|TLJ News from October 11-15, 2005|
Portman Discusses Trade Negotiations
10/14. Robert Portman, the U.S. Trade Representative (USTR) held a news conference regarding negotiations pertaining to the Doha Development Agenda.
He stated that "we have just returned from a busy week in Zurich and Geneva. There now appears to be more forward movement in the Doha negotiations than we have seen in months, and I’m encouraged by that."
He said that the recent U.S. proposal to break the deadline on agriculture "has generated a lot of momentum throughout this week. Our sense is that the negotiations have a new energy that was lacking before this new U.S. offer was introduced." See also, story titled "USTR Seeks to Break Doha Deadlock" in TLJ Daily E-Mail Alert No. 1,231, October 11, 2005.
However, he concluded, "We await a meaningful response."
Trade negotiators are working under a two month deadline. The World Trade Organization (WTO) will hold its Sixth WTO Ministerial Conference in Hong Kong on December 13-18, 2005. See, WTO notice.
See also, audio of news conference [WMA].
Pascal Lamy, Director General of the WTO, also issued a statement. He wrote metaphorically. "With developments this week I think the engines of the negotiation plane have been switched on again. This is no guarantee that the engines will be able to lift the plane to the necessary altitude to start the approximation to Hong Kong, since a lot of work remains, but at least the engines are buzzing."
See also, October 10 statement and October 13 statement by EC Trade Commissioner Peter Mandelson.
European Commission President Barroso will meet in Washington DC with President Bush on October 18. They are scheduled to discuss the Doha round. See, EC release. Barroso will also speak at the Johns Hopkins School of Advanced International Studies in Washington DC at 5:00 PM on October 18. See, notice.
FCC Sets Comment Deadlines for FNPRM Regarding Amending CALEA
10/14. The Federal Communications Commission (FCC) issued a public notice [2 pages in PDF] that sets the comment deadlines for the notice of proposed rulemaking (NPRM) portion of the Order and Further Notice of Proposed Rule Making that provides that facilities based broadband service providers and interconnected VOIP providers are subject to requirements under the 1994 Communications Assistance for Law Enforcement Act (CALEA).
The FCC adopted, but did not release, this item at its August 5, 2005, meeting. See, story titled "FCC Amends CALEA Statute" in TLJ Daily E-Mail Alert No. 1,191, August 9, 2005. The FCC released the text [59 pages in PDF] of this item on September 23, 2005. It is FCC 05-153 in ET Docket No. 04-295 and RM-10865
November 14, 2005, is the deadline for initial comments. December 12, 2005, is the deadline for reply comments. The public notice is DA 05-2712 in ET Docket No. 04-295. The FCC also published a notice in the Federal Register that describes and sets comments deadlines for this FNPRM. See, Federal Register, October 13, 2005, Vol. 70, No. 197, at Pages 59704 - 59710.
The FCC also published a notice in the Federal Register that describes, recites, and sets the effective date (November 14, 2005) for the rules changes adopted in the Order and FNPRM. See, Federal Register, October 13, 2005, Vol. 70, No. 197, at Pages 59664 - 59675.
People and Appointments
10/14. Kevin MacMillan was named Legislative Affairs Deputy Assistant Secretary for Banking and Finance at the Department of the Treasury. He was previously Senior Counsel to the House Financial Services Committee. See, Treasury release.
10/14. David Nason was named Deputy Assistant Secretary for Financial Institutions Policy at the Department of the Treasury. He previously worked for Securities & Exchange Commission (SEC) Commissioner Paul Atkins. See, Treasury release.
10/14. The Federal Communications Commission (FCC) adopted and released an order [36 pages in PDF] that makes available "approximately $211 million of targeted support from the Universal Service Fund (“USF”) for reconstruction and remediation relating to the restoration of telecommunications services." This order is FCC 05-178 in CC Docket No. 96-45, CC Docket No. 02-6, WC Docket No. 02-60, and WC Docket No. 03-109.
