TLJ News from February 6-10, 2007

AG Gonzales Discusses Intellectual Property in Brazil

2/9. Attorney General Alberto Gonzales gave a speech in Rio de Janeiro, Brazil, regarding intellectual property rights.

Alberto GonzalesGonzales (at right) said that intellectual property protection "requires cooperation and a partnership that bridges cultural and geographic distances to achieve common goals for our citizens and our economies. And I am here to say that this partnership must include a mutual commitment to enforce the intellectual property rights that form the foundation of our dynamic global economy."

He added that "our work must proceed on several fronts. We must strengthen our global enforcement efforts, ensure strong intellectual property laws, increase resources devoted to IP law enforcement, and work to increase the number of joint U.S.-Brazil operations."

"Our law enforcement agencies must work together to develop and prosecute international piracy cases", said Gonzales. "The digital age has created a borderless world for large criminal conspiracies -- so our law enforcement efforts must be global and borderless as well. Every member of the global economy has a responsibility to keep counterfeit goods out of the marketplace."

Also, the Department of Commerce (DOC) announced on February 8 that Secretary of Commerce Carlos Gutierrez will travel to New Dehli, India on February 13-14, 2007. His agenda includes discussing intellectual property. See, DOC release.

Rep. Dingell Says Commerce Committee Will Exercise its Cybersecurity Jurisdiction

2/9. The House Commerce Committee (HCC) released a letter [PDF] on February 1 from the Government Accountability Office (GAO) to Rep. John Dingell (D-MI). It responds to a letter request from Democratic and Republican leaders of the HCC. The letter confirms the GAO's "commitment to study the use of information technology in the credit derivatives market", outlines the objectives, scope and methodology of the investigation that it will undertake, and states that the GAO will issue its report by June 27, 2007.

Rep. Dingell stated in a release regarding this matter that the HCC "will vigorously exercise its cybersecurity jurisdiction".

He continued that "Failure to do so would enable serious infrastructure problems to trigger financial calamities with repercussions for the whole economy. I commend the Federal Reserve Bank of New York for its leadership in this matter, and I hope that the information GAO has uncovered will be helpful to our sister committee, Financial Services, in its oversight of financial institutions and markets under its jurisdiction."

HCC cybersecurity jurisdiction? HCC credit derivatives jurisdiction?

The Rules of the House of Representatives One Hundred Tenth Congress [55 pages in PDF], dated January 24, 2007, at Rule X, lists the fifteen areas of HCC jurisdiction. It does not list "cybersecurity", or "credit" or "credit derivatives". (See, pages 6-7.) Moreover, House Rule X provides that the House Financial Services Committee has jurisdiction over "credit" and "Banks and banking". (See, page 7.)

The HCC web site also contains a statement of its jurisdiction. It quotes verbatim House Rule X's list of fifteen areas of HCC jurisdiction. However, the HCC statement adds a sixteenth item: "Homeland security-related aspects of the foregoing, including cybersecurity". This additional item predates the 110th Congress.

In contrast, House Rule X provide that the House Homeland Security Committee has jurisdiction over "homeland security policy". (See, page 7.)

HCC leaders wrote a letter [PDF] to the GAO on June 6, 2006, regarding "credit derivatives", in which they asserted that this "relates to matters within this Committee's Rule X jurisdiction over interstate and foreign communications". The HCC's February 1, 2007, release shifts the HCC's basis for claiming jurisdiction.

HCC leaders have a history of aggressive and bipartisan assertion of jurisdiction, including in technology related areas. See, for example, story titled "House Commerce and Judiciary Committees Vie for High Tech Leadership, in Tech Law Journal, June 15, 1999. See also, stories titled "Judiciary Committee Leaders Condemn Jurisdictional Power Grab", "Chairman Barton Says Commerce Committee Will Mark Up Boucher Doolittle Bill in July", and "House Commerce Committee's Primary Jurisdiction Over HR 107" in TLJ Daily E-Mail Alert No. 924, June 23, 2004.

