron Technology, Microsoft, and Texas Instruments released an essay in which they urged the Congress address H-1B visas.

They wrote that "Just as the economy is gaining strength, and as companies work to keep and expand jobs in the United States, we have been stymied in our efforts to employ the scarce talent that could help sustain the economy’s momentum. Although individuals with H-1B visas are only a small percentage of the total workforce in any of our organizations, we believe these talented individuals are an essential part of our ability to compete and succeed."

The companies suggested that "Congress has an opportunity to ease the problem now by providing an exemption from the cap on H-1B visas for individuals who have earned advanced degrees from American universities. Lawmakers also can help by finding ways to streamline the process of obtaining green cards for these professionals, whose education and specialized skills are needed to help maintain U.S. competitiveness and to help secure America's technological future."

House Approves Commercial Space Launch Bill

11/20. The House approved HR 5382, the "Commercial Space Launch Amendments Act of 2004", on Saturday, November 20, 2004, by a vote of 269-120. See, Roll Call No. 541. The vote was partisan. Republicans voted 206-2, while Democrats voted 63-117.

Rep. Dana Rohrabacher (R-CA), Rep. Sherwood Boehlert (R-NY), and Rep. Bart Gordon (D-TN) introduced this bill on November 18, 2004. It was referred to the House Science Committee. The Committee held no hearing or markup on this bill. However, this bill is similar to HR 3752, which the House approved back on March 4, 2004, by a vote of 402-1. See, Roll Call No. 39. See also, S 1260, which was approved by the Senate Commerce Committee on July 24, 2004.

HR 5382 amends the Commercial Space Launch Act, Public Law No. 98-575, which is codified at 49 U.S.C. § 70101, et seq.

The House Science Committee wrote in a release issued on November 20 that this bill "will help promote the emerging commercial human space flight industry by putting it on a more solid regulatory footing. It will also make it easier to launch new types of reusable suborbital rockets by allowing the Federal Aviation Administration (FAA) to issue experimental permits that can be granted more quickly and with fewer requirements than licenses."

The Committee elaborated that "Among the negotiated changes in the bill is increased authority for FAA to regulate launches with regard to the safety of passengers and crew. In both the original and current versions, FAA is given full jurisdiction to regulate launch vehicles and procedures to ensure the safety of non-participants (i.e.: third parties on the ground). H.R. 5382 goes further in safety regulation by allowing FAA to regulate launch vehicles and procedures that have been shown to be dangerous or potentially dangerous to passengers and crew.  The bill also ensures participants are fully aware of the inherent risks of human space travel by requiring launch companies to provide customers and crew with a disclaimer warning that the federal government has not certified the safety of the vehicle." (Parentheses in original.)

House Approves CREATE Act Again

11/20. The House approved S 2192, the CREATE Act, by unanimous consent on Saturday, November 20, 2004. The Senate previously approved the bill. It is ready for President Bush's signature.

This is the "Cooperative Research and Technology Enhancement (CREATE) Act of 2004", a bill to promote collaborative research.

The House approved its version of the bill, HR 2391, on March 10, 2004 by a voice vote. See, story titled "House Passes CREATE Act" in TLJ Daily E-Mail Alert No. 854, March 11, 2004. The Senate approved its version, S 2192, on June 25, 2004. The bills are substantially the same. The report language that accompanies the two bills differs. There may also have been some competition over bragging rights to authorship of the bill.

Also, the language of the CREATE Act is included in S 3021, the "Family Entertainment and Copyright Act of 2004", which the Senate approved on Saturday, November 20, 2004. See, story titled "Senate Approves Copyright Bill" in TLJ Daily E-Mail Alert No. 1,024, November 23, 2004.

The CREATE Act amends Section 103(c) of the Patent Act, which is codified at 35 U.S.C. § 103, to address the August 8, 1997 opinion of the U.S. Court of Appeals for the Federal Circuit in OddzOn Products, Inc. v. Just Toys, Inc., which ruled that derived prior art may serve as evidence of obviousness.

Section 103(c) currently provides a safe harbor for inventions that are the product of collaboration involving co-inventors within a single company. However, scientific research is increasingly being conducted jointly by multiple companies, universities, government labs, and/or other entities.

The holding in the OddsOn case threatens to discourage collaborative research, where the scientists involved are not employed by the same company or entity. Basically, the Court interpreted Section 103(c) to mean that prior art under Sections 102(f) or 102(g) could be used to determine the obviousness of an invention where there is no common ownership or assignment of the invention and information being shared among the collaborators, and the information exchanged is not publicly known. The bill amends Section 103 to provide that patentability is not precluded in the case of research conducted across entities pursuant to a joint research agreement.

Appropriations Bill Includes SHVERA

11/20. The House and Senate both approved the conference report on HR 4818, the huge omnibus appropriations bill, on Saturday, November 20, 2004. It includes a revised version of the "Satellite Home Viewer Extension and Reauthorization Act of 2004", also known as the "W. J. (Billy) Tauzin Satellite Television Act of 2004"

The House previously approved an earlier version of the SHVERA as a stand alone bill, HR 4518, by voice vote on October 6, 2004.

As of publication of this issue, the conference report on HR 4818 was not yet published in the Congress's Thomas web site. However, it is in the House Rules Committee web site. See, web page with hyperlinks to the different divisions of the bill. The SHVERA is in Division J [PDF scan], titled "Other Matters". This copy is a PDF scan of 316 pages. It is a very long download. The SHVERA is at PDF pages 122-228 of the Rules Committee draft.

Rep. Joe Barton (R-TX) (at right), the Chairman of the House Commerce Committee, stated in a release that "Passage of SHVERA will increase competition and consumer choice by both allowing satellite providers to continue to provide local and network broadcasts to viewers otherwise unable to receive local programming in their area, and to carry certain out-of-market signals in a comparable way to what cable operators are currently permitted to do. These provisions mean rural Americans will not be cut off from the world of information. From Washington to the distant expanses of Alaska, viewers will be able to have their fingers on the pulse of breaking news. Through the telecommunications medium, we truly have the ability to technologically narrow the expanse of our universe."

Sen. John McCain (R-AZ) stated in a release that "with passage of this bill, Americans who are unable to receive a network television station over-the-air, often those who live in rural areas, will continue to be able to enjoy network programming via satellite. Additionally, I am pleased that passage of this bill will, for the first time, ensure that these same Americans can enjoy digital High-Definition television programming via satellite, even if they are unable to receive the broadcast signal over-the-air."