10/14. The U.S. Sentencing Commission (USSC) announced that it will hold a meeting on Wednesday, October 19, 2005, and that the agenda includes a "Vote on Emergency Amendment on Intellectual Property". The USSC's notice does not identify with specificity the subject matter of this item. However, at least two recently enacted statutes require action by the USSC. First, there is the Family Entertainment and Copyright Act of 2005 (FECA), which was S 167 and is now Public Law No. 109-9. The Senate approved this bill on February 1, 2005. See, story titled "Senate Approves Copyright Bill" in TLJ Daily E-Mail Alert No. 1,069, February 3, 2005. The House approved the bill on April 19, 2005. See, story titled "House Approves Copyright Bill" in TLJ Daily E-Mail Alert No. 1,119, April 20, 2005. Second, there is the Intellectual Property Protection and Courts Amendment Act of 2004, which was HR 3632 (108th Congress), and is now Public Law No. 108-482. This USSC meeting will be held at the Thurgood Marshall Federal Judiciary Building, One Columbus Circle, NE, Suite 2-500 (South Lobby).
DOJ Charges Samsung with DRAM Price Fixing
10/13. The Department of Justice (DOJ) charged Samsung by criminal Information filed in the U.S. District Court (NDCal) with fixing the prices of dynamic random access memory (DRAM) sold to original equipment manufacturers (OEMs), in violation of Section 1 of the Sherman Act, which is codified at 15 U.S.C. § 1.
Section 1 provides, in part, that "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine ..."
The action was brought by the DOJ's Antitrust Division. It charges Samsung Electronics Company Limited and its U.S. subsidiary, Samsung Semiconductor, Inc.
The DOJ also announced that Samsung agreed to plead guilty and pay a $300 Million fine. See, DOJ release.
See, full story.
FCC Files Brief with 9th Circuit in Brand X Case
10/13. The Federal Communications Commission (FCC) filed a letter brief [PDF] with the U.S. Court of Appeals (9thCir) in the Brand X case. It responds to the Court's inquiry to the parties regarding whether any issues remain outstanding.
The FCC wrote that "There is no need for further proceedings in this case" and that "the Court should dismiss or deny the petitions for review and enter judgment for the federal respondents in this case".
On June 27, 2005, the Supreme Court issued its opinion [59 pages in PDF] upholding the FCC's determination that cable broadband internet access service is an information service, reversing the judgment of the Court of Appeals, and overturning its 2003 opinion [39 pages in PDF]. See, story titled "Supreme Court Rules in Brand X Case" in TLJ Daily E-Mail Alert No. 1,163, June 28, 2005.
The FCC wrote in its letter brief that "In October 2003, this Court ruled that the FCC erred in failing to classify the transmission component of high-speed cable Internet access service (or "cable modem" service) as a telecommunications service. Brand X Internet Services v. FCC, 345 F.3d 1120 (9th Cir. 2003). After granting certiorari on this issue, the Supreme Court reversed this Court’s ruling in a decision rendered on June 27, 2005. National Cable & Telecommunications Ass’n v. Brand X Internet Services, 125 S. Ct. 2688 (2005). In that decision, the Court held that the FCC lawfully construed the Communications Act when the agency classified cable modem service as an ``information service´´ with no separate ``telecommunications service´´ component. The Supreme Court remanded the case “for further proceedings consistent with this opinion.´´"
People and Appointments
10/13. Anne Caliguiri joined the American Electronics Association (AEA) as Director of Communications in Washington DC. She previously worked for the Motion Picture Association of America (MPAA) in Los Angeles, California.
10/13. The U.S. Court of Appeals (9thCir) issued its opinion [10 pages in PDF] in In Re Grand Jury Subpoena to Nancy Bergeson. The Department of Justice (DOJ) subpoenaed Nancy Bergeson, a public defender, to testify before a grand jury against her client. She filed a complaint in U.S. District Court (DOre) seeking an order quashing the subpoena. The District Court, applying Rule 17(c)(2) of the Federal Rules of Criminal Procedure, held that the subpoena was "unreasonable and oppressive", and quashed it. The DOJ appealed. The Court of Appeals affirmed. But, the Court added, "We do not suggest that a subpoena of a lawyer to testify against her client before a grand jury would always be unreasonable or oppressive. The circumstances, such as the risk of imminent physical harm to others, magnitude of the case, scarcity of evidence -- all sorts of things that bear on reasonableness -- can legitimately be weighed along with the potential harm from enforcing the subpoena."
