TLJ News from February 16-20, 2006

District Court Rules in Perfect 10 v. Google

2/17. The U.S. District Court (CDCal) issued its order [48 pages in PDF] titled "Order Granting in Part and Denying in Part Perfect 10's Motion for Preliminary Injunction Against Google" in Perfect 10 v. Google, a copyright infringement case.

Google's Image Search function involves the creation and display of reduced size (thumbnail) images, created from full sized images copied from other web sites, which may be protected by copyright, without first obtaining authorization. Google also displays these thumbnail images on a search results page, and on a two frame web pages, with the thumbnail in the top frame, and the web page containing the full size image in the bottom frame. The content of the lower frame is created by third parties, and stored on servers of third parties. Some of these third party web sites themselves display infringing full size pictures.

The present order pertains to Perfect 10's (P10) motion for preliminary injunction for copyright infringement, and Google's defense of fair use. The District Court wrote that the issue is "does a search engine infringe copyrighted images when it displays them on a ``image search´´ function in the form of ``thumbnails´´ but not infringe when, through in-line linking, it displays copyrighted images served by another website?"

The District Court granted P10's motion for a preliminary injunction of the display by Google of thumbnail copies of P10's copyrighted images. The District Court denied P10's motion as to framing of, and in-line linking to full size infringing copies elsewhere. The District Court also denied injunctive relief based upon P10's theories that Google's framing of, and linking to, infringing web sites constitutes vicarious and contributory infringement claims.

See, full story.

WTO DG Lamy Discusses Status of Doha Round

2/17. Pascal Lamy, the Director General of the World Trade Organization (WTO), gave a speech in Washington DC on February 17, 2006, titled "The Doha Development Agenda: Sweet Dreams or Slip Slidin' Away?"

He asked rhetorically, "Are we on the verge of a collapse of the multilateral trading system as many academics have written recently? are we witnessing the end of and era and taking a sharp bend into bilateralism? Are we moving closer to a ``cheap round´´? Or are we just witnessing the normal positioning that takes place prior to the last lap in the race?"

He then offered his predictions and analysis. First, he said that a cheap round "is not an option". He elaborated that "Even if we were just to keep what we have on the table today we would have gone beyond what was done in the Uruguay Round 10 years ago, well beyond, in fact. In agriculture alone the elimination of export subsidies and the reductions in domestic subsidies already on the table go much further than any previous round. The technology to cut tariffs on industrial or agricultural products would yield results higher than in previous rounds and the commitments on trade facilitation have the potential to boost trade more than any previous administrative commitments. And these are just a few examples of what is on the table already. And I am not saying that we should settle for this. We should aim higher and maintain the ambition that took us where we are today.

Second, he said that "even if the round would not yield everything we want, the WTO is much more than the Round; it comprises a vast body of laws and regulations which we will have to continue to apply. And it has a
dispute settlement which will continue to ensure that the rules of the game are respected." He added that "the WTO
will continue to act as custodian of the multilateral trade laws."

Third, he said that "very few of the so-called free trade agreements are really about freeing trade or creating new trading opportunities. And I still have to see a bilateral agreement that disciplines agricultural or fishery subsidies. Nor is business very encouraged by the proliferation of spaghetti bowls of rules of origin, certificates or standards."

Commerce Department Releases Report on IPv6

2/17. The Department of Commerce's (DOC) National Institute of Standards and Technology (NIST) and National Telecommunications and Information Administration (NTIA) have released a report [83 pages in PDF] titled "Technical and Economic Assessment of Internet Protocol Version 6 (IPv6)".

Internet Protocol version 6 (IPv6), which is currently replacing IPv4, provides a vastly increased number of internet addresses. It also provides for more efficient and faster routing, enhanced mobility features, and improved security, for example, through authentication.

The report states that "Although IPv6 is in the early stages of adoption, most network hardware, operating systems, and network-enabled software packages (e.g., databases, email, etc.) will likely include IPv6 capabilities within the next five years." (Parentheses in original.)

See also, story titled "House Government Reform Committee Holds Hearing on IPv6" in TLJ Daily E-Mail Alert No. 1,168, July 6, 2006.