Sen. McCain continued that "The idea is simple: a consumer who pays good money for an expensive high definition television set should not be denied the ability to enjoy exclusive network programming like the Super Bowl or the All-Star game in high definition merely because he lives in a rural area. This is the right result for rural Americans. I am also proud of this legislation because it will eliminate the discriminatory practice of splitting local broadcast stations, often foreign-language or religious broadcast stations, between two satellite dishes."

Bush Addresses Trade at APEC Conference

11/20. President Bush traveled to Santiago, Chile for the Asia-Pacific Economic Cooperation (APEC) summit. He gave a speech on November 20, 2004.

He stated that "We want to seek wider trade and broader freedom and greater security for the benefit of our partners and for the benefit of all. That's what I'm going to do over the next four years. The first goal is to lower barriers to trade and investment and to promote sound fiscal policies for all our governments. Free and fair trade combined with prudent fiscal discipline are the foundation of the region's remarkable prosperity, and I'm committed to staying on the path to pro-growth, pro-economic growth -- economic growth by pro-growth policies."

He stated that "this government and our country is strongly committed to the WTO's Doha Round of negotiations. And my Trade Minister will be strongly committed to ensure the success of the WTO round." He added that "We're going to be aggressive about our bilateral trade agreements and our regional trade agreements."

He said that "I believe free trade is necessary for economic development, that free trade is essential to prosperity. But it is not sufficient, and we understand that." He also said that "economic freedom and political liberty are indivisible".

He also elaborated on this point in his Saturday radio address. He said that "we know that freedom is indivisible. The economic liberty that builds prosperity also builds a demand for limited government and self rule. Modernization and progress eventually require freedom in all its forms. And the advance of freedom is good for all, because free societies are peaceful societies. America and our friends are helping other countries lay the foundations of democracy by establishing independent courts, a free press, political parties and trade unions, by instituting the rule of law and by keeping up the fight against corruption."

The White House press office also issued a release on the APEC summit that addresses talks regarding intellectual property protections. It states that "Leaders welcomed the ministers' agreement to take actions next year to reduce piracy and trade in counterfeit goods, address online piracy issues, and increase IPR cooperation and capacity building. This U.S.-driven APEC commitment complements the Bush Administration's recently launched Strategy Targeting Organized Piracy (STOP) to shut down global trade in counterfeit and pirated products and crack down on criminal networks that traffic in these goods."

See also, conference web site.

People and Appointments

11/20. Sen. Ron Wyden (D-OR) previously placed a hold on the nomination of Deborah Majoras to be Chairman of the Federal Trade Commission (FTC). He stated in the Senate on November 19, 2004 that "I will no longer object to any unanimous consent request for the Senate to take up Ms. Majoras' nomination." See, Congressional Record, November 19, 2004 at Pages S11486-7. On November 20, 2004, the Senate confirmed Majoras and Jonathan Liebowitz to be Commissioners of the FTC.

11/20. The Senate confirmed Jonathan Adelstein to be a Commissioner of the Federal Communications Commission (FCC) for a term that expires on June 30, 2008.

11/20. The Senate confirmed Mike Gallagher to be head of the National Telecommunications and Information Administration (NTIA).

11/20. The Senate confirmed Ted Kassinger to be Deputy Secretary of Commerce.

11/20. The Senate confirmed Ben Wu to be Assistant Secretary of Commerce for Technology Policy.

11/20. The Senate confirmed Arden Bement to be Director of the National Science Foundation.

11/20. The Senate confirmed Jon Dudas to be Under Secretary of Commerce for Intellectual Property, and Director of the U.S. Patent and Trademark Office (USPTO).

11/20. The Senate confirmed Micaela Alvarez to be a Judge of the U.S. District Court for the Southern District of Texas.

11/20. The Senate confirmed Keith Starrett to be a Judge of the U.S. District Court for the Southern District of Mississippi.

11/20. The Senate confirmed Christopher Boyko to be a Judge of the U.S. District Court for the Northern District of Ohio.

FCC Releases Study on Cable and Satellite A La Carte Pricing

11/19. The Federal Communications Commission's (FCC) Media Bureau (MB) released a study [217 pages in PDF] titled "Report On the Packaging and Sale of Video Programming Services To the Public". It examines the possibility of satellite and cable companies providing a la carte and themed tier services.

The FCC prepared this study in response to requests from senior members of the House and Senate Commerce Committees. Before writing this study, the MB sought and reviewed public comments.

The study concludes that "Although the Commission shares the public’s concern about rising MVPD rates and the growing coarseness of programming on television and strongly believes in providing the public with greater choice in how they consume television, the Report finds that many of the harms suggested by opponents of a la carte or themed-tier services have merit, although not necessarily to the degree advocated by its most vocal critics. The Report concludes that a la carte regulation will likely increase operational expenses for MVPDs in three main areas: (1) equipment and infrastructure; (2) customer service operations; and (3) billing and back office support. Unless constrained by regulation, many of these increased costs would likely be passed on to subscribers, resulting in higher subscriber fees. In addition, the MVPD cost increases would be most detrimental to smaller cable operators, who often have more limited and more costly options when it comes to obtaining capital to support investment in their operations. The Report discusses how this would have an adverse impact on competition as smaller cable operators would have a difficult time competing with the industry’s primary competitors-the DBS providers."

It also finds "legitimacy to programmers’ concerns about an a la carte regime. Existing networks sold on an a la carte basis spend a significant amount of their revenue marketing themselves to consumers. Under an a la carte mandate, networks formerly sold in tiers would need to significantly increase their marketing expenses to induce consumers to affirmatively select the network. Moreover, any type of a la carte requirement would have a significant negative effect on a program network’s advertising revenues and license fee structure. The loss of cost savings, combined with the loss in advertising revenue and the likely rise in license fees to compensate such losses, may cause many program networks to fail, thus adversely affecting diversity."

Also, it finds that "it is unclear that an a la carte regime would produce the desired result of lower MVPD prices for many pay-television households. The Report's economic analysis estimates that the impact on retail rates of pure or mandatory a la carte sales indicates that only those consumers who would purchase fewer than 9 program networks may see a reduction in their monthly cable bill."

Sen. John McCain (R-AZ), the current Chairman of the Senate Commerce Committee, stated in a release that "I am disappointed in what appears to be a paucity of discussion on the effect of cable and satellite companies offering an a la carte pricing option to consumers in addition to existing pricing options. Instead, it appears the industry has been successful once again in distracting policy makers with a ``parade of horribles´´ that they allege would result from a mandatory a la carte offering. Unfortunately, this creates a fog that obscures the reality that allowing consumers to purchase individual channels would give consumers more control over their cable and satellite bills, particularly for those consumers who watch only a few channels."