10/13. The U.S. District Court (DC) issued an opinion [PDF] in Hyatt v. Dudas, a Section 145 action. The plaintiff, Gilbert Hyatt, filed five patent applications in 1995 with the U.S. Patent and Trademark Office (USPTO) that pertain to an improved memory system for a computerized display system. The USPTO denied the applications. Hyatt filed a complaint in District Court pursuant to 35 U.S.C. § 145, which provides patent applicants the right to file a civil action against the Director of the USPTO. The parties filed cross motions for summary judgment. The District Court held that "Because this case is rife with material issues of fact, and because the administrative record has not been adequately developed, the Court will DENY the pending motions and REMAND the case to the PTO for further proceedings." This case is Gilbert Hyatt v. Jon Dudas, U.S. District Court for the District of Columbia, D.C. No. 03-108 (EGS), Judge Emmet Sullivan presiding.
Microsoft and Yahoo Announce Plans to Make IM Service Interoperable
10/12. Microsoft and Yahoo announced an agreement to make their instant messaging services interoperable and interconnected. See, Microsoft release and substantially identical Yahoo release. See also, transcript of joint news conference.
The two companies announced that their IM services, named MSN Messenger and Yahoo Messenger, will be interoperable and interconnected by the second quarter of 2006.
The agreement provides for exchanging instant messages, seeing their friends' online presence, sharing select emoticons, and adding new contacts from either service. The two companies will also enable PC to PC voice communications using their instant messaging services.
Steve Ballmer, CEO of Microsoft, stated that "IM interoperability is the right thing for our customers, our businesses and the industry as a whole". Terry Semel, CEO of Yahoo, stated that "This is truly a turning point for the IM industry, and we believe our agreement with Microsoft will help usher in a new era of IP communications."
The two companies entered into this agreement in the absence of any legal requirement to do so.
In January 2001, the Federal Communications Commission (FCC) did impose limited and temporary restrictions in its antitrust merger review (nominally a license transfer proceeding) of the merger of AOL and Time Warner. The FCC order approving the merger required that AOL's instant messaging (IM) services must interoperate with competing IM providers before it can offer videoconferencing and other streaming video over IM. However, this restraint only affected AOL Time Warner. See, TLJ story titled "FCC Approves AOL Time Warner Merger", and story titled "AOL Time Warner Merger" in TLJ Daily E-Mail Alert No. 100, January 12, 2001.
On April 2, 2003, AOL Time Warner submitted a petition [58 pages in PDF] to the FCC requesting relief from the FCC's January 22, 2001 Memorandum Opinion and Order (MOO) approving the merger of AOL and Time Warner. Specifically, AOL Time Warner sought relief from the condition restricting its ability to offer internet users streaming video advanced Instant Messaging based high speed services (AIHS) via AOL Time Warner broadband facilities. See, story titled "AOL Time Warner Petitions FCC for Relief From Instant Messaging Restriction" in TLJ Daily E-Mail Alert No. 638, April 7, 2003.
Then, on August 20, 2003, the FCC released a Memorandum Opinion and Order [13 pages in PDF] granting AOL Time Warner's petition to remove the FCC's restriction on its provision of video streaming advanced Instant Messaging based high speed services (AIHS). See, story titled "FCC Releases Order Permitting AOL Time Warner to Provide Advanced IM Services" in TLJ Daily E-Mail Alert No. 723, August 21, 2003.
Grand Jury Indicts Counterfeiters
10/12. A grand jury of the U.S. District Court (NDCal) returned two indictments that charge Ye Teng Wen (aka Michael Wen), Hao He (aka Kevin He), and Yaobin Zhai (aka Ben Zhai) with conspiracy to commit criminal copyright infringement and traffic in counterfeit labels, criminal copyright infringement, trafficking in counterfeit labels, and aiding and abetting, in connection with their replicating CDs containing copyrighted software and music.
The U.S. Attorneys Office (NDCal) stated in a release that "piracy conspiracies often involve geographically separate businesses that secretly handle different stages of the process of pirating intellectual property. Brokers, replicators, assemblers, packagers, printers, distributors and retailers play distinct roles in the conspiracy. Brokers solicit the orders of copyrighted works, while the replicators have the equipment to manufacture hundreds of thousands of CDs. Printers and packagers are responsible for making the infringed work appear legitimate by assembling the CD case, booklet, and artwork into a completed CD/DVD package that almost exactly resembles the copyrighted work."
The USAO continued that "The indicted individuals are charged with involvement in the large scale replication of pirated music and software. The replicator is the business or individual who has the manufacturing equipment to duplicate mass quantities of CDs or DVDs. Using expensive and sophisticated equipment, sometimes including silk screening machines to place artwork on the CDs or DVDs, replicators can quickly create tens of thousands of counterfeit CDs or DVDs. For example, a replicator armed with an easily obtainable mold of a CD or DVD - called a ``stamper´´ -- can potentially manufacture 50,000 to 80,000 counterfeit CDs or DVDs, effectively flooding the market with copies of the work."
