|TLJ News from October 16-20, 2005|
Senate Commerce Committee Approves DTV Bill
10/20. The Senate Commerce Committee (SCC) amended and approved the "Digital Transition and Public Safety Act of 2005". The final vote was 19-3. See, SCC release. Also, the House Commerce Committee announced that it will mark up its version of a DTV transition bill during the week of October 24. See, HCC notice.
The SCC's bill language [PDF] sets a date of April 7, 2009 for the return of television broadcasters' 24 megahertz of spectrum in 700 MHz band now being used for analog broadcasting. The spectrum would be made available for public safety uses and advanced wireless services.
Sen. John McCain (R-AZ) offered an amendment that would have moved up this deadline to April 7, 2007. He said that this issue pits the National Association of Broadcasters (NAB) against the first responders, and that first responders need an earlier deadline. He amendment failed on a roll call vote of 5-17.
See, full story.
Senate Commerce Committee Approves WARN Act
10/20. The Senate Commerce Committee amended and approved S 1753, the "Warning, Alert, and Response Network Act", by motion, without objection.
Sen. Jim DeMint (R-SC) and others introduced this bill on September 22, 2005. The version of the bill approved by the SCC [57 pages in PDF] is substantially different from the bill as introduced.
This bill would create a new government program titled the "National Alert System". Administrative and rule making authority would be given to a new National Alert Office within the National Oceanic and Atmospheric Administration (NOAA), and the Federal Communications Commission (FCC).
The bill provides that funding for program "shall be provided from the Digital Transition and Public Safety Fund in accordance with section 5 of the Digital Transition and Public Safety Act of 2005." The bill as introduced had provided for funding through the authorization of the appropriation of $250 Million for Fiscal Year 2006.
The bill states that this program will "provide a public communications system capable of alerting the public on a national, regional, or local basis to emergency situations requiring a public response."
The bill further states that this program "shall incorporate multiple communications technologies and be designed to adapt to, and incorporate, future technologies for communicating directly with the public".
It adds that this program "will transmit alerts across the greatest possible variety of communications technologies, including digital and analog broadcasts, cable and satellite television, satellite and terrestrial radio, wireless communications, wireline communications, and the Internet to reach the largest portion of the affected population." The bill as introduced did not reference the internet, or internet protocol services.
The bill as approved by the Committee also deleted a provision that had been in the original bill that would have given power to the FCC to mandate disclosures to subscribers of mobile services that do not participate in the National Alert System.
The FCC has asserted, and exercised, similar authority in the context of E911 and VOIP communications, and therefor been criticized by some in the technology sector.
There was little discussion or debate at the October 20 mark up session. Sen. DeMint briefly explained the bill. Sen. Ben Nelson (D-NE), a cosponsor, expressed support. Sen. DeMint offered his manager's amendment. No one expressed opposition or criticism. There was no recorded vote. See also, DeMint release.
Senate Commerce Committee Approves Prepackaged News Story Bill
10/20. The Senate Commerce Committee (SCC) amended and approved S 967, the "Truth in Broadcasting Act of 2005". See, version of bill approved by the SCC [PDF], and SCC release.
This bill provides that "Any prepackaged news story produced by or on behalf of a Federal agency and intended for broadcast over the air or distribution by a multichannel video programming distributor within the United States shall contain a clear notification within the text or audio of the prepackaged news story that the pre- packaged news story was prepared or funded by the ‘United States Government’."
Currently, 47 U.S.C. § 317 pertains to "Announcement of payment for broadcast", while 47 U.S.C. § 508 pertains to "Disclosure of payments to individuals connected with broadcasts". S 967 would cover federal agency prepackaged news stories in the absence of payments.
The bill defines "prepackaged news story" as "a complete, ready-to-use audio or video news segment designed to be indistinguishable from a news segment produced by an independent news organization."
The bill, as amended, further provides that "Nothing in this section shall be construed to apply to any lawful and authorized intelligence activity of the United States government".
Sen. Frank Lautenberg (D-NJ) introduced this bill on April 28, 2005. The SCC held a hearing on May 12, 2005. See, story titled "Senate Commerce Committee to Hold Hearing on Law Respecting Prepackaged News Stories" in TLJ Daily E-Mail Alert No. 1,130, May 6, 2005.
There was little debate or discussion of this bill at the October 20, 2005 mark up. Sen. Lautenberg has published a web page titled "A History of Propaganda / Prepackaged News by the Bush Administration".
On April 13, 2005, the Federal Communications Commission (FCC) released a document [10 pages in PDF] titled "Public Notice" in which it stated that it has received communications regarding video news releases (VNRs). It further stated that it has authority, pursuant to 47 U.S.C. §§ 317 and 508 and 47 C.F.R. §§ 73.1212 and 76.1615, to instruct its licensees and operators that "whenever broadcast stations and cable operators air VNRs, licensees and operators generally must clearly disclose to members of their audiences the nature, source and sponsorship of the material that they are viewing."
In addition, on February 17, 2005, the Government Accountability Office (GAO) wrote a memorandum [3 pages in PDF] to the heads of executive branch departments and agencies. This memorandum describes the practice of preparing prepackaged news stories, and instructs executive branch officials that "While agencies generally have the right to disseminate information about their policies and activities, agencies may not use appropriated funds to produce or distribute prepackaged news stories intended to be viewed by television audiences that conceal or do not clearly identify for the television viewing audience that the agency was the source of those materials."
The GAO is an arm of the Congress. It has no authority to instruct executive branch officials.
The Executive Office of the President's (OEP) Office of Management and Budget (OMB) distributed a memorandum [PDF] in response on March 11, 2005. It attaches a memorandum from the Department of Justice's (DOJ) Office of Legal Counsel (OLC), which states that "Executive Branch agencies are not bound by GAO's legal advice".
International Publishers Association Criticizes Google's Scanning of Library Collections
10/20. The International Publishers Association (IPA) and PEN USA issued a Joint Declaration [PDF] that criticizes Google, on copyright grounds, for its Google Print Library Project.