Sen. McCain (at right) added that "On behalf of consumers, I will continue working to provide them with more choices and lower prices in the pay television market, whether it be through advocating a voluntary a la carte option or promoting greater competition in the pay television market."

FCC Chairman Michael Powell stated in a release that "We remain committed to our long-standing policy goals of making communications and media technologies available to all Americans at affordable rates and fostering diversity in our nation's media.  Many Americans are frustrated with year after year increases in their pay-television bills and we will continue to address those concerns through the recommendations provided in this report and other avenues available to the Commission."

Robert Sachs, P/CEO of the National Cable & Telecommunications Association (NCTA), stated in a release that "The FCC report to Congress makes clear that government-mandated per-channel pricing would not offer any benefits to the vast majority of consumers and would in fact result in higher prices, fewer choices and less diversity in programming. The FCC's report confirms the October 2003 conclusions of the government's General Accountability Office (GAO), and a July 2004 NCTA commissioned study by Booz Allen Hamilton. The FCC report shows that, in order for cable and satellite customers to pay less than their current monthly service, customers who choose a la carte would only be able to purchase and view a handful of channels. Under this scenario, all other customers would end up paying more – even those who chose to continue purchasing the same expanded basic tiers that they buy today."

On October 24, 2003, the General Accounting Office (GAO) released a study [94 pages in PDF] titled "Telecommunications: Issues Related to Competition and Subscriber Rates in the Cable Television Industry". See, story titled "GAO Releases Study on Cable Industry" in TLJ Daily E-Mail Alert No. 766, October 27, 2003.

Greenspan Discusses Role of Intellectual Property in Trade

11/19. Federal Reserve Board (FRB) Chairman Alan Greenspan gave a speech in Frankfurt, Germany on financial policy and currencies. However, he also referenced the role of intellectual property in trade and globalization.

He said that "globalization of trade in goods, services, and assets continues to move forward at an impressive pace, despite some indications of increased resistance to that process and the evident difficulties in completing the Doha Round. The volume of trade relative to world gross domestic product has been rising for decades, largely because of decreasing transportation costs and lowered trade barriers. The increasing shift of world GDP toward items with greater conceptual content has further facilitated increased trade because ideas and services tend to move across borders with greater ease and speed than goods."

Greenspan tends not to use the phrase "intellectual property", preferring instead "conceptual products". See, Greenspan's April 4, 2003, speech titled "Market Economies and Rule of Law", and story titled "Greenspan Addresses Intellectual Property Laws" in TLJ Daily E-Mail Alert No. 638, April 7, 2003. See also, Greenspan's speech of February 27, 2004, and story "Greenspan Discusses Property Rights in Conceptual Products" in TLJ Daily E-Mail Alert No. 846, March 1, 2004.

More News

11/19. President Bush signed S 2986, which increases the public debt limit. See, White House release.

11/19. Sen. Chris Dodd (D-CT) introduced S 3020, the "Free Speech Protection Act of 2004". Sen. Dodd issued a release that states that the purpose of this bill is "to protect individuals and organizations involved in gathering and disseminating news from being hauled into federal court and forced to disclose their sources or other unpublished information." It adds that the bill would "establish a strong and uniform federal reporters' shield law modeled after statutes currently in place in thirty-one states and the District of Columbia." The bill was referred to the Senate Judiciary Committee.

11/19. The Federal Communications Commission (FCC) announced that it issued a Grant of Certification to Vanu, Inc. for a cellular base station transmitter. The FCC published a short release [PDF], but not the Grant of Certification, in its web site. This release states that this is the first time that the FCC has approved a software defined radio device in the U.S. The FCC's Office of Engineering and Technology's (OET) Laboratory Division issued the Grant of Certification. FCC Chairman Michael Powell stated that "This is the first step in what may prove to be a radio technology revolution". See also, Vanu release.

11/19. The Office of the U.S. Trade Representative (USTR) issued a release [PDF] regarding discussions at the Asia-Pacific Economic Cooperation (APEC) summit in Santiago, Chile pertaining to protection of intellectual property rights. It states that the participants "stressed the importance of effective intellectual property rights protection and enforcement regimes, and their contribution towards promoting investment, innovation, and growth."

11/19. The U.S. Court of Appeals (FedCir) issued its opinion [11 pages in PDF] in Catalina Marketing International v. Coolsavings.com, a patent case in which the Court of Appeals affirmed the District Court's claim construction and dismissal. Catalina Marketing International, Inc. owns U.S. Patent No. 4,674,041 titled "Method and Apparatus for Controlling the Distribution of Coupons." Coolsavings.com, Inc. operates a web site that uses inputted user demographic information to target coupon offers for various products to potential customers. Catalina filed a complaint in U.S. District Court (NDIll) against Coolsavings alleging patent infringement. The District Court dismissed the complaint following construction of the claim. Catalina appealed.

11/19. Thomas Barnett, a Deputy Assistant Attorney General in the Antitrust Division, gave a speech in Washington DC titled "Antitrust Enforcement Priorities: A Year in Review".

Senate May Consider Intellectual Property Bill

11/18. Numerous intellectual property bills and proposals are being considered by the Congress. Most pertain to copyright, but some address patent, trademark and other topics. Some bills have already been approved by one or both bodies. Last month the Senate Judiciary Committee approved an omnibus bill that incorporates numerous stand alone bills. Another omnibus bill, that overlaps the previous one, is being circulated among Senate offices.

On October 9, 2004, the Senate Judiciary Committee approved a package of copyright bills. This composite bill is titled the "Intellectual Property Protection Act of 2004", or IPPA. See, text of bill [44 pages in PDF], and text of bill, in HTML, with hyperlinked table of contents, and U.S. Code hyperlinks. See also, story titled "Senate Judiciary Committee Approves Large Collection of Copyright Bills" in TLJ Daily E-Mail Alert No. 994, October 11, 2004.

The IPPA is numbered HR 2391. However, HR 2391 EH, which has been approved by the House, is a patent bill. The Senate Judiciary Committee made the content of HR 2391 EH a part of the IPPA.

The current draft, which has not been introduced, states that it would be sponsored by Sen. Orrin Hatch (R-UT), the Chairman of the Senate Judiciary Committee. The original cosponsors would be Sen. Patrick Leahy (D-VT), Sen. John Cornyn (R-TX), and Sen. Joe Biden (D-DE).

Title I: ART Act. This title of the current draft is titled the "Artists' Rights and Theft Prevention Act of 2003", or ART Act. It is a revised version of S 1932, which the full Senate approved as a stand alone bill on June 25, 2004.