The Recording Industry Association of America (RIAA) stated in a release that "More than 500,000 CDs and over one million CD inserts were seized, along with thousands of DVDs and 3,300 ``stampers´´ -- the metal discs used to press multiple copies, making this combined operation the largest manufacturing raid in U.S. history."
People and Appointments
10/12. Melanie Keller was named Chief Financial Officer of the Internet Corporation for Assigned Names and Numbers (ICANN). Komaki Takekoshi was named Accountant. Tess Llamas was named Financial Analyst. See, release.
10/12. The Progress and Freedom Foundation (PFF) released a paper [7 pages in PDF] titled "Improving Patent Quality: Inside Out, Outside In, or Upside Down?". Solveig Singleton is the author.
10/12. The Federal Communications Commission (FCC) released a Memorandum Opinion and Order [15 pages in PDF] in its proceeding titled "In the Matter of Rainbow DBS Company LLC, Assignor, and EchoStar Satellite L.L.C., Assignee, Consolidated Application for Consent to Assignment of Space Station and Earth Station Licenses, and related Special Temporary Authorization". The MOO grants the applications of Rainbow DBS Company and EchoStar Satellite for consent to assign from Rainbow DBS to EchoStar authority to operate a direct broadcast satellite space station at the 61.5º W.L. orbital location on 11 odd numbered channels from 1-21. This MOO is FCC 05-177 in IB Docket No. 05-72.
3rd Circuit Rules on Lending Tree's Web Use of Real Estate Brokers' Trademarks
10/11. The U.S. Court of Appeals (3rdCir) issued its divided opinion [91 pages in PDF] in Century 21 v. Lending Tree, a trademark infringement case involving the defense of nominative fair use. The Court of Appeals reversed the District Court's preliminary injunction, and sent the case back to District Court for further proceedings in light of Court of Appeals' instructions regarding nominative fair use determinations.
15 U.S.C. § 1115(b) provides, in part, that the registration of a mark "shall be conclusive evidence of the validity of the registered mark and of the registration of the mark, of the registrant’s ownership of the mark, and of the registrant’s exclusive right to use the registered mark in commerce. Such conclusive evidence shall relate to the exclusive right to use the mark on or in connection with the goods or services specified ..."
Then, § 1115(b)(4) provides it is a defense to infringement that "That the use of the name, term, or device charged to be an infringement is a use, otherwise than as a mark, ... of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party, or their geographic origin".
Nominative fair use, which is the issue in this case, involves use of another's protected mark to describe one's own product. The Court of Appeals noted, for example, that if a car mechanic publishes an ad that he repairs Volkswagens, he uses another's trademark, but it is nominative fair use.
The present opinion builds upon the December 8, 2004, opinion [15 pages in PDF] of the Supreme Court in KP Permanent Makeup v. Lasting Impressions. The Supreme Court held in that case that "a plaintiff claiming infringement of an incontestable mark must show likelihood of consumer confusion as part of the prima facie case, 15 U. S. C. § 1115(b), while the defendant has no independent burden to negate the likelihood of any confusion in raising the affirmative defense that a term is used descriptively, not as a mark, fairly, and in good faith".
See also, story titled "Supreme Court Rules on Fair Use in Trademark Case" in TLJ Daily E-Mail Alert No. 1,034, January 9, 2004. That opinion is also reported at 125 S.Ct. 542.
In the present case, the plaintiffs in the District Court, and the appellees in the Court of Appeals, are Century 21 Real Estate Corporation, Coldwell Banker Real Estate Corporation, and ERA Franchise Systems, Inc. They are real estate brokerage companies. The Court of Appeals opinion uses the acronym CCE to refer collectively to these three companies.
Real estate brokerage companies, and the National Association of Realtors (NAR), have a history of seeking to limit the availability of certain internet based services for home buyers and sellers.
For example, on September 8, 2005, the Department of Justice's (DOJ) Antitrust Division filed a civil complaint in U.S. District Court (NDIll) against the NAR alleging violation of federal antitrust laws in connection with its obstruction of real estate brokers who use internet tools to offer services to consumers. The DOJ has since filed an amended complaint.