The declaration states that "The IPA and PEN USA are alarmed about the deliberate and continued disregard of the interests and concerns that they and their members have repeatedly raised with Google regarding the operation of the Google Print Library Project."
Google has already been sued in two actions brought by the Authors Guild and by a group of five book publishing companies. For further background on this program, see, story titled "Google, Publishers and Authors Debate Google's Print for Libraries Program" in TLJ Daily E-Mail Alert No. 1,239, October 25, 2005.
The declaration states that "The digitisation of an entire work is an act which requires authorization by the author, or the publisher whichever owns or controls the relevant rights. It remains the unassailable, inalienable fundamental right of the author to decide whether -- and if so, to what extent -- someone should digitise, index and make their works available through search engines and the Internet, and to decide whether the additional exposure and availability through the Internet is sufficient consideration, or not."
Second, it states that "The act of first digitisation, like virtually no other act of copying, is a highly significant step that enables with great ease onward copying, distribution and making available. It does not matter whether Google's stated present plans are limited. The mere existence of an (unauthorised) digital copy of a copyrighted work put the author's ability to control the further use of her or his works at risk."
Third, it states that "Requiring authors or publishers to search and enquire whether potentially thousands of organisations are using their work, and to object to each such use, does in practice destroy their fundamental right to determine the way their works are exploited. ``Opting out´´ of the Google Print Library programme amounts to an unreasonable burden, and as a practical matter destroys the essence of reproduction right and of copyright generally."
The IPA and PEN USA conclude that "Google should digitise works only once permission has been granted by the rightsholding creator, i.e., either the author or the publisher; Google should respect that silence does not amount to authorisation.
FCC Files Brief in Challenge to Unbundling Order
10/20. The Federal Communications Commission (FCC) filed its brief [93 pages in PDF] with the U.S. Court of Appeals (DCCir) in Covad v. FCC, a challenge to the FCC's order that, among other things, ends mandatory unbundling of mass market switching.
This case concerns the FCC's Order on Remand [185 pages in PDF] in its proceeding titled "In the Matter of Unbundled Access to Network Elements Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers". With this order, the FCC once again set rules regarding the unbundling requirements of ILECs, pursuant to 47 U.S.C. § 251. The previous three were overturned in part by the federal courts.
The FCC adopted, but did not release, this order at its December 15, 2004 meeting. See, story titled "FCC Adopts Unbundling Order" in TLJ Daily E-Mail Alert No. 1,039, December 16, 2004, and story titled "Reaction to FCC Unbundling Order" in TLJ Daily E-Mail Alert No. 1,041, December 20, 2005.
The FCC released the text of this order on February 4, 2005. See, story titled "FCC Releases Unbundling Order" in TLJ Daily E-Mail Alert No. 1,071, February 7, 2005.
This order is FCC 04-290 in WC Docket No. 04-313 and CC Docket No. 01-338.
This case is Covad Communications, Inc., et al. v. FCC and USA, and consolidated cases, U.S. Court of Appeals for the District of Columbia, Nos. 05-1095 etc., petitions for review of a final order of the FCC.
District Court Orders Interior Department to Disconnect Certain Computers
10/20. The U.S. District Court (DC) issued an order [8 pages in PDF] and opinion [205 pages in PDF] in which it held that the Department of the Interior "has insufficient computer security to adequately safeguard the electronically stored Individual Indian Trust Data of which it is a custodian", and therefore must disconnect all affected computers. However, on October 21, the U.S. Court of Appeals (DCCir) issued an order that stays the order of the District Court
The District Court granted a preliminary injunction that
requires that the DOI "forthwith shall disconnect all Information Technology
Systems that House or provide Access to Individual Indian Trust Data:
1. from the Internet;
2. from all intranet connections, including but not limited to the VPX, ESN, or any other connection to any other Interior bureau or office;
3. from all other Information Technology Systems; and
4. from any contractors, Tribes, or other third parties."
The District Court case is Elouise Cobbell, et al. v. Gale Norton, U.S. District Court for the District of Columbia, D.C. No. 96-1285 (RCL), Judge Royce Lamberth presiding.
The Department of the Interior promptly filed an emergency motion for stay with the Court of Appeals. It wrote that the District Court's order to disconnect its computers "will result in substantial harm to the general public", but that it has "not yet been able to compile declarations confirming the harms". This case has been ongoing for almost ten years.
On Friday, October 21, the Court of Appeals issued a per curium order, the entire substance of which is as follows: "ORDERED that the district court's order filed October 20, 2005, granting appellee's motion for a preliminary injunction, be stayed pending further order of the court. The purpose of this administrative stay is to give the court sufficient opportunity to consider the merits of the appellants' full motion for stay, which shall be filed on or before October 27, 2005. See D.C. Circuit Handbook of Practice and Internal Procedures 32-33 (2002)."
The Court of Appeals case is No. 05-5388. Judges Henderson, Randolph and Brown comprise the three judge panel.
People and Appointments
10/20. Federal Communications Commission (FCC) Chairman Kevin Martin named Heather Dixon to be his Legal Advisor for Media Issues. She was an Attorney Advisor in the FCC's Media Bureau. She will replace Catherine Bohigian. See, FCC release [PDF].
10/20. Catherine Bohigian (at left) was named acting Chief of the Federal Communications Commission's (FCC) Office of Strategic Planning and Policy Analysis. She was previously Chairman Kevin Martin's Senior Legal Advisor. Martin, Dixon, and Bohigian all previously worked for the law firm of Wiley Rein & Fielding.
10/20. The National Association of Broadcasters (NAB) picked David Rehr to be its next President and CEO. He will begin on December 5, 2005. He will replace the current P/CEO, Eddie Fritts, who will remain as a consultant through 2008. Rehr is currently President of the National Beer Wholesalers Association. See, NAB release.
10/20. Comcast Cable announced that David Scott will be appointed Executive Vice President, Finance and Administration. He will replace Michael Tallent, who is retiring. See, Comcast release.