House Rule X does not assign "cybersecurity" to any committee. However, in the past, various House committees have conducted investigations, held hearings, and reported bills that relate to cybersecurity issues that are incidental to the jurisdictions of those committees. For example, the House Science and Technology Committee, which has jurisdiction over scientific research, scholarships, and the National Science Foundation (NSF) and the National Institute of Standards and Technology (NIST), and its Computer Security Division (CSD), has authorized appropriations for cybersecurity related research. The HJC, which has jurisdiction over crime, has reported bills that amend criminal law and procedure with respect to cybersecurity. The House Oversight and Government Reform Committee has reported bills pertaining to cybersecurity at federal departments and agencies. The House Appropriations Committee has reported bills that appropriate funds for cybersecurity related purposes. The House Homeland Security Committee, and its Subcommittee on Emerging Threats, Cybersecurity, and Science and Technology, have been involved in cybersecurity in the context of critical infrastructures and homeland security.

One cybersecurity issue over which the HCC and the House Judiciary Committee (HJC) now vie for leadership is notification of data breaches. For example, on February 7, 2007, Rep. Lamar Smith (R-TX), the ranking Republican on the HJC, and other HJC Republicans, introduced HR 836, the "Cyber-Security Enhancement and Consumer Data Protection Act of 2007". This bill would, among other things, mandate disclosure of data security breaches. Also, on February 8, 2007, Rep. Bobby Rush (D-IL), and other members of the HCC, introduced HR  958, the "Data Accountability and Trust Act", or DATA. This bill would, among other things, mandate disclosure of data security breaches. Both bills were drafted with language that would give one committee jurisdiction, and deprive the other of jurisdiction.

Another cybersecurity issue area occupied by both the HCC and HJC involves spyware. On February 8, 2007, Rep. Ed Towns (D-NY), Rep. Mary Bono (R-CA), and other members of the HCC, introduced HR 964, the "Securely Protect Yourself Against Cyber Trespass Act" or SPY ACT.

Rep. Dingell's assertion of cybersecurity jurisdiction in the context of credit derivatives may also involve the HCC in an issue that is also of interest to, and within the jurisdiction of, the House Financial Services Committee.

Historically, in some situations, one consequence of committee jurisdictional competition has been that no committees' bill has been enacted into law. Different committees, with different constituent groups, have sometimes pursued bills with divergent provisions. Also, one scenario of committee jurisdictional competition has been that one committee has asserted jurisdiction over a topic for the purpose of preventing a second committee from succeeding in enacting legislation on that topic.

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2/9. The Copyright Office (CO) published a notice in the Federal Register that announces that it is compiling a new specialty station list "to identify commercial television broadcast stations which, according to their owners, qualify as specialty stations for purposes of the former distant signal carriage rules" of the Federal Communications Commission (FCC). This list is relevant to the cable compulsory license, which is codified at 17 U.S.C. § 111. The CO requests that "all interested owners of television broadcast stations that qualify as specialty stations, including those that previously filed affidavits, to submit sworn affidavits to the Copyright Office stating that the programming of their stations meets the requirements specified under the FCC regulations in effect on June 24, 1981." The deadline to submit affidavits is April 9, 2007. See, Federal Register, February 8, 2007, Vol. 72, No. 26, at Pages 6008-6010.

2/9. The Copyright Office (CO) published a notice in the Federal Register that announces, describes, recites, and set the effective date (February 8, 2007) for a technical amendment in the CO regulations regarding fees for recordation of an interim or amended designation of agent to receive notification of claimed infringement under the Copyright Act. See, Federal Register, February 8, 2007, Vol. 72, No. 26, at Pages 5931-5932.

2/9. A grand jury of the U.S. District Court (SDTex) returned a verdict of guilty on seven counts of wire fraud, in violation of 18 U.S.C. § 1343, against Rafael G. Adame, former president and owner of ATE Tel Solutions Inc., in connection with his defrauding of the Federal Communications Commission's (FCC) e-rate subsidy program. See, DOJ release.

2/9. Securities and Exchange Commission (SEC) Commissioner Kathleen Casey gave a speech in which she addressed Section 404 of the Sarbanes Oxley Act. She said that "We need to fix 404. No other issue in recent times has come to symbolize regulation gone awry", and that "While the spirit and letter of the law never contemplated the costly and burdensome result that this provision has generated, the law's implementation undoubtedly facilitated such a result." She continued that the SEC and the Public Company Accounting Oversight Board (PCAOB) "are now faced with attempting to undo the regulatory framework and consequent market behavior that has driven this costly compliance regime." Casey spoke at a Practising Law Institute event in Washington DC. SEC Commissioner Annette Nazareth discussed the SEC's Section 404 management guidance in her speech at the same event.