See also, story titled "DOJ Sues National Association of Realtors for Obstructing Internet Based Brokers" in TLJ Daily E-Mail Alert No. 1,210, September 9, 2005; "GAO Reports on Real Estate Brokers and Use of the Internet" in TLJ Daily E-Mail Alert No. 1,224, September 29, 2005; and "DOJ Amends Complaint Against Realtors" in TLJ Daily E-Mail Alert No. 1,228, October 6, 2005.
The defendant and appellant in the present case is Lending Tree (LT), a "diversified consumer-oriented Internet business that helps consumers identify and select qualified lenders, real estate brokers, auto insurers, and other financial service companies."
The CCE companies have registered trademarks. LT used these marks in block letter form in its web site. For example, LT stated that it will "give you access to a national network of brokers representing the country's leading real estate companies, including Coldwell Banker, ERA and Century 21", and "LT is affiliated with more than 700 certified brokers such as Coldwell Banker, Century 21, Prudential, ERA and RE/MAX."
The CCE companies filed a complaint in U.S. District Court (DNJ) against LT alleging unfair competition and trademark infringement in violation of §§ 32 and 43(a) of the Lanham Act, which are codified at 15 U.S.C. §§ 1114(1) and 1125(a).
The District Court granted a preliminary injunction to the CCE companies. This interlocutory appeal followed.
The Court of Appeals reversed and remanded. The Court of Appeals did not rule on the ultimate question of whether there was nominative fair use. Rather, it provided detailed instructions to the District Court to apply in subsequent proceedings.
The Court of Appeals held that "we hold today that the Lapp test for likelihood of confusion still has an important place in a trademark infringement case in which the defendant asserts the nominative fair use defense. In this case, the test should focus on the four relevant factors: (1) the price of the goods and other factors indicative of the care and attention expected of consumers when making a purchase; (2) the length of time the defendant has used the mark without evidence of actual confusion; (3) the intent of the defendant in adopting the mark; and (4) the evidence of actual confusion." See, Interspace Corp. v. Lapp, Inc., 721 F.2d 460, 463 (3d Cir. 1983).
It continued that "Once plaintiff has met its burden of proving that confusion is likely, the burden then shifts to defendant to show that its nominative use of plaintiff’s marks is nonetheless fair. In this Circuit, we have today adopted a test for nominative fair use in which a court will pose three questions: (1) Is the use of the plaintiff’s mark necessary to describe both plaintiff's product or service and defendant’s product or service? (2) Is only so much of the plaintiff’s mark used as is necessary to describe plaintiff’s products or services? (3) Does the defendant’s conduct or language reflect the true and accurate relationship between plaintiff and defendant’s products or services? If each of these questions can be answered in the affirmative, the use will be considered a fair one, regardless of whether likelihood of confusion exists."
It concluded that "We adopt a bifurcated approach that tests for confusion and fairness in separate inquiries in order to distribute the burden of proof appropriately between the parties at each stage of the analysis. The defendant has no burden to show fairness until the plaintiff first shows confusion. Furthermore, by properly treating nominative fair use as an affirmative defense, our approach allows for the possibility that a district court could find a certain level of confusion, but still ultimately determine the use to be fair. By contrast, a unified likelihood of confusion test would require a defendant to negate likelihood of confusion by undercutting the Lapp factors. Because the Supreme Court explicitly rejected such a proposition in KP Permanent Make-Up, we decline to adopt it."
This case is Century 21 Real Estate Corporation, et al. v. Lending Tree, Inc., U.S. Court of Appeal for the 3rd Circuit, App. Ct. No. 03-4700, an appeal from the U.S. District Court for the District of New Jersey, D.C. No. 03-cv-02810, Judge Joseph Greenaway presiding. Judge Rendell wrote the opinion of the Court of Appeals, in which Judge Yohn joined. Judge Fisher wrote a dissent.
Microsoft and RealNetworks Settle
10/11. Microsoft and RealNetworks announced that they have settled their antitrust litigation in U.S. District Court, as well as other antitrust disputes. They also announced two agreements to collaborate on digital music and electronic games. See, Microsoft release and substantially identical RealNetworks release.
Bill Gates, Chief Software Engineer of Microsoft, and Rob Glasser, CEO of RealNetworks, and other senior executives of the two companies held a joint news conference on October 11 to discuss the settlement and agreements. See, transcript.