10/20. The Department of Commerce's (DOC) Technology Administration announced that Monday, November 21, 2005, is the deadline to submit nominations for its 2006 Commerce Science and Technology Fellowship (ComSci) Program. Only full time career federal employees in a professional or management series at the GS/GM-13 level or above are eligible. See, notice.
10/20. Jonathan Adelstein, a Commissioner of the Federal Communications Commission (FCC), gave a speech [4 pages in PDF] in which he discussed the 3G band plan, tower citing, and Hurricanes.
10/20. Mike Gallagher, head of the National Telecommunications and Information Administration (NTIA), gave a speech titled "The Merger of Telecom and IT: U.S. Innovation Driving Economic Growth". See, presentation slides.
Major Book Publishers Sue Google for Digitizing Copyrighted Books
10/19. Five book publishing companies filed a complaint [35 pages in PDF] in U.S. District Court (SDNY) against Google alleging that its Google Print Library Project infringes copyrights. The plaintiffs are McGraw Hill, Pearson Education, Penguin, Simon & Schuster, and John Wiley & Sons. All are members of the Association of American Publishers (AAP). See, full story.
Senate Judiciary Committee Considers Bloggers and Reporters' Privilege Legislation
10/19. The Senate Judiciary Committee (SJC) held a hearing titled "Reporters' Privilege Legislation: An Additional Investigation of Issues and Implications". While the motivation for holding this hearing was recent abuses of subpoena power to obtain testimony from reporters for the New York Times and others publications, the discussion also focused on to what extent any statutory protection would affect cyber reporters and bloggers.
Sen. John Cornyn (R-TX) wrote in his opening statement that "We also need to have a serious discussion of what constitutes the term ``reporter.´´ Media consumers no longer rely exclusively on traditional media outlets to obtain information. Today’s technology allows for anyone to report information to a vast audience virtually instantaneously, thus creating a new generation of ``cyber reporters´´ or those we know today as bloggers."
He added that bloggers may be the "modern day equivalent of the revolutionary pamphleteer who passed out news bulletins on the street corner." However, "the relative anonymity afforded to bloggers, coupled with a certain lack of accountability, as they are not your traditional brick-and-mortar reporters who answer to an editor or publisher, also has the risk of creating a certain irresponsibility when it comes to accurately reporting information."
He concluded that "it is also important to consider whether bloggers, or reporters for entities such as al Jazeera, or others whose associations perhaps are questionable or even cause for concern, ought to be covered under this type of law."
Sen. Patrick Leahy (D-VT) wrote in his opening statement that "Efforts have been made from time to time to codify a reporters’ privilege in federal law, but these attempts failed, in part because supporters of the concept found it difficult to agree on how to define the scope of what it means to be a ``journalist.´´ With bloggers now participating fully in the 24-hour news cycle, we might face similar challenges in defining terms today."
See also, prepared testimony of Chuck Rosenberg (U.S. Attorney for the Southern District of Texas), prepared testimony of Judith Miller (The New York Times), prepared testimony of David Westin (President of ABC News), prepared testimony of Joseph diGenova (diGenova & Toensing), prepared testimony of Anne Gordon (Managing Editor of the Philadelphia Inquirer), and prepared testimony of Dale Davenport (Editorial Page Editor of the The Patriot-News of Harrisburg, Pennsylvania).
On July 18, 2005, Sen. Richard Lugar (R-IN) and others introduced S 1419, the "Free Flow of Information Act of 2005", a bill to limit the compelled disclosure of information by certain persons.
It provides that "A Federal entity may not compel a covered person to testify
or produce any document in any proceeding or in connection with any issue
arising under Federal law unless a court determines by clear and convincing
evidence, after providing notice and an opportunity to be heard to the covered
(1) that the party seeking to compel production of such testimony or document has unsuccessfully attempted to obtain such testimony or document from all persons from which such testimony or document could reasonably be obtained other than a covered person;
(2) that -- (A) in a criminal investigation or prosecution, based on information obtained from a person other than a covered person -- (i) there are reasonable grounds to believe that a crime has occurred; and (ii) the testimony or document sought is essential to the investigation, prosecution, or defense; or (B) in a matter other than a criminal investigation or prosecution, based on information obtained from a person other than a covered person, the testimony or document sought is essential to a dispositive issue of substantial importance to that matter; and
(3) in any matter in which the testimony or document sought could reveal the identity of a source of information or include any information that could reasonably be expected to lead to the discovery of the identity of such a source, that -- (A) disclosure of the identity of such a source is necessary to prevent imminent and actual harm to national security; (B) compelled disclosure of the identity of such a source would prevent such harm; and (C) the harm sought to be redressed by requiring disclosure clearly outweighs the public interest in protecting the free flow of information."
The bill further provides that a "covered person" includes "an entity that disseminates information by print, broadcast, cable, satellite, mechanical, photographic, electronic, or other means and that -- (i) publishes a newspaper, book, magazine, or other periodical in print or electronic form; (ii) operates a radio or television broadcast station (or network of such stations), cable system, or satellite carrier, or a channel or programming service for any such station, network, system, or carrier; or (iii) operates a news agency or wire service;"
Chuck Rosenberg complained at the October 19 hearing, on behalf of the Department of Justice, that "the definition arguably could include any person who sets up an Internet blog".
The Congress has often enacted legislation that categories institutional media, and offers some promotion, benefit or immunity, often for the stated purpose of implementing protections guaranteed by the First Amendment. See, for example, the Americans With Disabilities Act (ADA) and the Federal Election Campaign Act (FECA). There is also the Communications Act, the underlying purpose of which is to categorize, license, and regulate communications, which is another word for speech.
In contrast, the Supreme Court has generally adhered to the principle that any categorization of institutional media is itself contrary to the First Amendment. Although, the Court has carved out an exception for FCC regulated communications; see, NBC v. US, 319 U.S. 190 (1943) and Red Lion v. FCC, 395 U.S. 367 (1969).