2/9. Securities and Exchange Commission (SEC) Chairman Chris Cox gave a speech at a Practising Law Institute event in Washington DC. As usual, he discussed the use of interactive data in SEC filings, and other information technology projects at the SEC. He said that "it's high time we tap the computing power of today's technology, and take advantage of the real-time speed of the Internet." He also discussed internet based account intrusion. He said that "is bank robbery in cyberspace, without the guns and the getaway car, but every bit as dangerous for the account holders. And because there are no exploding dye packs, the money doesn't even need to be laundered." He continued that the perpetrators "illegally hacked into the brokerage accounts of individual investors, and liquidated the investors' holdings. They then used the investors' money to buy large quantities of shares in small, thinly traded companies that the fraudsters already owned. The fraudsters then sold their own shares at the inflated prices they'd just managed to manipulate." He added that "This has become a major concern for brokerage houses nationwide, because thus far they have absorbed the losses that would otherwise be borne by their individual customers."

Summary of HR 936, the Prevention of Fraudulent Access to Phone Records Act

2/8. Rep. John Dingell (D-MI), Rep. Joe Barton (R-TX), and others introduced HR 936, the "Prevention of Fraudulent Access to Phone Records Act".

This bill has two titles. First, Title I contains civil prohibitions affecting pretexters, purchasers of data collected by pretexting, data brokers, and other intermediaries. It give enforcement authority to the Federal Trade Commission (FTC).

Second, Title II revises 47 U.S.C. § 222, the section of the Communications Act that currently limits carriers' dissemination of customer proprietary network information (CPNI). Section 222 gives enforcement authority to the Federal Communications Commission (FCC). The bill requires the FCC to conduct a rulemaking proceeding regarding protecting customer information, and limits the sharing of information by carriers with affiliates, partners and contractors.

HR 936 contains no criminal prohibitions. Nor does it create any private right of action.

Title I: FTC Civil Enforcement Authority. Section 101 of the bill, at subsection (a) provides that "It shall be unlawful for any person to obtain or attempt to obtain, or cause to be disclosed or attempt to cause to be disclosed to any person, customer proprietary network information relating to any other person by -- (1) making a false, fictitious, or fraudulent statement or representation to an officer, employee, or agent of a telecommunications carrier; or (2) providing any document or other information to an officer, employee, or agent of a telecommunications carrier that the person knows or should know to be forged, counterfeit, lost, stolen, or fraudulently obtained, or to contain a false, fictitious, or fraudulent statement or representation."

This subsection (a) is directed at the entities that engage in pretexting to obtain CPNI. The following two subsection are directed at those who purchase the fruits of pretexting, as well as data brokers and other intermediaries that traffic in the fruits of pretexting.

Subsection (b) the provides that "It shall be unlawful to request a person to obtain from a telecommunications carrier customer proprietary network information relating to any third person, if the person making such a request knew or should have known that the person to whom such a request is made will obtain or attempt to obtain such information in the manner described in subsection (a)."

Subsection (c) provides that "It shall be unlawful for any person to sell or otherwise disclose to any person customer proprietary network information relating to any other person if the person selling or disclosing obtained such information in the manner described in subsection (a)."

These provisions prohibit fraudulently obtaining CPNI from carriers, or buying or selling CPNI that was fraudulently obtained. It should be noted that the HCC held hearings in the 109th Congress on pretexting that revealed a wide range of other practices that are associated with attempts to fraudulently obtain CPNI. Some of these other practices, which are not expressly prohibited by this bill, include:

The HCC's hearings also revealed, in the case of the Hewlett Packard scandal, that the overall investigation was segmented, both vertically (contractor and subcontractors) and horizontally (different entities targeted different carrier call centers). If this bill were enacted, some of those involved in a highly segmented operations might escape liability on that basis that they did not obtain or attempt to obtain CPNI.

The definition of "carrier" may also be significant. While these sections reference carriers, the bill defines this term to include VOIP service providers. But then the bill defines this to mean "any service that is treated by the Federal Communications Commission as a telecommunications service provided by a telecommunications carrier for purposes of section 222 of the Communications Act of 1934 (47 U.S.C. 222) under regulations promulgated pursuant to subsection (h) of such section."