On December 18, 2003, RealNetworks filed a complaint in U.S. District Court (NDCal) against Microsoft alleging violation of federal and state antitrust laws. RealNetworks stated in a release at that time that Microsoft has "illegally used its monopoly power to restrict competition, limit consumer choice and attempt to monopolize the growing field of digital media". Microsoft responded in its own release that "this is a case where a leading firm is seeking to use the antitrust laws to protect and increase its marketplace share and to limit the competition it must face". Microsoft added that "These issues are a rehash of the same issues that have already been the subject of extensive litigation and a tough but fair resolution of the government antitrust lawsuit." See also, Microsoft's answer [31 pages in PDF].
This case is RealNetworks, Inc. v. Microsoft Corporation, U.S. District Court for the Northern District of California, D.C. No. C 03-5717 (JW) (EAI).
The companies' releases state that "The antitrust and technology assurance agreement resolves all antitrust disputes worldwide, based on a $460 million up-front cash payment to resolve all damages claims and a series of technology licenses and commitments under which Real will obtain long-term access to important Windows Media technologies that will enhance Real's media software solutions."
It elaborates that "Today's agreement includes a global settlement of all antitrust disputes, including the lawsuit brought by Real against Microsoft nearly two years ago in the United States and Real's participation in the proceedings initiated by the European Union and Korea. The agreement includes a variety of assurances regarding the design of the Windows operating system, including Windows Media Player, and access for Real to a broad range of Windows platform technologies. Among other things, Microsoft will provide Real expanded access and long-term licenses to a wide range of Windows Media and security technologies, that will enable Real to build services and software that enhance consumer's experience with Real's products and services and take advantage of innovations in Windows Vista."
The two companies also entered into an agreement regarding digital music technology and products, and an agreement pertaining to games.
The companies' releases state that "Under the music and games agreements, Microsoft is scheduled to pay Real $301 million in cash and provide services over 18 months in support of Real's product development, distribution, and promotional activities. Microsoft will earn credits at predetermined market rates to be applied to the $301 million for subscribers delivered to Real through MSN. Additionally, Real will take steps to support MSN Search, and Real and Microsoft will jointly promote use of Windows Media technologies with Rhapsody to Go."
Verizon Seeks Reversal in Texaco v. Dagher
10/11. The Supreme Court issued an order in Texaco v. Dagher that grants leave to file several amicus curiae briefs. The amici covered by this order are Verizon, American Bankers Association, Northwest Ohio Physician Specialist Cooperative, Parker Hannifin Corporation, Visa USA, American Petroleum Institute, and Washington Legal Foundation. See, Order List [19 pages in PDF], at page 3. See also, Supreme Court docket.
Verizon argues in its brief that the Court of Appeals decision under review threatens lawful and beneficial joint ventures in the telecommunications industry.
The Supreme Court has not yet scheduled oral argument. However, this case is not on the argument calendars for the sessions beginning October 3, October 31, or November 28. See, full story.
Supreme Court Denies Cert in 10b5 Class Action Against Merrill Lynch for Hyping Internet Stocks
10/11. The Supreme Court denied certiorari in John Lentell v. Merrill Lynch, a class action securities fraud case in which the District Court dismissed the complaint, and the Court of Appeals affirmed. See, Order List [19 pages in PDF], at page at 5. See also, Supreme Court docket.
This lets stand the January 20, 2005, opinion [45 pages in PDF] of the U.S. Court of Appeals (2ndCir).
The plaintiffs are John Lentell and others. They sought to represent a class of purchasers of stock in 24/7 Real Media, Inc. and Interliant, Inc. Merrill Lynch is a financial institution. Henry Blodget was a research analyst for Merrill Lynch who issued reports recommending that investors purchase stock in 24/7 and Interliant. Merrill Lynch was also a lead underwriter or co-lead underwriter for several securities offerings of 24/7 and Interliant.
The plaintiffs filed a complaint in U.S. District Court (SDNY) alleging Section 10b5 securities fraud. They asserted that Merrill Lynch both conducted market research and analysis, and underwrote public offerings of securities. They alleged that to attract investment banking business, it deliberately published market research that was falsely optimistic, and that this amounts to securities fraud.
The Court of Appeals affirmed the District Court's dismissal for failure to satisfy the pleading requirements of Section 10b5 and the PSLRA. It held that the complaint failed to plead loss causation.
See also, story titled "2nd Circuit Affirms Dismissal of 10b5 Complaint Against Merrill Lynch for Hyping Internet Stocks" in TLJ Daily E-Mail Alert No. 1,060, January 21, 2005.