With respect to the role of government, the report concludes that "industry should continue to take the lead in developing the IPv6 standards architecture, with coordination support and participation from government. Similarly, industry consortia and academic institutions should take the lead in conformance testing and development of interoperability solutions to support implementation, with support and participation from government. Finally, government has an important role to play as a consumer of IPv6 products and services and, therefore, must carefully evaluate the security and economic factors affecting adoption and assimilation of the new technology into federal IT systems. Private-sector decisions to purchase IPv6 products and services should be market driven, without influence from the federal government."

But, it continues that there are "market failures" that could "warrant government action to stimulate deployment of IPv6 in the United States". It elaborates that "Technological market failure refers to a condition under which either the producers and/or users of a technology underinvest relative to society’s optimal level of investment. Infratechnology research to support standardization, development of interoperability solutions, and conformance testing are all classic examples of where private returns on investment are not only less than social returns, but are below minimum private sector rates of return".

The report concludes that "the federal government will need to consider allocation of new resources and to work cooperatively with non-federal authorities and the private sector".

The report finds that "the transition to IPv6 may be a long process. Experts predict that long after most Internet users have migrated to IPv6, pockets of IPv4 may still exist in legacy systems. Hardware and software interoperability will be a key concern for enterprises wishing to interconnect their networks across heterogeneous environments. Interoperability needs will be a major consideration in an enterprise’s decision to adopt IPv6."

The report states that "ISPs and users will purchase IPv6-capable products during their normal equipment refresh cycles and that the costs of those products will be no greater than the costs of similar IPv4-only products. As a result, most of the costs that ISPs and users incur in turning on their IPv6 capabilities should be labor-related (e.g., staff training, installation, network testing)." (Parentheses in original.)

The report predicts that transition costs will be "relatively minimal" for individuals and entities that "do not operate their own significant network services". However, transition costs will be greater for government entities and large corporations.

Sen. Allen Introduces Bill to Allow Unlicensed Wireless Use of Broadcast White Space

2/17. Sen. George Allen (R-VA) introduced S 2327, the "Wireless Innovation Act of 2006", a bill to require the Federal Communications Commission (FCC) to complete its broadcast white space rulemaking proceeding, with instructions that it "permit unlicensed, non-exclusive use of unassigned, non-licensed television broadcast channels between 54 MHz and 698 MHz".

The original cosponsors of the bill are Sen. John Kerry (D-MA), Sen. John Sununu (R-NH), and Sen. Barbara Boxer (D-CA). All four are members of the Senate Commerce Committee, which has jurisdiction over the bill.

Sen. George AllenSen. Allen (at right) stated in the Senate that "The goal of the Wireless Innovation Act is to unleash the power of advanced technological innovation to facilitate the development of wireless broadband Internet services. Specifically, our legislation allocates certain areas within the broadcast spectrum that are otherwise unassigned and unused, known as white spaces, for wireless broadband services." See, Congressional Record, February 17, 2006, at page S1471.

Back on May 13, 2004, the FCC adopted a notice of proposed rulemaking (NPRM) regarding use by unlicensed devices of broadcast television spectrum where the spectrum is not in use by broadcasters. The FCC released the text [38 pages in PDF] of this item on May 25, 2004. This NPRM is FCC 04-113 in ET Docket Nos. 04-186 and 02-380. See also, story titled "FCC Adopts NPRM Regarding Unlicensed Use of Broadcast TV Spectrum" in TLJ Daily E-Mail Alert No. 898, May 14, 2004.

However, the FCC has not taken action in this proceeding.

The bill is short and simple. It instructs the FCC to issue an order in this proceeding, and further instructs the FCC in broad strokes what that order should contain.

The bill provides that "Not later than 180 days after the date of enactment of this Act, the Federal Communications Commission shall complete its proceeding and issue a final order regarding white space in the matter of Unlicensed Operation in the TV Broadcast Bands, ET Docket No. 04-186."

It further requires that "In completing the requirement described in subsection (a), the Federal Communications Commission shall in such final order -- (1) permit unlicensed, non-exclusive use of unassigned, non-licensed television broadcast channels between 54 MHz and 698 MHz; (2) establish technical guidelines and requirements for the offering of unlicensed service in such band to protect incumbent licensed services and licensees from harmful interference; and (3) require unlicensed devices operating in such band to comply with existing certification processes."