The FCC has an open Section 222 rulemaking proceeding. The notice of proposed rulemaking states that the FCC is considering extending its CNPI rules to encompass services other that voice communications and VOIP. See, story titled "FCC Rulemaking Proceeding on CPNI May Extend to Internet Protocol Services" in TLJ Daily E-Mail Alert No. 1,310, February 15, 2006.

Finally, there is an exemption for law enforcement agencies and their agents. The bill provides that "No provision of section 101 shall be construed so as to prevent any action by a law enforcement agency, or any officer, employee, or agent of such agency, from obtaining or attempting to obtain customer proprietary network information from a telecommunications carrier in connection with the performance of the official duties of the agency, in accordance with other applicable laws."

That is, this exempts law enforcement personnel from liability under HR 936 for lying to obtain from carriers information that Section 222 bars the carriers from knowingly giving to law enforcement.

This exemption is broad and open ended. For example, this exemption extends to any "agent" of law enforcement. Thus, not only does this subsection exempt law enforcement personnel, it also exempts the sort of entities previously hired by Hewlett Packard that sell their services and information to law enforcement agencies.

Additionally, the bill does not limit the meaning of the term "law enforcement agency". The term is left undefined and unlimited. It is not restricted to criminal law enforcement. It is not limited to investigations. It is not limited to federal, state and local agencies. It would therefore, for example, exempt foreign law enforcement agencies, such as those of the People's Republic of China, as well as the firms that they hire, that fraudulently obtain personal information for the purposes of political surveillance or industrial espionage.

Another assertion of this exemption might arise when the FTC considers taking enforcement action with respect to pretexting by or on behalf of an officer of the court who seeks information on a person for the purpose of obtaining service of a subpoena or order issued by the court.

Nevertheless, Rep. Barton described the law enforcement exemption at the March 9 hearing as "narrow".

Title I gives civil enforcement authority to the FTC. It creates no private right of action.

It is silent both as to state enforcement authority, and preemption of state laws.

Title II: Section 222 and Pretexting. 47 U.S.C. § 222 is the section of the Communications Act that prohibits carriers from disclosing CPNI. It regulates only carriers. It gives enforcement authority to the FCC.

However, it imposes no obligations upon carriers regarding minimum efforts to protect CPNI from being fraudulently obtained. Section 203 of HR 936 requires the FCC to conduct a rule making proceeding to adopt rules to prevent fraudulent access to phone records.

It requires that the FCC require "telecommunications carriers to establish a security policy that includes appropriate standards relating to administrative, technical, and physical safeguards to ensure the security and confidentiality of customer proprietary network information".

It also states that the FCC should "consider prescribing regulations" requiring that "telecommunications carriers to institute customer-specific identifiers in order to access customer proprietary network information". The bill does not use the term "password".

The bill also states that the FCC should consider requiring encryption of CPNI. It also states that the FCC should consider requiring carriers to delete CPNI "after a reasonable period of time if such data is no longer necessary for the purpose for which it was collected ...".

The bill also requires the FCC to mandate that carriers notify customers of "breach of the regulations under this section" with respect to CPNI.

The bill also requires the FCC to mandate that carriers and their agents "maintain records (I) of each time customer proprietary network information is requested or accessed by, or disclosed to, a person purporting to be the customer or to be acting at the request or direction of the customer; and (II) if such access or disclosure was granted to such a person, of how the person's identity or authority was verified."

The bill also requires the FCC to mandate that carriers not pretext each other to obtain each other's CPNI.

Title II: Section 222 and Information Sharing by Carriers. Section 202 of the bill contains restrictions on carriers' sharing of data with affiliates, partners and contractors.

This is largely unrelated to the issue of pretexting or fraud, but nevertheless, is an issue of considerable interest to some members of the HCC. This part of the bill is also of concern to carriers who argue that these restrictions interfere with legitimate business operations.

Section 202 of the bill replaces the current language of Section 222(c)(1). This section currently provides that "Except as required by law or with the approval of the customer, a telecommunications carrier that receives or obtains customer proprietary network information by virtue of its provision of a telecommunications service shall only use, disclose, or permit access to individually identifiable customer proprietary network information in its provision of (A) the telecommunications service from which such information is derived, or (B) services necessary to, or used in, the provision of such telecommunications service, including the publishing of directories."