Rotunda and Nowak sum up the Supreme Court's general interpretation. "The Court has refused to draw any constitutional distinction between speech and ``the press,´´ or between speech and the ``institutional press,´´ or between speech and the ``organized media.´´ The reason for the judicial unwillingness to make such a differentiation lies, in part, in the fact that there is no principled way of doing so." See, Ronald Rotunda and John Nowak, Treatise on Constitutional Law, 2nd ed., at vol. 4, pages 112-113, ¶ 20.19.
See also, the concurring opinion of former Chief Justice Warren Burger in FNB v. Bellotti, which is reported at 435 U.S. 765 (1978). He wrote that "The very task of including some entities within the ``institutional press´´ while excluding others, whether undertaken by legislature, court, or administrative agency, is reminiscent of the abhorred licensing system of Tudor and Stuart England -- a system the First Amendment was intended to ban from this country."
"Because the First Amendment was meant to guarantee freedom to express and communicate ideas, I can see no difference between the right of those who seek to disseminate ideas by way of a newspaper and those who give lectures or speeches and seek to enlarge the audience by publication and wide dissemination", wrote Burger. "In short, the First Amendment does not ``belong´´ to any definable category of persons or entities: It belongs to all who exercise its freedoms."
And see, the 1972 opinion of the Supreme Court in Branzburg v. Hayes, which is reported at 408 U.S. 665. The Court wrote that "Freedom of the press is a `fundamental personal right´ which `is not confined to newspapers and periodicals. It necessarily embraces pamphlets and leaflets. ... The press in its historic connotation comprehends every sort of publication which affords a vehicle of information and opinion.´ ... The informative function asserted by representatives of the organized press ... is also performed by lecturers, political pollsters, novelists, academic researchers, and dramatists. Almost any author may quite accurately assert that he is contributing to the flow of information to the public ..."
People and Appointments
10/19. Matt Niemeyer was named Counselor at the Office of the U.S. Trade Representative (USTR). He is currently Assistant USTR for Congressional Affairs. In this capacity he worked to secure Congressional approval of the free trade agreements (FTAs) with Central American nations and the Dominican Republic, Australia, Chile, Morocco and Singapore. He previously worked for the American Israel Public Affairs Committee (AIPAC), the Independent Insurance Agents of America, former Rep. Gerald Solomon (R-NY), the National Republican Congressional Committee, and Sen. John McCain (R-AZ). See, USTR release.
10/19. James Mendenhall was named General Counsel at the Office of the U.S. Trade Representative (USTR). He has been the acting General Counsel since February of 2005. Before that, he was Assistant USTR for Services, Investment, and Intellectual Property. He worked on the intellectual property rights provisions of FTAs and the Doha round. He has worked for the USTR since 2001. Before that, he was a partner in the law firm of Powell Goldstein Fraser & Murphy. See, USTR release.
10/19. Justin McCarthy was named Assistant USTR for Intergovernmental Affairs and Public Liaison. He is a new hire at the USTR. He previously was Director of Government Relations for Pfizer. Before joining Pfizer in 2001, he was Legislative Director for Mayer Brown & Platt's international trade practice. And before that, he worked for former Rep. Thomas Ewing (R-IL). See, USTR release.
10/19. The Senate Commerce Committee announced the postponement of its mark up of S 1063, the "IP-Enabled Voice Communications and Public Safety Act of 2005", to Wednesday, November 2, 2005. The SCC will hold a mark up session on October 20, 2005, at 2:00 PM to mark up S __, a DTV bill, S 1753, the "Warning, Alert, and Response Network Act", and S 967, the "Truth in Broadcasting Act of 2005".
10/19. Sen. Ted Stevens (R-AK), the Chairman of the Senate Commerce Committee (SCC), gave a speech in Washington DC on legislation relating to a transition to digital television (DTV), and the SCC's mark up session scheduled for October 20.
SEC Chairman Cox Speaks in Beijing
10/18. Chris Cox, Chairman of the Securities and Exchange Commission (SEC) gave a speech in Beijing, People's Republic of China. He discussed, among other topics, the advantages for Chinese tech companies of listing on U.S. exchanges, Lenovo's purchase of IBM's laptop business, foreign investment in the U.S., and the need in China for shareholder democracy, a free flow of information, and government transparency in China.
Cox (at right) said that "Chinese technology companies, in particular, will benefit from listing on U.S. exchanges that focus on technology issues. This will expose them to a remarkably broad range of expert research coverage, and bring their game up to a different level."
He also discussed foreign investment in the U.S. He said, "Let me state emphatically that we welcome foreign investment in America. That's why China's Lenovo Group now owns IBM's personal computer business."
He continued that "I needn't remind you of the opposition that partially state-owned Deutsche Telekom received in the U.S. Senate only a few years back when it sought to buy U.S. long-distance giant Sprint, and mobile telephone company Voicestream.
"And when the French government-controlled Thomson-CSF tried to snap up LTV's missile unit, opposition came from the Pentagon, Congress, and the media on national security grounds-even though France is a member of NATO and even though LTV was in Chapter 11", said Cox. "The list goes on. This is not a China problem, but rather a question of genuine market actors versus state-controlled entities."
Cox also advocated "shareholder democracy". He argued that "Markets function best if the participants have market motives. And the existence of shareholder democracy helps insure that this is so. In China's case, the best way to address this problem is head-on. We have to acknowledge that government control is an impediment to genuine shareholder democracy. And without shareholder democracy, China will be missing one of the key ingredients for a successful capital market."
He continued that "The second ingredient of efficient capital markets -- access to material information -- is closely related to shareholder democracy. Investors need as much information as possible about the firms in which they invest."
Cox elaborated about the PR China's lack of transparency, and restrictions on information about the government. He said that "In China's case, its broadly applied limitations on access to information in the media serve to amplify these concerns. Perhaps no other single issue puts such a serious crimp in the ability to do business with China. Restrictions on news and information-including information about the very government that controls the companies in which investors are being asked to put their money-obstruct the transparency that investors and efficient markets demand."
He added that in "Today's highly competitive global capital markets require that information travel freely and instantaneously. Any restrictions on access to information-in the press, in the electronic media, and on the Internet-are a serious obstacle to our shared mission of investor protection."