The Supreme Court number is 05-24. This is a petition for writ of certiorari to the U.S. Court of Appeals for the 2nd Circuit, App. Ct. No. 03-7948, an appeal from the U.S. District Court for the Southern District of New York. Judge Dennis Jacobs wrote the opinion of the Court Court of Appeals, in which Judges Sotomayor and B.D. Parker joined.
Court Denies Cert Petition from Convicted Former Cisco Employee
10/11. The Supreme Court denied certiorari in Robert Gordon v. U.S., No. 04-1632. See, Order List [19 pages in PDF], at page at 17. See also, Supreme Court docket.
This is a criminal case from the U.S. District Court (NDCal) and the U.S. Court of Appeals (9thCir). This lets stand the judgment of the Court of Appeals. See, December 30, 2004 opinion [PDF].
The defendant is Robert Gordon, a former Cisco Systems employee, who was charged with wire fraud in violation of 18 U.S.C. § 1343. Gordon, who is a former Vice President and Director of Business Development, was charged with transferring stock owned by Cisco to himself, and to fraudulently inducing Cisco to provide $15 Million to Spanlink, a Cisco affiliated start-up company, so that he could fraudulently obtain $5 Million from Spanlink.
Gordon plead guilty. The District Court imposed an order for restitution in the amount of $27,397,206.84. He challenged the restitution order. The Court of Appeals affirmed in part, and reversed in part. However, it only reversed as to certain prejudgment interest.
Gordon is a graduate of Stanford Law School. He clerked for a Judge of the U.S. Court of Appeals (7thCir).
More Supreme Court News
10/11. The Supreme Court denied certiorari in Teva Pharmaceuticals v. Pfizer, a case involving patents, generic drugs, abbreviated new drug applications, and the Hatch Waxman Act. See, Order List [19 pages in PDF], at pages at 17-18. See also, Supreme Court docket. This is a petition for writ of certiorari to the U.S. Court of Appeals (FedCir), App. Ct. No. 04-1186. The three judge panel of the Court of Appeals issued its divided opinion [36 pages in PDF] on January 21, 2005. Judge Schall wrote the opinion of the Court, in which Judge Clevenger joined. Judge Mayer dissented. This opinion is also reported at 395 F.3d 1324. The Court of Appeals issued its order [20 pages in PDF], with a long dissent by Judges Gajarsa and Dyk, denying en banc rehearing, on April 4, 2005. See also, amicus curiae brief [15 pages in PDF] filed by the Federal Trade Commission (FTC) with the Court of Appeals in support of en banc rehearing. The Court of Appeals heard an appeal from the U.S. District Court (DMass).
10/11. The Supreme Court denied certiorari in Harry Keane v. Fox Television Stations, No. 05-202. See, Order List [19 pages in PDF], at page at 7. See also, Supreme Court docket. This is a petition for writ of certiorari to the U.S. Court of Appeals (5thCir). Keane asserted, without success, that Fox stole his idea for creating a television program titled "American Idol".
People and Appointments
10/11. Sherman Henderson, P/CEO of Lightyear Network Solutions, was elected Chairman of Comptel. Carl Grivner, CEO of XO Communications, was elected Vice Chairman, and Joe Ambersley, President of PAETEC South was reelected VCh/Tr. See, Comptel release.
10/11. Robert Portman, the U.S. Trade Representative (USTR), and Mike Johanns, the Secretary of Agriculture, held a news conference in Geneva, Switzerland, at which they discussed progress in the Doha round discussions. See, transcript.
10/11. The Office of the U.S. Trade Representative (USTR) stated in a release that U.S. and Malaysian officials met in Kuala Lumpur, Malaysia, on October 10. The USTR stated that the agenda included a variety of issues, including "strengthening the protection and enforcement of intellectual property rights, upgrading customs procedures, and addressing investment concerns."
10/11. The Government Accountability Office (GAO) released its report [50 pages in PDF] titled "Chief Information Officers: Responsibilities and Information and Technology Governance at Leading Private-Sector Companies".
10/11. The Government Accountability Office (GAO) released its report [32 pages in PDF] titled "Electronic Rulemaking: Progress Made in Developing Centralized E-Rulemaking System".
10/11. The Government Accountability Office (GAO) released its report [36 pages in PDF] titled "Information Security: The Defense Logistics Agency Needs to Fully Implement Its Security Program".
Go to News from October 6-10, 2005.