This references CPNI. The bill would distinguish between CPNI, "individually identifiable" CPNI or IICPNI, and "detailed customer telephone record" or DCTR. The bill also provides that DCTR means "customer proprietary network information that contains the specific and detailed destinations, locations, duration, time, and date of telecommunications to or from a customer, as typically contained in the bills for such service. Such term does not mean aggregate data or subscriber list information."

The bill provides that the new subsection 222(c)(1)(A) reads as follows: "Except as required by law or as permitted under the following provisions of this paragraph, a telecommunications carrier that receives or obtains individually identifiable customer proprietary network information (including detailed customer telephone records) by virtue of its provision of a telecommunications service shall only use, disclose, or permit access to such information or records in the provision by such carrier of -- (i) the telecommunications service from which such information is derived; or (ii) services necessary to, or used in, the provision of such telecommunications service, including the publishing of directories." (Parentheses in original.)

The bill then creates an opt-in regime for carriers' sharing of information with affiliates, partners and contractors. First, with respect to DCTR and partners and contractors, but not affiliates, the bill provides that "A telecommunications carrier may only use detailed customer telephone records through, or disclose such records to, or permit access to such records by, a joint venture partner, independent contractor, or any other third party (other than an affiliate) if the customer has given express prior authorization for that use, disclosure, or access, and that authorization has not been withdrawn."  (Parentheses in original.)

Second, the bill imposes a limit upon carriers sharing IICPNI or DCTR with affiliates. The bill provides that "A telecommunications carrier may not, except with the approval of a customer, use individually identifiable customer proprietary network information (including detailed customer telephone records) through, or disclose such information or records to, or permit access to such information or records by, an affiliate of such carrier in the provision by such affiliate of the services described in clause (i) or (ii) of subparagraph (A)." (Parentheses in original.)

Third, the bill provides that "A telecommunications carrier may not, except with the approval of the customer, use individually identifiable customer proprietary network information (other than detailed customer telephone records) through, or disclose such information to, or permit access to such information by, a joint venture partner or independent contractor in the provision by such partner or contractor of the services described in clause (i) or (ii) of subparagraph (A)." (Parentheses in original.)

And finally, the bill includes a wireless number privacy provision. It states that "A telecommunications carrier may not, except with prior express authorization from the customer, disclose the wireless telephone number of any customer or permit access to the wireless telephone number of any customer."

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2/8. The Senate Judiciary Committee (SJC) held a business meeting. The agenda included numerous bills, including S 236, the "Federal Agency Data Mining Reporting Act of 2007", sponsored by Sen. Russ Feingold (D-WI) and others. The SJC held over consideration of this bill. The next business meeting will likely be held on Thursday, February 15, 2007.

10th Circuit Considers TCPA Junk Fax Claims

2/7. The U.S. Court of Appeals (10thCir) issued its opinion [19 pages in PDF] in US Fax Law Center v. iHire, a civil case regarding standing to bring an action based upon an assignment of a claim for sending of unsolicited fax messages in violation of 47 U.S.C. § 227(b)(1)(C). The opinion also addresses federal jurisdiction.

Introduction. iHire, LLC, and numerous other defendants sent fax messages to persons in the state of Colorado. The plaintiffs, US Fax Law Center, Inc. and Consumer Crusade, Inc., obtained assignments of claims under the Telephone Consumer Protection Act (TCPA) from these fax recipients. The plaintiffs brought six actions in federal court in Colorado. The District Courts dismissed all for lack of jurisdiction and/or standing.

In this consolidated appeal, the Court of Appeals held that a private junk fax claim brought under the TCPA may be heard in federal court under diversity jurisdiction. However, it also held that state law controls on the issue of assignability of TCPA claims, and under Colorado law, these claims are not assignable. Hence, the plaintiffs lack standing to sue.

This opinion does not rule on federal question jurisdiction. However, six other circuits have ruled that there is no federal question jurisdiction.

The U.S. District Courts are federal courts with original jurisdiction. That is, they try cases. They are of limited jurisdiction. With a few exceptions, they can only hear cases that either arise under Constitution, laws and treaties of the US (federal question jurisdiction) or in cases between citizens of different states (diversity jurisdiction).

Statute. The TCPA is codified at 47 U.S.C. § 227. It provides, at subsection (b)(1)(C), provides that "It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States ... to use any telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone facsimile machine".