Cox did not discuss the lack of transparency at U.S. regulatory agencies. However, he did state that "We've got to work together to address this challenge, lest we all find ourselves facing the same destiny as the Qing." The Qing dynasty fell in 1912.
See also, Cox's speech in Hebei, PR China, on October 16, 2005.
4th Circuit Denies Rehearing in Hatfill v. NYT Defamation Case in 6-6 Vote
10/18. The U.S. Court of Appeals (4thCir) denied rehearing en banc in Hatfill v. New York Times, a defamation case. It was 6-6 vote. See, order and dissent [16 pages in PDF].
The plaintiff is Steven Hatfill, a research scientist and germ warfare specialist. He was investigated by the Federal Bureau of Investigation (FBI) in connection with the mailing of letters containing anthrax spores in the fall of 2001. He has not been prosecuted. No one has.
The original defendants were the New York Times (NYT), a daily newspaper and web site, and Nicholas Kristoff, a reporter employed by the NYT. Kristoff wrote on numerous occasions about the 2001 anthrax mailings, and the FBI's investigation. Hatfill asserts that this defamed him.
Hatfill filed a complaint in U.S. District Court (EDVa) against the NYT and Kristoff alleging defamation and intentional infliction of emotional distress, under Virginia state law. Hatfill dismissed the claims against Kristoff, on the basis that the court lacks personal jurisdiction over him.
The District Court dismissed the claims against the NYT for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Hatfill appealed.
The Court of Appeals reversed on July 28, 2005. Judge Dennis Shedd wrote the opinion [25 pages in PDF] for the majority. He quoted extensively from Kristoff's pieces in the NYT, and concluded that the complaint adequately alleges claims for defamation and intentional infliction of emotional distress, based upon the courts construction of the Kristoff pieces.
Judge Niemeyer wrote a dissent. He argued that Kristoff criticized the FBI's handling of the investigation of Hatfill, and that Kristoff argued that the FBI should have been pursuing certain leads regarding Hatfill, but that Kristoff never accused Hatfill of sending the anthrax, or committing a crime. Niemeyer would have affirmed the District Court's dismissal.
This opinion is reported at 416 F.3d 320. See also, story titled "4th Circuit Reinstates Hatfill's Defamation Suit Against NYT" in TLJ Daily E-Mail Alert No. 1,185, August 1, 2005.
The NYT petitioned for rehearing, or rehearing en banc. The Court of Appeals voted 6-6. Hence, the petition is denied.
Judge Wilkinson again wrote a lengthy dissent. He wrote that the NYT "was simply doing its job".
He focused on the nature and limitations of government agencies and bureaucracies, and the function that reporting plays in exposing and commenting on government action, and inaction. He wrote that "The consequences of this decision for the First Amendment run deep. If one purpose of public commentary is to assess the functioning of government, these columns were surely in that vein."
"Bureaucracies have been known to be both sluggish and inept, and it is not only the prerogative, but the duty, of news organizations to insist that those agencies get off the dime", said Wilkinson. "The perils of inaction and of overzealous action on the part of law enforcement are alike proper subjects for a free press. In fact, if there is any area that merits public scrutiny, it would seem to be the workings of our criminal justice system. Both in its investigative and judicial aspects, that system is capable of serious malfunction."
He asked rhetorically, "who else will do the job of calling bureaucratic judgments to account".
He concluded that "The panel’s decision in this case will restrict speech on a matter of vital public concern. The columns at issue urged government action on a question of grave national import and life-or-death consequence. It is unclear, to say the least, that Virginia law would ever find these columns to be defamatory, and the panel pushes state law in a direction that not only portends liability for valuable public commentary but aggravates, rather than alleviates, the constitutional tensions inherent in the defamation field."
Judges Michael and King joined in the dissent. Judges Niemeyer, Motz and Gregory also voted for rehearing, but did not join in the dissenting opinion. Judges Wilkins, Widener, Luttig, Traxler, Shedd, and Duncan voted to deny the petition for rehearing.
This case is Steven Hatfill v. The New York Times Company and Nicholas Kristoff, U.S. Court of Appeals for the 4th Circuit, App. Ct. No. 04-2561, an appeal from the U.S. District Court for the Eastern District of Virginia, D.C. No. CA-04-807-A, Judge Claude Hilton presiding.
Federal Circuit Rules on Exclusive Licensee's Standing to Sue for Infringement
10/18. The U.S. Court of Appeals (FedCir) issued its opinion [PDF] in Sicom v. Agilent, a patent case involving when patent licensing or assigning agreements give the licensee/assignee standing to bring an action for infringement of the patent. The Court of Appeals affirmed the District Court's dismissal for lack of standing.
The patent in suit is U.S. Patent No. 5,333,147 titled "Automatic monitoring of digital communication channel conditions using eye patterns". Sicom is the plaintiff.
Sicom acquired its interest in this patent from the nation of Canada, which is not a party to this action. The Court of Appeals recited the facts regarding Sicom's agreement with Canada. "Canada granted Sicom a license of the ’147 patent under the Agreement. Sicom is a ``sole´´ licensee, which the Agreement defines as having ``the right to be the only licensee´´ of the patent. However, Canada has reserved for itself the right to continue operating under the patented technology, as well as a multitude of other rights, including: the right to veto Sicom's reassignment of its rights or proposed sublicenses; the right to levy additional royalties or other consideration; the right to grant contracts and sub-contracts to further develop the invention claimed in the patent; and the right to offer sublicenses under any improvements or corrections developed by Sicom. ... Canada also retained the right to sue for infringement other than commercial infringement and it retained legal title to the patent. ... Although Sicom does have an exclusive right to sue for commercial infringement under the Agreement and the Amendment ..."
Sicom filed a complaint in U.S. District Court (DDel) against Agilent Technologies and others alleging patent infringement.
The District Court's dismissed the complaint on the grounds that Sicom was not the owner of the patent, the licensor of the patent, or the holder of all substantial rights of the patent, and therefore did not qualify as an effective patentee, and lacked standing under the Patent Act to sue for infringement
Sicom appealed. The Court of Appeals affirmed.