This title includes, among other provisions, criminalization of certain unauthorized recording of motion pictures in a motion picture exhibition facility. § 208 of the IPPA, and § 108 of HR 4077, the "Piracy Deterrence and Education Act of 2004", which the House approved on September 28, 2004, contain similar language. It criminalizes using camcorders to copy movies in motion picture exhibition facilities, such as movie theatres. This is aimed at those who take camcorders into movie theatres and surreptitiously copy movies, thereby enabling pirates to obtain and market copies of movies as soon as they are shown in theatres.

Title II: ClearPlay Bill. This title of the current draft contains a much revised version of the "Family Movie Act", which is also known as the ClearPlay bill.

§ 212 of the IPPA (§ 112 of HR 4007 EH) contains another version of the "Family Movie Act". This provision, which is included with the ClearPlay technology in mind, adds a new ¶ 11 to 17 U.S.C. § 110 (which provides exceptions to the exclusive rights of copyright).

The current draft contains a content skipping exception. The exact wording is as follows: "the making imperceptible, by or at the direction of a member of a private household, of limited portions of audio or video content of a motion picture during a performance in or transmitted to that household for private home viewing, from an authorized copy of the motion picture, or the creation or provision of a computer program or other technology that enables such making imperceptible and that is designed and marketed for such use at the direction of a member of a private household, if no fixed copy of the altered version of the motion picture is created by such computer program or other technology".

However, the current draft does not include the IPPA's language regarding ad skipping. That is, the IPPA provided that the new exception applies only if "no changes, deletions or additions are made by such computer program or other technology to commercial advertisements, or to network or station promotional announcements, that would otherwise be performed or displayed before, during or after the performance of the motion picture".

Title III. This title includes the "National Film Preservation Act of 2004" and the "National Film Preservation Foundation Reauthorization Act of 2004". Both of these are in the IPPA.

Title IV. This title includes the "Preservation of Orphan Works Act". This too is in the IPPA.

Title V. This title includes the "Anticounterfeiting Act of 2004" and "Fraudulent Online Identity Sanctions Act".

Title VI: CREATE Act. This title is the "Cooperative Research and Technology Enhancement (CREATE) Act of 2004". This is HR 2391, which has been approved by the House, and S 2192, which has been approved by the Senate. The language of these bills is also in the IPPA.

Provisions Not In the Current Draft. Notably, two of the titles of the IPPA are not in the current draft. The current draft does not include Title III of the IPPA, which is the "Protecting Intellectual Rights Against Theft and Expropriation Act of 2004", or PIRATE Act.

The PIRATE Act would authorize the Department of Justice (DOJ) to bring civil actions for copyright infringement for conduct that already constitutes criminal copyright infringement under 17 U.S.C. § 506. This would accomplish two things. It would make it easier to prevail, because, among other things, the civil action would have a lower burden of proof. It would also provide a less punitive action for youthful P2P music pirates. This is § 302 of the IPPA. This provision would not make any conduct illegal that is not already illegal. Nevertheless, some of the groups that oppose effective protection of copyrights adamantly oppose this provision.

Nor does the current draft include Title VI of the IPPA, which is the "Enhancing Federal Obscenity Reporting and Copyright Enforcement Act of 2004", also known as the EnFORCE Act. This is S 1933.

Also, there are many other intellectual property bills that that are not in the current draft, the IPPA, or HR 4077 EH.

None of these bills includes S 2560, the "Inducing Infringement of Copyrights Act of 2004", a bill that responds to the opinions of the U.S. District Court and the U.S. Court of Appeals (9thCir) in MGM v. Grokster. It would create a new cause of action for "intentional inducement of infringement".

None include HR 107, the "Digital Media Consumers' Rights Act of 2003".

None include HR 3261, the "Database and Collections of Information Misappropriation Act", or HR 3872, the "Consumer Access to Information Act of 2004", bills related to databases

And, none include HR 1561, the "United States Patent and Trademark Fee Modernization Act of 2004". The House passed this bill on March 3, 2004 by a vote of 379-28. See, Roll Call No. 38. See also, story tiled "House Passes USPTO Fee Bill" in TLJ Daily E-Mail Alert No. 849, March 4, 2004. HR 1561 contains increases in user fees that implement the U.S. Patent and Trademark Office's (USPTO) 21st Century Strategic Plan. It also provides for U.S. outsourcing of patent searches, and an end to the diversion of user fees to subsidize other government programs.

People and Appointments

11/18. Sen. Orrin Hatch (R-UT), the outgoing Chairman of the Senate Judiciary Committee, announced in a release that on January 4, 2005, the Republican members of the Committee intend to vote for Sen. Arlen Specter (R-PA) to be Chairman of the Committee. See also, statement by Sen. Specter.

11/18. The Senate Commerce Committee held a hearing on several pending nominations, including that of Jonathan Adelstein to be a Commissioner of the Federal Communications Commission (FCC). He stated in his prepared testimony [2 pages in PDF] that he will "put the communications needs of our public safety and national security communities at the forefront". He also said that he will "preserve and advance" universal services programs. He said that "It is vital that these programs remain on solid footing. Increasingly, voice, video, and data will flow to homes and businesses over broadband platforms. In this new world, we must promote a comprehensive rollout to all Americans". He also said that the "airwaves belong to the American people", and quoted from Red Lion v. FCC, 395 U.S. 367 (1969).

11/18. The Board of Directors of Sirius Satellite Radio named Mel Karmazin to be the new Chief Executive Officer (CEO). He will replace Joseph Clayton, who will remain as Chairman of the Board of Directors. Until recently, Karmizin was P/CEO of Viacom. Clayton stated in a release that "I am very confident that Mel will accelerate the very positive momentum that we have established at SIRIUS in the past two years. Our recent announcement of the signing of Howard Stern, our exclusive relationship with the National Football League and the partnerships with automakers such as DaimlerChrysler, Ford and BMW are all indications that satellite radio has a central role in the future of broadcast media. We fully expect to achieve the subscriber projections we have given to Wall Street for this year."

More News

11/18. The Department of Commerce's (DOC) Economics and Statistics Administration and National Telecommunications and Information Administration (NTIA) published in the NTIA web site their September 2004 report [32 pages in PDF] titled "A Nation Online: Entering the Broadband Age". This is the sixth in a series of DOC statistical reports on use of computers and the internet in the U.S.

11/18. The Federal Communications Commission's (FCC) International Bureau released foreign ownership guidelines for FCC common carrier and aeronautical radio licenses [PDF]. See also, FCC release [PDF].

11/18. Federal Reserve Board (FRB) Governor Susan Bies gave a speech in New York, New York titled "Fair Value Accounting". She stated, among other things, that "consideration must be given to revenue-recognition issues in a fair value regime. We must ensure that unearned revenue is not recognized up front, as it inappropriately was by certain high-tech companies not so long ago."