Subsection (b)(3) then includes vague and unusual language regarding a private right of action for damages. It provides that "A person or entity may, if otherwise permitted by the laws or rules of court of a State, bring in an appropriate court of that State--
  (A) an action based on a violation of this subsection or the regulations prescribed under this subsection to enjoin such violation,
  (B) an action to recover for actual monetary loss from such a violation, or to receive $500 in damages for each such violation, whichever is greater, or
  (C) both such actions."

That is, the statute states that there is a private right of action, but in state courts. State courts are courts of general jurisdiction, and may hear claims arising under federal law, although such actions may be subject to removal to a federal courts. The language of the statute might be interpreted to mean that while there is a federal rule, and a federally created private right of action, federal jurisdiction is eliminated.

Indeed, six federal circuits have held that this section means that there is no federal question jurisdiction over private junk fax TCPA suits. See, Murphey v. Lanier, 204 F.3d 911 (9th Cir. 2000); Foxhall Realty Law Offices, Inc. v. Telecomm. Premium Servs., 156 F.3d 432 (2d Cir. 1998); ErieNet, Inc. v. Velocity Net, Inc., 156 F.3d 513 (3d Cir. 1998); Nicholson v. Hooters of Augusta, Inc., 136 F.3d 1287 (11th Cir. 1998); Int’l Science & Tech. Inst., Inc. v. Inacom Commc’ns, Inc., 106 F.3d 1146 (4th Cir. 1997); and Chair King, Inc. v. Houston Cellular Corp., 131 F.3d 507 (5th Cir. 1997).

In contrast, two circuits have held that there is diversity jurisdiction. See, Gottlieb v. Carnival Corp., 436 F.3d 335 (2d Cir. 2006) and Brill v. Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir. 2005).

Subsection (b)(3) also provides that "If the court finds that the defendant willfully or knowingly violated this subsection or the regulations prescribed under this subsection, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph (B) of this paragraph."

District Court. US Fax Law Center, Inc. and Consumer Crusade, Inc. filed six complaints in U.S. District Court (DColo) against numerous defendants alleging violation of the TCPA. The plaintiffs requested a $500 statutory award for each unsolicited fax, and a $1500 statutory award for each fax sent knowingly and willfully.

The District Courts dismissed all six complaints, for lack of personal jurisdiction over the defendants, and/or for the plaintiffs' lack of standing to bring the action.

One District Court held that the claims are unassignable because they are personal injury privacy claims and penal in nature. Hence, the plaintiffs lack standing.

This District Court also held that there is neither federal question jurisdiction, nor diversity jurisdiction. It held that state courts are the exclusive forum for the enforcement of private junk fax TCPA actions.

Court of Appeals. The Court of Appeals first held that one can bring a TCPA junk fax claim in federal court under diversity jurisdiction.

It reasoned that diversity jurisdiction is different in nature from federal question jurisdiction. It wrote that "absent an explicit indication that Congress intended to create an exception to diversity jurisdiction, one may not be created by implication". In contrast, federal question jurisdiction can be eliminated if a statute places jurisdiction elsewhere.

The Court of Appeals also noted that "Congress's apparent purpose in divesting federal courts of federal question jurisdiction over TCPA claims was that small claims are best resolved in state courts designed to handle them. ... But, this purpose has little force in a diversity suit, which by definition involves an amount in controversy exceeding $75,000."

The Court of Appeals next addressed the assignability of TCPA junk fax claims. The statute is silent upon the assignment of claims, and standing to sue.

It first held that the law of the state, not federal law, controls. Then it held on the basis opinions of the courts of the state of Colorado that "TCPA claims are unassignable because they are in the nature of personal-injury, privacy claims." Thus, the "underlying assignment of TCPA claims was invalid", and the plaintiffs therefore lack standing to sue.

Comment. The Court of Appeals also commented that "individuals harmed by unsolicited telephone calls or faxes are always free to bring suits themselves".

However, since the maximum recovery is $500 for one junk fax message, or $1,500 if the sender willfully or knowingly violated the statute, few recipients, or their prospective counsel, will find it financially feasible to pursue a private right of action. Without court procedures that allow plaintiffs to create the litigatory efficiencies enabled by the aggregation of claims, many junk fax senders will remain undeterred by the effects of private litigation.