It wrote that "A nonexclusive license confers no constitutional standing on the licensee to bring suit or even to join a suit with the patentee because a nonexclusive licensee suffers no legal injury from infringement." However, "While a licensee normally does not have standing to sue without the joinder of the patentee (to prevent multiplicity of litigation), an exclusive license may be treated like an assignment for purposes of creating standing if it conveys to the licensee all substantial rights." (Parentheses in original.)
This Court of Appeals continued that "all substantial rights" are those rights sufficient for the licensee or assignee to be deemed the effective patentee under 35 U.S.C. § 281. It elaborated that each license and assignment is unique, and therefore, the Court must ascertain the intention of the parties and examine the substance of what the licensing agreement granted to determine if it conveys all of the substantial rights in the patent and is sufficient to grant standing to the licensee.
The Court of Appeals then applied these principles to the facts regarding the agreement between Sicom and Canada. "In this case, we must assess the Agreement at issue, weighing the rights in the patent transferred to Sicom against those retained by Canada, to determine whether Canada assigned all substantial rights in the patent, or fewer than all such rights."
It concluded that Canada did not assign all substantial rights. It found it significant that Canada reserved the right to sue for infringement other than commercial infringement. It added that "We find unpersuasive Sicom's response that it is not suing Appellees' customers, nor suing for non-commercial infringement, and that this court should not consider risks that are outside the scope of the facts in this case."
The Court added that "we find that Sicom, in other respects as well, has failed to show that it has all substantial rights under the patent. For instance, Sicom does not have the right to settle litigation without the prior written consent from Canada, nor does Sicom have the right to sublicense without Canada’s prior approval or to assign its rights."
It concluded that "In light of Canada’s right to permit infringement in certain cases, the requirement that Sicom consent to certain actions and be consulted in others, and the limits on Sicom’s right to assign its interests in the patent, we hold that the Agreement transfers fewer than all substantial rights in the patent from Canada to Sicom."
It added that a patent owner must be joined in any infringement suit brought by an exclusive licensee having fewer than all substantial rights, and Canada declined to join in the present action.
This case is Sicom Systems, Ltd. v. Agilent Technologies, Inc. and Tektronix, Inc. and Lecroy Corporation, U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 05-1066, an appeal from the U.S. District Court for the District of Delaware, D.C. No. 03-1171-JJF, Judge Joseph Farnan presiding.
Groups Oppose DOD Electronic Database on Privacy Grounds
10/18. Numerous groups signed a letter to Secretary of Defense Donald Rumsfeld that expresses their opposition to the Department of Defense's (DOD) proposed project titled "Joint Advertising and Market Research Studies (JAMRS) Recruiting Database".
This database, as described in a notice published in the Federal Register, and in the DOD's website, would be an electronic database, national in scope, containing personally identifying information, that uses social security numbers as a unique identifier of individuals. It would merge data collected by the DOD, Selective Service System, state departments of motor vehicles, and private sector data aggregators. A purpose of the database would be to facilitate military recruitment. However, the DOD adds that data would be disclosed to federal, state and foreign governments for any of a wide range of vaguely defined purposes.
The letter was also sent to the Chairman and ranking Democrats on the House and Senate Appropriations and Armed Services Committees.
Many of the groups that signed the letter are anti-military and/or left wing organizations without expertise in technology related policy analysis. However, the signers also include groups that frequently engage in policy advocacy with respect to government uses of new information technologies that may affect individual privacy. These include the Electronic Privacy Information Center (EPIC), American Civil Liberties Union (ACLU), Center for Democracy & Technology (CDT), and Electronic Frontier Foundation (EFF).
On the other hand, the list of signers does not include some of the more conservative groups that have a record of advocating privacy rights. Nor is former Rep. Bob Barr a signer.
The letter asserts that "This database was established in violation of the Privacy Act." Although, the letter does not argue that the DOD cannot create such a database. Rather, it merely argues that since the DOD did not publish a notice in the Federal Register in a timely manner, it has not followed the requisite Privacy Act procedure.
It also states that the "DOD proposes a wide range of ``Blanket Routine Uses.´´ A ``routine use´´ is a catchall loophole in the Privacy Act that allows an agency to disclose personal information to others without the individual's consent or knowledge. The list of fourteen DOD ``Blanket Routine Uses´´ include: disclosures to law-enforcement; state and local tax authorities; employment queries from other agencies; and disclosure of records to foreign authorities. Although individuals can opt-out recruitment solicitations, they cannot opt-out of this enormous database."
See also, the EPIC's web page titled "DOD Recruiting Database".
The DOD published a notice in the Federal Register (May 23, 2005, Vol. 70, No. 98, at Pages 29486 - 29487) that describes this database.
It states that this will be an electronic database, "maintained on electronic storage media".
It enumerates some of the fields, including "Full name, date of birth, gender, address, city, state, zip code, and where available Social Security Number (SSN), e-mail address, ethnicity, telephone number, ..."
The notice also lists unique identifiers that may be used to query the database. "Records may be retrieved by individual's name, Social Security Number, or by address".
The notice also states that the DOD will obtain information to include in its database from DOD sources. It adds that the DOD will obtain information from the Selective Service System and from "state Department of Motor Vehicle offices". It will also obtain information from "commercial information brokers/vendors".
The notice asserts that its main purpose is "to provide a single central facility within the Department of Defense to compile, process and distribute files of individuals who meet age and minimum school requirements for military service".
The notice also states that is may be used for other purposes. It states that "These records or information contained therein may specifically be disclosed outside the DoD as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows". It then states that "The DoD `Blanket Routine Uses´ set forth at the beginning of OSD's compilation of systems of records notices apply to this system." (OSD is Office of the Secretary of Defense.)
The notice does not list or explain the "Blanket Routine Uses". However, the DOD has published a description of such "blanket routine uses" in a web page titled "Department of Defense Blanket Routine Uses".
These other uses of the database are numerous and broad. For example, there is a blanket exemption for providing data to "state and local taxing authorities". There is also an exemption for "counterintelligence activities". There is also an exemption for disclosure to foreign governments pursuant to "international agreements and arrangements".