11/18. The Recording Industry Association of America (RIAA) announced that its member companies filed lawsuits against an additional 761 alleged infringers in connection with their use of P2P systems. See, RIAA release.

House Approves Copyright Royalty and Distribution Act

11/17. The House approved HR 1417, the "Copyright Royalty and Distribution Reform Act of 2004", by a vote of 407-4. See, Roll Call No. 533. The House first approved the Senate's amendment, by a vote of 407-0. See, Roll Call No. 532. This bill replaces copyright arbitration royalty panels (CARPs) with a Copyright Royalty Judge. The bill is now ready for President Bush's signature.

The bill was introduced on March 25, 2003 by Rep. Lamar Smith (R-TX), Rep. Howard Berman (D-CA), and Rep. John Conyers (D-MI).

The House Judiciary Committee's (HJC) Subcommittee on Courts, the Internet, and Intellectual Property (CIIP) held a hearing on CARPs on April 1, 2003. See, prepared testimony of Marybeth Peters, the Register of Copyrights, and story titled "House Subcommittee Holds Hearing on Bill to Replace CARPs" in TLJ Daily E-Mail Alert No. 635, April 2, 2003. It also held a hearing on June 13, 2002.

The HJC found that CARP decisions are unpredictable and inconsistent, CARP arbitrators lack appropriate expertise to render decisions and frequently reflect either a content or user bias, and the CARP process is unnecessarily expensive. See, Report No. 108-408.

The House approved an earlier version of the bill on March 3, 2004. See, story titled "House Passes Copyright Royalty and Distribution Act" in TLJ Daily E-Mail Alert No. 849, March 4, 2004.

The Senate amended and approved the bill on October 6, 2004. See, story titled "Senate Approves Copyright Royalty and Distribution Reform Act" in TLJ Daily E-Mail Alert No. 992, October 7, 2004.

Rep. Smith, the Chairman of the CIIP Subcommittee, stated on November 17, 2004 that "My bill is necessary to ensure an efficient and effective system for the distribution of copyright royalties." He added that "Today, we have finally reached an agreement that reforms a process that has been too broken for too long. We can look forward to greater creativity, innovation and success in American life when this bill becomes law". See, Smith release.

Sen. Patrick Leahy (D-VT), the ranking Democrat on the Senate Judiciary Committee, spoke in the Senate on November 17. He said that this bill "replaces arbitrators with full-time administrative judges, alleviating the massive financial burden of taking part in a CARP proceeding, and providing the process with continuity and stability. This bill also resolves long-standing disputes over the availability of discovery. Because discovery is available where it is needed, the Copyright Royalty Judges will have the information necessary to render a correct determination, but the costs of discovery will be kept to a minimum. Finally, this bill preserves the traditional role of the Register of Copyrights." See, Congressional Record, November 17, 2004, at Page S11422.

The main difference between the original House version, and the Senate version, is discovery. Rep. James Sensenbrenner (R-WI), the Chairman of the House Judiciary Committee, stated during House debate on the bill on November 17 that "the original House version created greater open-ended discovery of relevant material information over a 60-day period. The changes adopted by the other body make it more difficult for a participant to acquire documents and materials other than statements made by stakeholders and witnesses. In addition, another revision specifically limits the number of interrogatories and depositions that each participant may seek. Both of these changes are consistent with the current trend in administrative law that pares the discovery process. This will save participants time and money." See, Congressional Record, November 17, 2004, at Page H9856.

House Approves DOE Supercomputing Bill

11/17. The House approved HR 4516, the "Department of Energy High-End Computing Revitalization Act of 2004", by voice vote. This is the version of the bill that the Senate approved on October 10, 2004. The bill is now ready for President Bush's signature.

Rep. Judy Biggert (R-IL), sponsor of the bill, stated during House debate that "H.R. 4516 does three things. First, it requires the Secretary of Energy to establish and operate high-end computing facilities involving leadership-class machines that are among the most elite in the world. Second, this bill directs the Secretary to conduct advanced scientific and engineering research and development using these leadership class systems, and to continue to advance the capabilities of high-end computing hardware and software. Finally, the bill requires that these computing facilities be made available on a competitive, peer-reviewed basis to researchers from U.S. industry, institutions of higher learning, national laboratories and other Federal agencies."

Rep. Sherwood Boehlert (R-NY), the Chairman of the House Science Committee, stated in a release that "Supercomputing capability is increasingly becoming a vital component of the efforts of industry and academia to remain global leaders. By supporting the development of the world's fastest computers, and ensuring U.S. researchers and engineers have access to them, H.R. 4516 will strengthen overall U.S. competitiveness and help ensure a healthy, robust economy."

Rep. Boehlert added that "The Science Committee also intends to begin work again early next year on a comprehensive supercomputing bill, like H.R. 4218, the High-Performance Computing Revitalization Act of 2004, which the House passed earlier this year."

The Committee approved HR 4218 by a voice vote at its meeting of June 16, 2004. The Committee held a hearing on HR 4218 on May 13, 2004. See, for example, prepared testimony [PDF] of John Marburger, Director of the White House Office of Science and Technology Policy (OSTP).

Congress Considers Video Voyeurism Bill

11/17. The Senate agreed to a House request to return S 1301, the "Video Voyeurism Prevention Act of 2003", The House approved its version of the bill on September 21, 2004. The Senate approved a different version on September 25, 2003.

Sen. George Allen (R-VA) stated in the Senate on November 17, "I ask unanimous consent that the Senate agree to the request of the House regarding the papers relating to S. 1301". There being no objection, it was so ordered. There was no discussion or debate. See, Congressional Record, November 17, 2004, at Page S11398.

On October 8, 2004 the House approved HRes 842 which provides that "the Clerk of the House of Representatives request the Senate to return to the House the bill (S. 1301) entitled `An Act to amend title 18, United States Code, to prohibit video voyeurism in the special maritime and territorial jurisdiction of the United States, and for other purposes.´"

The House approved S 1301, the "Video Voyeurism Prevention Act of 2003", by voice vote, on September 21, 2004. It criminalizes conduct such as surreptitious use of small digital cameras to capture and publish via the internet privacy invasive images and video. See, story titled "House Approves Video Voyeurism Prevention Act" in TLJ Daily E-Mail Alert No. 981, September 22, 2004.

This bill, if enacted into law, would have limited impact. It only applies in "the special maritime and territorial jurisdiction of the United States". That is, it only applies on federal property, and within federal jurisdiction. However, many states already have enacted similar or related laws. This bill may provide model language for states to follow.