People and Appointments

2/17. The Senate confirmed Carol Dinkins and Alan Charles Raul to be the Chairman and Vice Chairman of the Privacy and Civil Liberties Oversight Board. See, Congressional Record, February 17, 2006, at page S1487. Bush announced these nominations back on June 10, 2005. See, story titled "Bush Names Members of Privacy and Civil Liberties Oversight Board" in TLJ Daily E-Mail Alert No. 1,151, June 10, 2005. This Board was created by Section 1061 of the Intelligence Reform and Terrorism Prevention Act of 2004. This bill was S 2845 in the 108th Congress. It is now Public Law No. 108-458.

2/17. The Senate confirmed Randall Kroszner to be a member of the Board of Governors of the Federal Reserve System for the unexpired term of 14 years from February 1, 1994. The Senate also confirmed Kevin Warsh to be a member for the unexpired term of 14 years from February 1, 2004. See, Congressional Record, February 17, 2006, at page S1487.

2/17. The Senate confirmed Edward Lazear to be a member of the President's Council of Economic Advisers. See, Congressional Record, February 17, 2006, at page S1487.

Bush Awards National Medals of Technology and Science

2/17. President Bush gave a speech, and presented National Medals of Technology (NMT) and National Medals of Science (NMS), at a ceremony in the East Room of the White House on Monday, February 13. See, full story.

House Democrats Promote Their Innovation Agenda

2/17. Rep. Nancy Pelosi (D-CA), and other House Democrats hosted an event in the Capitol Building on Tuesday, February 14, at which they discussed and promoted the "House Democrats' Innovation Agenda". See, full story.

Commentary: National Medal of Technology Program

2/17. The National Medal of Technology (NMT) program was instituted by the Stevenson-Wydler Technology Innovation Act of 1980. This was Public Law No. 96-180. It is now codified, along with amendments, at 15 U.S.C. § 3711. Persons involved in this NMT program variously state that its purpose is to incent innovation, reward innovators, and incent young people to study topics, such as math, sciences, and engineering, that will enable them to become innovators, or to contribute to the innovative process by becoming teachers or employees at technology related companies.

The subject of this article is the attributes of the NMT program that relate to the question of whether this program, as provided for by the statute, and as implemented by Presidents, is well tailored for incenting creative and innovative accomplishment.

In particular, the article addresses the practice of awarding NMTs to corporations, the disproportionate number of awards given to a few companies and their employees, the award of NMTs to companies that have inhibited innovation, the exclusion of foreign citizens, the use of background checks, and the influence of political campaign contributions.

See, full story.

IG Report Criticizes Treasury Department's Communications Procurement Program

2/16. The Department of the Treasury's (DOT) Office of the Inspector General (OIG) released a report [43 pages in PDF] on February 10, 2006, titled "Treasury Communications Enterprise Procurement Was Poorly Planned, Executed, and Documented". This is report is numbered OIG-06-028.

The report found that the DOT's "poor planning and execution" of is the Treasury Communications Enterprise (TCE) procurement "led to delays and increased costs". The DOT decided to procure its own agency specific communications enterprise, rather than rely on existing government wide Government Service Administration (GSA) contracts.

The OIG report found that the DOT's "GSA contract vehicles, both at the outset and following the TCE bid protest decision, was incomplete and that the business case documentation provided by Treasury, both during and after completion of our fieldwork, was deficient. We expected the documents provided for our review to show evidence that Treasury had considered various GSA (government-wide) telecommunications contract vehicles as alternatives to TCE during 2002 and 2003. This was done to a limited extent, but the documents provided did not show evidence that cost analyses had been performed to compare TCE with these alternatives." (Parentheses in original.)

The OIG report also found that the DOT "was not able to provide an adequate business case supporting this major acquisition. Throughout our audit field work, we made repeated requests for planning documents, including the TCE business case." The report states that after much procrastination, the DOT provided documents that "were neither cohesive, comprehensive, nor complete."

The report recommends that "In light of the fact that Treasury has reopened the TCE solicitation, we are recommending that Treasury consider all options before awarding the contract, including the option of canceling the solicitation."

Rep. Tom Davis (R-VA), the Chairman of the House Government Reform Committee, released a statement [2 pages in PDF] in response to the OIG report on February 13. He wrote that "From the beginning, I had misgivings about the TCE procurement. I suspected for the last year or so that TCE was an ill-considered stovepipe program conceived at a time when we needed to move in the opposite direction. We should be meeting the government's pressing need for secure, efficient, and cost-effective movement of information across agencies, departments, and jurisdictions of government. I felt that TCE would foster the perpetuation of duplicative agency-specific administrative functions across government that are far more costly and far less efficient than GSA’s centrally managed acquisition infrastructure for telecom."