The broadest exemption is titled "Law Enforcement Routine Use". It is actually broader than law enforcement. It applies to any "potential violation of law". It applies not only to disclosure to federal government entities, but also to state, local and foreign governments. It applies not only to criminal matters, but also to civil and regulatory matters. There is no restriction that the personal data that is disclosed must relate to individuals who potentially violated any law.
The wording of this exemption is as follows: "If a system of records maintained by a DoD Component to carry out its functions indicates a violation or potential violation of law, whether civil, criminal, or regulatory in nature, and whether arising by general statute or by regulation, rule, or order issued pursuant thereto, the relevant records in the system of records may be referred, as a routine use, to the agency concerned, whether federal, state, local, or foreign, charged with the responsibility of investigating or prosecuting such violation or charged with enforcing or implementing the statute, rule, regulation, or order issued pursuant thereto."
Solicitor General to Argue IP Tying Antitrust Case
10/17. The Supreme Court issued an order in Illinois Tool Works v. Independent Ink, a patent tying antitrust case. The Court wrote that "The motion of the Solicitor General for leave to participate in oral argument as amicus curiae and for divided argument is granted." See, Order List [9 pages in PDF], at page 1, and Supreme Court docket.
While this is a patent tying case, in which the Court of Appeals held that a rebuttable presumption of market power arises from the possession of a patent over a tying product, the Supreme Court's decision may impact copyrights as well. Hence, leading copyright based trade groups, including software groups, have argued that the Supreme Court should hold that there is no presumption of market power, whether the intellectual property involved is patents or copyrights.
The Federal Trade Commission (FTC) and the Department of Justice's (DOJ) Antitrust Division filed a joint amicus curiae brief [41 pages in PDF], on the merits, urging reversal of the U.S. Court of Appeals (FedCir).
See, stories titled "Supreme Court Grants Certiorari in Patent Tying Antitrust Case" in TLJ Daily E-Mail Alert No. 1,158, June 21, 2005; and "FTC and DOJ File Amicus Brief in Patent Tying Antitrust Case" in TLJ Daily E-Mail Alert No. 1,191, August 9, 2005.
The Supreme Court has scheduled oral argument for 10:00 AM on Tuesday, November 29, 2005.
Background. Trident, Inc., a subsidiary of Illinois Tool Works, holds U.S. Patent No. 5,343,226, which pertains to ink jet printer technology. Trident also makes ink. Moreover, its standard form licensing agreement allowing the OEMs to use its patented product requires the OEMs to purchase their ink for Trident systems exclusively from Trident. Independent Ink also makes ink, and competes with Trident.
Independent Ink filed a complaint in U.S. District Court (CDCal) against Trident and Illinois Tool Works. It sought a declaratory judgment of non-infringement and invalidity against Trident’s patents. It also alleged Trident was engaged in illegal tying and monopolization in violation of sections 1 and 2 of the Sherman Act, which are codified at 15 U.S.C. § 1 and § 2.
The District Court granted summary judgment in favor of Trident on both claims. The District Court held that for patent tying to constitute a violation of the antitrust laws, the plaintiff must affirmatively prove market power.
The Court of Appeals issued its opinion [20 pages in PDF] on January 25, 2005. It held that "a rebuttable presumption of market power arises from the possession of a patent over a tying product". It further wrote that "Because no rebuttal evidence was submitted by the patent holder, we reverse the grant of summary judgment on the Sherman Act section 1 claim and remand for further proceedings. As to Independent’s Sherman Act section 2 claim, we affirm the district court’s grant of summary judgment." The opinion is also reported at 396 F.3d 1342.
The Court of Appeals relied, in part, upon United States v. Loew’s, Inc., 371 U.S. 38 (1962).
Amicus Briefs. This case has attracted numerous other amicus curiae briefs.
This is a patent case. However, it has attracted considerable interest from the copyright industries. A collection of leading trade groups that represent copyright industries, including the Motion Picture Association of America (MPAA), Recording Industry Association of America (RIAA), Business Software Alliance (BSA), Entertainment Software Association (ESA), Association of American Publishers (AAP), and others, filed an amicus brief [40 pages in PDF], on the merits, in which they urge the Supreme Court to "decline to presume that antitrust market power arises from the mere ownership of intellectual property rights, whether patents or copyrights."
These amici wrote that "the Loew's presumption cannot and should not serve to uphold the judgment of the Court of Appeals below. While the matter at bar is a patent case, the Court should reverse the judgment below and make clear that its holding applies to copyrights and other forms of IP as well."
Their counsel of record is Daniel Swanson of the Los Angeles office of the law firm of Gibson Dunn & Crutcher.
Verizon Communications also filed its own amicus brief. It is represented by Gary Taranto of Farr & Taranto.
The American Intellectual Property Law Association (AIPLA) filed an amicus brief [25 pages in PDF], on the merits, in support of neither party, urging the Supreme Court to eliminate the presumption of market power in patent antitrust tying cases. The Intellectual Property Owners Association (IPO) filed an amicus brief [27 pages in PDF], on the merits, in support of Illinois Tool Works, and urging reversal.
This case is Illinois Tool Works, Inc., et al. v. Independent Ink, Inc., Sup. Ct. No. 04-1329, a petition for writ of certiorari to the U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 04-1196.
Supreme Court Denies Cert in Merck v. Teva
10/17. The Supreme Court denied certiorari in Merck v. Teva Pharmaceuticals USA, a patent case involving the lexicographer rule. The Court wrote in its October 17, 2005, Order List that "The petition for a writ of certiorari is denied. The Chief Justice, Justice O'Connor, and Justice Breyer took no part in the consideration or decision of this petition." See, Order List [9 pages in PDF], at page 8. See also, docket.
The U.S. Court of Appeals (FedCir) issued its split opinion [32 pages PDF] on January 28, 2005. (Judge Rader dissented.) See also, errata [PDF]. The Court of Appeals issued its order [5 pages in PDF], with dissent, denying rehearing en banc, on April 21, 2005. Judges Lourie, Michel and Newman dissented.