People and Appointments

11/17. The Federal Trade Commission (FTC) announced that Bruce Hoffman, the Deputy Director of the FTC's Bureau of Competition, will leave the FTC, effective November 24, 2004, to return to private practice. See, FTC release.

11/17. President Bush announced his intent to nominate Margaret Spellings to be Secretary of Education. She will replace Rod Paige. See, transcript of White House event.

11/17. Robert Shema was named VP and Chief Operating Officer of the American Cable Association (ACA). He will handle communications, operations and policy matters. See, ACA release [PDF].

More News

11/17. The Office of the U.S. Trade Representative (USTR) announced that USTR Robert Zoellick met with Australian Trade Minister Mark Vaile. The Office of the USTR stated in a release [PDF] that they "finalized arrangements to bring the Australia-United States Free Trade Agreement (FTA) into force on January 1, 2005." The USTR release further states, without elaboration, that "The United States had raised concerns with Australia that its FTA implementing legislation, which its Parliament passed in August 2004, did not fully implement a number of the FTA commitments it made on intellectual property. Australia has committed to take steps, including legislative and regulatory changes, to address these issues."

DOJ Closes Investigation of Merger of Paging Companies

11/16. The Department of Justice's (DOJ) Antitrust Division announced in a release that it has closed its investigation of Arch Wireless's proposed acquisition of Metrocall. It concluded that paging is a shrinking business, and that there is substantial competition from new and forthcoming technologies.

Arch Wireless and Metrocall are the first and second largest providers of paging services in the U.S., based upon number of customers.

The Antitrust Division stated that "The facts did not support a conclusion that this merger will give a combined Arch/Metrocall market power in the markets in which they compete. Purchasers of paging services will likely continue to have a number of other choices after the merger, including other paging carriers. Although this particular transaction should not threaten to harm competition or consumers, we will continue to be vigilant in our enforcement of the antitrust laws in this area."

The Antitrust Division elaborated that "There has been a substantial decrease in the number of pager units in service over the past five years, declining from more than 45 million units in1999 to under 12 million today. Therefore, the Division focused its investigation on customers that may continue to need to use pagers. None of the theories of competitive harm considered was supported by the facts. The Division found neither likely harm from coordinated interaction nor substantive proof of potential unilateral effects post-merger. The services of other paging carriers and self-provisioning of pager services by customers provide alternatives to the paging services of the merging parties. In addition, new wireless technologies such as wi-fi should continue to broaden the alternatives available to customers of the merging parties."

On November 9, 2004 the Federal Communications Commission (FCC) approved the transfer of licenses associated with this merger. See, Arch Wireless release of November 9, 2004. See also, FCC's web page for this merger review.

The two companies announced their proposed merger on March 29, 2004. See, Arch Wireless release of March 29.

The merged companies will be renamed USA Mobility, Inc. The merged company will also provide wireless e-mail, instant text messaging, mobile internet access, and other services.

People and Appointments

11/16. The Senate confirmed Francis Harvey to be Secretary of the Army by a vote of 85-12. See, Roll Call No. 212.

Opponents of IPPA Urge Delay Until 109th Congress

11/16. A collection of groups wrote a letter to Sen. Orrin Hatch (R-UT) and the other Senators urging them not to pass the bill titled "Intellectual Property Protection Act", or IPPA, in the remaining days of the 108th Congress.

On October 9, 2004, the Senate Judiciary Committee approved a package of copyright bills. This composite bill is titled the "Intellectual Property Protection Act of 2004". See, text of bill [44 pages in PDF], and text of bill, in HTML, with hyperlinked table of contents, and U.S. Code hyperlinks. Much of the content of this bill has also been passed by the House. See, story titled "Senate Judiciary Committee Approves Large Collection of Copyright Bills" in TLJ Daily E-Mail Alert No. 994, October 11, 2004.

This bill is numbered HR 2391. However, HR 2391 EH, which has been approved by the House, is a patent bill. The Senate Judiciary Commitee made the content of HR 2391 EH a part of the IPPA.

The signatories of the letter include the Consumer Electronics Association (CEA), the Digital Future Coalition (DFC), and Public Knowledge.

The other signatories are the American Association of Law Libraries, American Conservative Union (ACU), American Library Association (ALA), American Research Libraries, Computer & Communications Industry Association (CCIA), Computer Professionals for Social Responsibility, Electronic Frontier Foundation (EFF), and Free Press.

The signatories, and their members, tend to support limited intellectual property rights regimes, and weak intellectual property rights protections. The IPPA is supported by groups that represent copyright industries, and especially, the music, movie and interactive game industries.

The signatories of this letter wrote that they have "grave concerns about several titles" of the IPPA. They added that "the IPPA contains provisions that, while intended to aid in the protection of intellectual property, may harm the market for and hinder the development of new technologies and may harm long-established user rights. Unfortunately, many of the provisions of the bill did not receive the legislative scrutiny they require."

The letter does not, however, identify any of the sections or titles of the IPPA that the signatories of the letter find objectionable.

They conclude that "we request that the IPPA not be considered during the lame-duck session, but instead be carried over into the new Congress when its controversial provisions can be studied and debated in regular order."

In addition, representatives of many of these groups held a press conference on Friday, November 12, 2004, in which they articulated the nature of their opposition to the IPPA with more specificity.

Consumer Education. Will Rodger of the CCIA stated that the IPPA is "part of a basic pattern of pushing back fair use" and "freedom to innovate through all society".

He also said that "one of the most chilling things is the copyright education program".

§ 205 of the IPPA creates a public education program at the DOJ, to "educate the general public concerning the value of copyrighted works and the effects of the theft of such works on those who create them".

Civil Actions by the DOJ. Stacie Rumenap of the ACU stated that "the biggest problem we have with 2391 is the PIRATE Act".

Title III of the IPPA is the "Protecting Intellectual Rights Against Theft and Expropriation Act of 2004", or "PIRATE Act". One of its provisions would allow the Department of Justice (DOJ), which can already bring criminal actions, to bring civil actions based upon the same conduct.

§ 302 would authorize the DOJ to bring civil actions for copyright infringement for conduct that already constitutes criminal copyright infringement under 17 U.S.C. § 506. This would accomplish two things. It would make it easier to prevail, because, among other things, the civil action would have a lower burden of proof. It would also provide a less punitive action for youthful P2P music pirates.

"It is plain wrong to make the Department of Justice Hollywood's law firm", said Rumenap. It "expands the role of government".

She also read the text of an ad that is being placed by the ACU that builds upon its conservative members' longstanding dislike for the movie industry. It states that "Right Now, Hollywood is trying to ram this flawed bill -- a handout for Tinsel Town fat cats -- through Congress without hearings or debate."