Rep. Davis added that the OIG report "confirms all of my negative assumptions about the TCE scheme."

Rep. Davis letter also wrote a letter on February 16 to Secretary of the Treasury John Snow and Office of Management and Budget (OMB) Director Joshua Bolten about government communications procurement generally.

He wrote that "I do not support agencies erecting stovepipe infrastructures that too often are not interoperable and that do not facilitate the government's pressing need for secure, efficient and cost-effective movement of information across agencies, departments and jurisdictions of government."

Second, he wrote that "agency-specific procurements like TCE foster the perpetuation or creation of duplicative administrative procurement functions across government that are far more costly and far less efficient than centrally managed core infrastructure procurements."

And, he added that "this acquisition has been poorly planned and executed from the start."

He also noted that "Previously, I suggested that Treasury make every effort to use the existing General Services Administration (GSA) government-wide telecommunications contract -- FTS 2001 -- or other GSA contract vehicles for its immediate needs and then work with GSA on its comprehensive government communications Networx procurement slated for award next year.

Finally, he asked Snow and Bolten to advise him as to what actions they intend to take in response to the DOT/OIG report.

Congressional Committees Hold Hearings on Trade

2/16. The House Ways and Means Committee (HWMC) held a hearing on February 15, 2006, regarding President Bush's trade agenda for 2006. The Senate Finance Committee (SFC) held a similar hearing on February 16. Rob Portman, head of the Office of the U.S. Trade Representative (USTR), testified at both hearings.

See, Portman's presentation slides submitted to both Committees. See also, February 14 USTR report [29 pages in PDF] titled "U.S.-China Trade Relations: Entering a New Phase of Greater Accountability and Enforcement: Top-to-Bottom Review".

Also, on February 16, the House Appropriations Committee's Science, the Departments of State, Justice, and Commerce, and Related Agencies held a hearing on the FY 2007 budget for the USTR.

Rep. Bill Thomas (R-CA), the Chairman of the HWMC, wrote in his opening statement that "Many in Congress are concerned about the current status of the Doha Round. It seemed to me that several of our trading partners spent more energy in Hong Kong in trying to avoid free trade rather than liberalizing it, in particular, the European Union (EU), Japan, Brazil, and India. If countries were unwilling to move by December on key modalities, it is difficult for me to understand why they will move by the new deadline of April and finish by the end of 2006 before Trade Promotion Authority expires in 2007."

He said that "we should continue to aggressively pursue our bilateral efforts to liberalize trade", and that "I am particularly pleased that we are launching negotiations with Korea".

He also focused on trade with Japan and China. He said that "Japan has a long history of blocking U.S. goods, devising non-tariff barriers that allow their firms and farmers to operate while keeping out imports. U.S. beef is only the most well-publicized example."

"The same holds for China", said Rep. Thomas. "The Chinese agreed to a host of improvements on intellectual property enforcement in last year’s Joint Commission on Commerce and Trade (JCCT) process, and we memorialized those in legislation last year, H.R. 3283, the Trade Rights Enforcements Act. The Senate has not acted on this important bill. In the meantime, it is not clear that China has taken the steps it promised."

The House approved HR 3283 on July 27, 2005 on a roll call vote of 255-168. See, Roll Call No. 437.

Sen. Charles Grassley (R-IA), the Chairman of the SFC, wrote in his opening statement [PDF] that "More and more, bills are being introduced that address our trade relations with China. The top-to-bottom review will be an important resource for me as I intensify my own efforts to develop legislation over the next few weeks. I’ve grown increasingly frustrated with the lack of progress on China’s currency, so that’s one area I’m looking into. Other areas that need attention include compliance efforts, trade enforcement, and trade enhancement so that more Americans benefit from our trading relationship."

Sen. Grassley also discussed Doha round negotiations. He said that "Realistically, the negotiations must be completed by the end of this year if Congress is going to implement a Doha trade agreement prior to the termination of Trade Promotion Authority in July 2007. Ambassador Portman took a bold step to reinvigorate the negotiations last October by tabling an ambitious offer on agriculture. Unfortunately, that offer has not been matched in ambition by our negotiating partners."