This case is Sup. Ct. No. 05-236, and App Ct. No. 04-1005. The Court of Appeals heard an appeal from the U.S. District Court for the District of Delaware, Judge Joseph Farnan presiding.
FFIEC Urges Use of Better Authentication Methods in Internet Banking
10/17. The Federal Financial Institutions Examination Council (FFIEC) released a document [14 pages in PDF] titled "Authentication in an Internet Banking Environment". It states that financial institutions that provide internet based services should be using more reliable and effective technologies to authenticate their online customers, to inhibit identity theft, reduce fraud, and for other purposes.
This document states that the FFIEC agencies (which are the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, and Office of Thrift Supervision) "consider single-factor authentication, as the only control mechanism, to be inadequate for high-risk transactions involving access to customer information or the movement of funds to other parties."
It continues that "Financial institutions offering Internet-based products and services to their customers should use effective methods to authenticate the identity of customers using those products and services. The authentication techniques employed by the financial institution should be appropriate to the risks associated with those products and services. Account fraud and identity theft are frequently the result of single-factor (e.g., ID/password) authentication exploitation. Where risk assessments indicate that the use of single-factor authentication is inadequate, financial institutions should implement multifactor authentication, layered security, or other controls reasonably calculated to mitigate those risks."
See also, FFIEC release.
People and Appointments
10/17. Nortel Networks named Mike Zafirovski to be its next P/CEO. He will replace the current P/CEO, Bill Owens, on November 15, 2005. Zafirovski has worked for Motorola since 2000. He was P/CEO of Motorola's Personal Communications Sector, and then P/COO of Motorola. Before that, he worked for 25 years for General Electric. See, Nortel release.
10/17. On October 6, 2005, the House Judiciary Committee's (HJC) Subcommittee on Courts, the Internet, and Intellectual Property (CIIP) held an oversight hearing titled "Improving Federal Court Adjudication of Patent Cases". The HJC has now published the prepared testimony of the four witnesses. See, prepared testimony of Kimberly Moore (George Mason University School of Law), prepared testimony [13 pages in PDF] of John Pegram (Fish & Richardson), prepared testimony [21 pages in PDF] of Chris Katopis (Drinker Biddle & Reath), and prepared testimony [3 pages in PDF] of T.S. Ellis (Judge of the U.S. District Court for the Eastern District of Virginia).
10/17. The Supreme Court denied certiorari in Preston Small v. FCC. See, Order List [9 pages in PDF], at page 8. This is Sup. Ct. No. 05-284 and App. Ct. No. 04-1056 (DCCir).
10/17. The U.S. Court of Appeals (3rdCir) issued an amended opinion [90 pages in PDF] in Century 21 v. Lending Tree, a trademark infringement case involving the defense of nominative fair use. The Court of Appeals issued its original opinion [91 pages in PDF] on October 11, 2005. See, story titled "3rd Circuit Rules on Lending Tree's Web Use of Real Estate Brokers' Trademarks" in TLJ Daily E-Mail Alert No. 1,233, October 14, 2005.
10/17. The U.S. District Court (DC) issued an opinion in Adler v. Vision Lab Telecommunications, a case regarding junk fax messages. Adler filed a complaint in the District Court against Vision Lab Telecommunications and others alleging two counts of violation of the Telephone Consumer Protection Act (TCPA), which is codified at 47 U.S.C. § 227, one count of violation of the District of Columbia Consumer Protection and Procedures Act (DCCPPA), which is codified at D.C. Code § 28-3904, one count of negligence, and one count of invasion of privacy. The District Court granted summary judgment to Vision Lab on one count of violation of the TCPA based upon improper identification of fax messages, as well as the DCCPPA claim, and the negligence claim. Another count alleging violation of the TCPA based upon sending unsolicited faxes remains, as does the invasion of privacy claim. This case is William Adler v. Vision Lab Telecommunications, Inc., et al., U.S. District Court for the District of Columbia, D.C. No. 05-0003 (ESH), Judge Ellen Huvelle presiding.
Kroes Wants American Style Private Antitrust Lawsuits in Europe
10/17. Nellie Kroes, the European Commissioner for Competition Policy gave a speech in Paris, France titled "Damages Actions for Breaches of EU Competition Rules: Realities and Potentials". She advocated more private antitrust actions in Europe, including class actions. She said that "in Europe there is simply not enough damages litigation".
Kroes (at right) asserted that "Fostering private antitrust enforcement as a complement to public antitrust enforcement can thus be reasonably expected to help make those who might contemplate violating the competition rules think twice. And it goes without saying that a higher level of compliance with the competition rules further develops a culture of competition amongst market participants, including consumers, and thus strengthens the competitiveness of the European economy."
She also discussed why there is little private litigation today. She said that "private enforcement has, until recently, been hampered by the Commission’s monopoly on declaring restrictive market behaviour compatible with the European competition rules. This has meant that actions before national courts were blocked as long as the Commission was considering an exemption decision." But, she added, "Regulation 1/2003 remedied this situation by removing the Commission’s exemption monopoly and empowering national courts to apply Articles 81 and 82 of the EC Treaty in their entirety."
She said that other obstacles remain, including "uncertainty as to ability to prove the infringement, given that most of the evidence is usually in the hands of the defendant. Uncertainty as to the result of an action in court, combined with the risk of having to bear all costs that are related to the procedures if one loses the case, is probably one of the main reasons why potential plaintiffs decide against going to court, even when they have a good case." She added, "This is not justice!"
She continued that another obstacle to more litigation is the lack of rules that encourage class action litigation. She stated that "The damage of an individual consumer will only exceptionally outweigh the litigation costs. If we are really serious about giving justice to consumers, we have to facilitate the use of collective claims."
She asserted that she does not think that "any of us want to go down the track of litigation culture for its own sake".
Kroes did not reference the United States in her speech. However, she essentially advocated importing the U.S. antitrust private litigation system to Europe.
Go to News from October 11-15, 2005.