She also explained that the ACU's analysis of the Inducing Infringement of Copyrights Act is similar to their analysis of some gun control proposals. That is, she reasoned that just as it is criminals rather than guns that commit crimes, it is infringers rather than technologies that pirate music and movies. She said that in both arenas, the government should regulate behavior, not technologies.

Public Knowledge's Objections. Gigi Sohn of Public Knowledge, which hosted the press conference, identified several provisions of the IPPA. First, the bill includes, as Title II, the "Piracy Deterrence and Education Act of 2004", which is a revised version of HR 4077 EH, which includes the "Family Movie Act". The House has approved HR 4077 EH as a stand alone bill. She argued that this part of the bill "drastically lowers the standards for what constitutes a criminal copyright violation. The standards are far too vague and could include as targets for prosecution material passively stored on computers or shared on networks."

Although, she and others participants at the press conference expressed support for the part of HR 4077 EH and the IPPA that is known as the "Family Movie Act". § 212 of the IPPA was written with the ClearPlay technology in mind. It adds a new ¶ 11 to 17 U.S.C. § 110 (which provides exceptions to the exclusive rights of copyright). It provides that certain DVD filtering technology is not a violation of copyright.

Second, Sohn argued, as did many other participants at the press conference, that the IPPA's provision giving the DOJ authority to bring civil actions is inappropriate.

Third, she criticized S 1932 and the ART Act. She said that "The problem we have here is that fair use protections under traditional copyright law would be eliminated."

§ 208 of the IPPA criminalizes using camcorders to copy movies in motion picture exhibition facilities, such as movie theatres. This is aimed at those who take camcorders into movie theatres and surreptitiously copy movies, thereby enabling pirates to obtain and market copies of movies as soon as they are shown in theatres. This language is in HR 4077 EH, which has passed the House. It is also in § 3 of S 1932, the "Artists' Rights and Theft Prevention Act of 2004", or ART Act, which was approved by the Senate on June 25, 2004.

Fourth, she argued that the "Family Movie Act" should also allow consumers to skip over ads.

Gary Shapiro of the CEA discussed the legislative process. He said that "our strategy is clearly going to be focusing on the Senate".

He also said that while "Sen. Hatch has been very favorable to the content community ... Sen. Specter's record has been far more balanced".

Sarah Deutsch of Verizon also participated in the press conference.

Several participants also criticized the inducement bill, which is not a part of the IPPA. Rodger of the CCIA also criticized legislative proposals to provide statutory protections for collections of data. None of these are a part of the IPPA.

Summary of Briefs in MGM v. Grokster

11/16. On August 19, 2004 the U.S. Court of Appeals (9thCir) issued its opinion [26 pages in PDF] in MGM v. Grokster, affirming the District Court holding that Grokster's and Streamcast's peer to peer (P2P) file copying networks do not contributorily or vicariously infringe the copyrights of the holders of music and movie copyrights. See story titled "9th Circuit Holds No Vicarious Infringement in Grokster Case" in TLJ Daily E-Mail Alert No. 963, August 20, 2004.

The petitioners include Metro Goldwyn Mayer Studios Inc., other movie studios, record companies, and music publishers and songwriters. The respondents are Grokster, Ltd. and StreamCast Networks, Inc. The 9th Circuit's opinion is reported at 380 F.3d 1154. The Supreme Court case number is 04-480.

Petition for Writ of Certiorari. On October 8, 2004 the petitioners filed their petition for writ of certiorari [46 pages in PDF]. See also, story titled "Movie and Music Industry Entities File Cert Petition in MGM v. Grokster" in TLJ Daily E-Mail Alert No. 994, October 11, 2004.

The petitioners argue that "This is one of the most important copyright cases ever to reach this Court. Resolution of the question presented here will largely determine the value, indeed the very significance, of copyright in the digital era."

They argue that "The Ninth Circuit's refusal to hold Grokster and StreamCast accountable under these circumstances is a radical departure from principles of secondary liability recognized ``in virtually all areas of the law,´´ including copyright." (Quoting from Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984).

They continue that "The Ninth Circuit read Sony-Betamax not as endorsing but as rejecting those established principles, and as instead imposing ``limitations´´ and ``higher standards´´ for contributory infringement that foreclose liability here."

The petitioners argue that there is a conflict between the Ninth Circuit and the U.S. Court of Appeals (7thCir), based upon its opinion [23 pages in PDF] in In Re Aimster Copyright Litigation, 334 F.3d 643. On June 30, 2003, the 7th Circuit issued its opinion affirming the District Court's preliminary injunction affecting the Aimster (aka Madster) file copying system. See, story titled "7th Circuit Affirms Preliminary Injunction in Aimster Case" in TLJ Daily E-Mail Alert No. 691, July 1, 2003.

The petitioners argue that "Review is urgently needed not only to resolve the conflict between the Ninth and Seventh Circuits, but more importantly to clarify the standards for secondary liability applicable to Internet-based services that facilitate copyright infringement. The infringement Grokster and StreamCast foster is inflicting catastrophic, multibillion-dollar harm on petitioners that cannot be redressed through lawsuits against the millions of direct infringers using those services. Left undisturbed, the Ninth Circuit’s decision will effectively insulate Grokster and StreamCast from suit nationwide, leaving these harms unremedied."

They conclude that "the Ninth Circuit’s decision threatens the very foundations of our copyright system in the digital era. The ease with which copyrighted works in digital form can be unlawfully copied and distributed millions of times over on the Internet makes it especially important that traditional principles of secondary copyright liability apply to enterprises that, like respondents, brazenly encourage and profit from infringement. Unless respondents and those like them can be held accountable, copyright will soon mean nothing on the Internet, and the incentives on which our copyright system rests will be imperiled."

Respondents' Opposition Brief. On November 8, 2004, the respondents filed their brief [54 pages in PDF] in opposition. It was prepared by Mark Lemley (Keker & Van Nest, attorney for Grokster) and Cindy Cohn (for Streamcast).

The respondents argue that "Congress is the body the Constitution charges with determining what is ``just and economically rational,´´ Pet. 12, in striking the balance between the interests of copyright holders and technology innovators. Congress, moreover, is at this moment considering the very question Petitioners pose to this Court -- whether and how copyright law should be altered to address the challenges and opportunities created by new internet technologies, including peer-to-peer (``P2P´´) file sharing. Congress’ judgment will be informed by the essential facts that Petitioners ask this Court to brush aside -- that the technology in question has substantial noninfringing uses, and that the prospect of massive and unpredictable liability for innovators under Petitioners’ theory would cast a pall over the nation’s technology sector.