He stated that "Congress will not accept any agreement that fails to provide meaningful market access for U.S. agricultural exports, in developed and developing countries alike." He added that "our manufacturers and service providers must also see substantial market access liberalization".

Sen. Max Baucus (D-MT), the ranking Democrat on the SFC, wrote in his opening statement [PDF] that "a more competitive America requires us to focus more resources on trade enforcement."

He continued that "there is a very real sense in the Congress that our trading partners do not always play by the rules. And there is a sense that we do not do enough to make sure that they do."

He concluded, "That’s why, this afternoon, Senator Hatch, Senator Stabenow, and I will introduce the Trade Competitiveness Act of 2006. Our bill includes a new Senate-confirmed Chief Trade Enforcement Officer, new reporting requirements, and additional funds."

Sen. Baucus introduced this bill, S 2317, on February 16. Sen. Baucus spoke in the Senate regarding this bill. He said that "This bill is the first in a comprehensive package of legislation that I will introduce during the next few weeks to bolster American competitiveness." He said that "this bill will step up trade enforcement in five ways."

First, he said that "every year, the USTR will be required to identify the biggest trade barriers hurting the U.S. economically. The USTR will have to get Congress's input. And the USTR will be required to act, through the WTO or in some other way, to break those barriers down."

Second, he said that this bill "will create a ``Chief Trade Enforcement Officer´´ at the USTR. This person will be confirmed by the Senate. His or her entire job will be to investigate enforcement concerns and recommend action to the USTR."

Third, he said that this bill "will create a ``Trade Enforcement Working Group´´ in the Executive Branch. It will be chaired by the USTR, and include representatives of the Departments of Commerce, State, Agriculture, and Treasury."

Fourth, he said that this bill "provides $5 million additional to the USTR for enforcement."

Fifth, he said that this bill "will send a strong message to the International Monetary Fund. It will urge our Administration to tell the IMF to get aggressive with countries that manipulate their own currency to obtain a trade advantage. It will also urge the IMF to undertake reforms so it becomes more transparent and more representative of the emerging economies in Asia."

Gary Shapiro, head of the Consumer Electronics Association (CEA), commented on trade with China in a February 16 release. He said that "the Chinese market has become increasingly more attractive to consumer electronics manufacturers and distributors", but that "serious challenges to our industry's trade relationship persist. Among these obstacles are insufficient intellectual property rights enforcement, a failure to join the World Trade Organization (WTO) government procurement agreement, and the absence of industry-led, open and transparent standards development and conformity assessment procedures."

District Court Issues Order Regarding FOIA Request for DOJ/NSA Records

2/16. The U.S. District Court (DC) issued a Memorandum Opinion and Order [PDF] in EPIC v. DOJ, a Freedom of Information Act (FOIA) case arising out of the Electronic Privacy Information Center's (EPIC)  request for documents regarding the National Security Agency's (NSA) extra-judicial electronic surveillance program.

See also, story titled "EPIC Files FOIA Complaint Against DOJ for Records Related to NSA Domestic Terrorist E-Surveillance" in TLJ Daily E-Mail Alert No. 1,295, January 24, 2006.

On Friday, February 10 the Court held a hearing on the EPIC's motion [PDF] for an order compelling the DOJ to expedite its processing of the request. On February 16 the Court issued its order. It provides that "the "DOJ shall complete the processing of EPIC's December 16, 2005 FOIA requests and produce or identify all responsive records within 20 days", and that the "DOJ shall provide EPIC with a document index and declaration, as specified in Vaughn v. Rosen, 484 F.2d 820 (D.C. Cir. 1973), stating its justification for the withholding of any documents responsive to EPIC’s requests within 30 days".

This case is EPIC v. DOJ, U.S. District Court for the District of Columbia, D.C. No. 06-0096, Judge Henry Kennedy presiding.

More News

2/16. The Federal Trade Commission (FTC) released a report [31 pages in PDF] titled "Reforms to the Merger Review Process". FTC Chairman Deborah Majoras stated in a release that "Over the past decade, the growth in the number of electronic documents and the greater use of economic tools to analyze mergers have increased the costs involved in second requests ... The reforms that we are implementing today should improve the effectiveness and efficiency of the FTC’s review of mergers and reduce the burdens of the second request process, to the benefit of the parties and consumers."

Go to News from February 11-15, 2006.