They continue that the "Petitioners ask this Court to preempt the legislative process and substitute judicial policy-making: ``A court must assess a system’s actual and probable potential infringing and noninfringing uses, and then must balance the costs and benefits to accommodate the interests of copyright holders in preventing infringement while protecting the right of the public to use products for noninfringing uses.´´"

But, they argue, the Supreme Court rejected this invitation in the Sony case. They wrote that the Sony case announced "a rule of deference to Congress that has served copyright owners, innovators and the public well for twenty years. In turn, Congress has repeatedly amended the Copyright Act to address new technologies and to craft balanced, nuanced statutory solutions to accommodate the competing interests of these two critical sectors of the American economy, as well as ``society’s . . . interest in the free flow of ideas, information and commerce.´´"

The Senate Judiciary Committee has considered, but not approved, S 2560, the "Inducing Infringement of Copyrights Act of 2004", a bill that responds to the 9th Circuit's holding in MGM v. Grokster.

The respondents also argue that the Appeals Court correctly decided the case, and correctly applied the Sony case.

Amicus Briefs in Support of Granting Certiorari. The Supreme Court has also received numerous amicus briefs in support of granting certiorari.

See for example, amicus curiae brief [12 pages in PDF] of the Progress and Freedom Foundation (PFF), dated November 8, 2004. See also, story titled "PFF Urges Supreme Court to Grant Certiorari in MGM v. Grokster" in TLJ Daily E-Mail Alert No.1,014, November 9, 2004.

Also, 41 states file an amicus curiae brief [34 pages in PDF] that also focuses on P2P pormography. It states that P2P networks "are increasingly becoming havens for non-copyright-related criminal activity. Of particular concern to the Amici is the widespread use of P2P technology to disseminate pormography, particularly unlawful child pormography, and the deliberate choice of some P2P networks to disable control devices that might be effective in tracking and prosecuting this predatory practice."

The states' brief adds that "As part of an ongoing effort to keep pace with emerging technologies that are being used to commit, facilitate, and conceal Internet crimes against children, federal, state, and local law enforcement officials have joined forces as part of a nationwide initiative to combat the large volume of child pormography being distributed through P2P networks."

The brief also argues that states are harmed by the illegal copyright infringement that takes place on P2P systems by the loss of jobs, loss of sales, and loss of state and local tax revenues.

There is also the amicus curiae brief [14 pages in PDF] of the American Intellectual Property Law Association (AIPLA), dated November 8, 2004. It is titled "in support of neither party". However, it urges the Supreme Court to grant certiorari. It further argues that there is a split between the Ninth Circuit and the Seventh Circuit, and that the Sony standard is ambiguous.

It states that the Ninth Circuit in the MGM v. Grokster reads the Sony case to require that the device be capable of substantial noninfrining uses. It states that the Seventh Circuit in the Aimster case held that for a product to avoid contributory liability under the Sony test, it must be more than merely capable of substantial noninfringing uses. There must be evidence of actual noninfringing uses.

It states that the split caused by the Grokster and Aimster cases "plagues important sectors of the economy with confusion and uncertainty."

It further states that "Copyright holders need practical protection from rampant infringement of their works, and software and equipment suppliers need predictable boundaries for the marketing of lawful products." However, it does not offer the Supreme Court an argument as to how it should resolve the ambiguity and provide certainty.

See also, amicus curiae brief [9 pages in PDF] of the Recording Artists Coalition (RAC) and of various individual rock and country music recording artists, dated November 8, 2004, and prepared by Thomas Corcoran, Jr. (Berliner Corcoran & Rowe).

And see, amicus curiae brief [26 pages in PDF] of various music industry associations, dated November 8, 2004, and prepared by Jon Baumgarten (Proskauer Rose) and Joel Katz (Greenberg Traurig). The amici who joined in this brief are the National Academy of Recording Arts and Sciences (NARASA), American Federation of Musicians of the United States and Canada, American Federation of Television and Radio Artists, The Country Music Association, Inc., The Gospel Music Association, The Hip-Hop Summit Action Network, Jazz Alliance International, Inc., and The Rhythm & Blues Foundation.

Other briefs in support of granting certiorari were filed on November 8, 2004.

Briefs in Opposition to Granting Certiorari. See, amicus curiae brief [32 pages in PDF] of the Computer and Communications Industry Association (CCIA) and Internet Archive, dated November 8, 2004. It was prepared by Peter Jaszi (American University) and Laura Quilter (UC Berkeley).

FRB Governor Reviews Role of IT in Economy

11/15. Federal Reserve Board Governor Mark Olson gave a speech in Toronto, Canada titled "Recent Economic Experience and Outlook" in which he discussed the role of information technology in economic activity.

Olson (at right) said that "the latter half of the 1990s was a time of remarkable economic performance, fueled importantly by an investment boom that contributed to rapid growth in labor productivity. However, by late 2000, that boom had come to an end, and businesses abruptly curtailed capital spending -- particularly for high-tech equipment. The cutback in spending occurred as expectations about the potential profitability of new investment opportunities turned down, and many companies, such as those in the telecommunications sector, found that they had invested too much in equipment and office space during the boom. With the sudden drop-off in business demand, inventories began to pile up, and producers cut production of all types of goods in early 2001."

Then, economic activity began to recover in 2002, in part because of "innovations in the use of existing technologies, perhaps the result of firms applying more effectively the new technologies they had acquired at a rapid pace in the late 1990s."

He also noted that "Business demand for high-tech equipment seems to have softened a little in recent months, judging both from the data on new orders and from industry commentary." He projected that "economic fundamentals are consistent with the U.S. economy posting solid growth over the next year."

People and Appointments

11/16. President Bush announced his intent to nominate Condi Rice, his current National Security Advisor, to be Secretary of State. If confirmed by the Senate, she will replace Colin Powell. President Bush announced his intent to make Steve Hadley his National Security Advisor. See, transcript of White House event.

11/16. The Senate Judiciary Committee held a hearing on the nominations of Thomas Griffith (to be a Judge of the U.S. Court of Appeals for the District of Columbia), Paul Crotty (Southern District of New York), and Michael Seabright (District of Hawaii). Sen. Orrin Hatch (R-UT), the Chairman of the Committee, praised Griffith in his prepared statement. Sen. Patrick Leahy (D-VT), the ranking Democrat, alleged that he practiced law without a license, and should not be confirmed by this Congress. See, statement.

More News

11/16. The Progress and Freedom Foundation (PFF) published a paper [17 pages in PDF] titled "Standardization in Digital Networks: The Case of 2G Mobile Phones". Andrew Russell wrote the paper. See also, PFF release.

Go to News from November 11-15, 2004.