The case is US Fax Law Center, Inc. v. iHire, LLC, and consolidated appeals, U.S. Court of Appeals for the 10th Circuit, App. Ct. Nos. 05-1325, 05-1441, 05-1447, 05-1465, 05-1521, and 05-1523, appeals from the U.S. District Court for District of Colorado, D.C. Nos. 04-B-344(CBS), 05-CV-322-LTB, 05-CV-220(PSF/CBS), 05-CV-237-LTB, 05-B-219, and 05-CV-00210 LTB.

People and Appointments

2/7. The Senate confirmed Michael McConnell to be Director of National Security. See, Congressional Record, February 7, 2007, at Page S1730.

2/7. Hugh Carroll joined the office of Rep. Chip Pickering (R-MS), a member of the House Commerce Committee (HCC), and its Subcommittee on Telecommunications and the Internet. He will handle telecommunications, judiciary and transportation policy. He previously worked for the House Transportation and Infrastructure Committee. Mike Hurst, who previously handled telecommunications issues for Rep. Pickering, has become an Assistant U.S. Attorney in the Office of the U.S. Attorney for the Southern District of Mississippi. See, release.

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2/7. The House approved HR 742 by voice vote. This bill amends the Antitrust Modernization Commission Act of 2002, which is codified at 15 U.S.C. § 1 note, to extend the term of the Antitrust Modernization Commission (AMC). The 2002 Act requires the AMC to submit a report, within three years after its first meeting, "containing a detailed statement of the findings and conclusions of the Commission, together with recommendations for legislative or administrative action the Commission considers to be appropriate". The 2002 Act then provides that the AMC ceases to exist 30 days after submitting the report. HR 742 provides that the AMC ceases to exist 60 days after submitting the report.

2/7. The U.S. Court of Appeals (7thCir) issued is opinion in Custom Vehicles v. Forest River, a trademark case involving descriptive marks and secondary meaning. A small start up company with few sales adopted a descriptive mark, and filed with the U.S. Patent and Trademark Office (USPTO) an intent to use trademark, only to soon find a large company using a very similar mark for a different product -- a reverse confusion case. The small company filed a complaint in U.S. District Court (NDInd). The District Court granted summary judgment to the large company, and the Court of Appeals affirmed. Judge Richard Posner, who wrote the opinion of the Court of Appeals, stated that "a descriptive mark will facilitate introducing a new product to the public, and so it is a natural choice for a start-up, but if he adopts such a mark he may find himself drowned out". He added that "it is difficult, maybe impossible, for a small seller of an unpopular brand -- a seller who has negligible sales -- to acquire secondary meaning for its brand name", and hence, a legally protected trademark. The plaintiff should have used an arbitrary or fanciful mark. This case is Custom Vehicles, Inc. v. Forest River, Inc., U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 06-2009, an appeal from the U.S. District Court for the Northern District of Indiana, South Bend Division, D.C. No. 3:04 CV 771, Judge Robert Miller presiding. Posner wrote the opinion of the Court of Appeals, in which Judges Easterbrook and Ripple joined.

Pascal Lamy2/7. Pascal Lamy, Director General of the World Trade Organization (WTO), gave a report to the WTO's Trade Negotiating Committee regarding the prospects for completion of Doha round negotiations. He stated that "we have resumed our negotiations fully across the board". Lamy (at right) said that "Since the beginning of the year, we have witnessed a number of developments, starting with an increasing level of political engagement and clear signals of renewed commitment to a successful conclusion of the Round. Messages stressing both the importance and the urgency of concluding the negotiations have been coming in from all sides, including the highest political levels." For example, in January in Davos, Switzerland, "there was clearly a renewed commitment on all sides to put the Doha Round back on track. All the Ministers present at that meeting supported a quick resumption of full scale activity in the different Negotiating Groups and declared that flexibilities were available within their mandates." He added that "we should not attempt to set ourselves any false deadlines".

2/7. The House Judiciary Committee (HJC) approved HR 740, the "Preventing Harassment through Outbound Number Enforcement (PHONE) Act of 2007", by voice vote.

2/7. The Federal Trade Commission (FTC) released a report [92 pages in PDF] titled "Consumer Fraud and Identity Theft Complaint Data: January - December 2006". See also, FTC release summarizing this report. These annual FTC reports provide data on the number of consumer complaints in numerous categories. For example, the just released report provides data on identity fraud, internet related fraud, internet services, internet auctions, and telecommunications. The 2006 report also contains a large amount of state and local level data. However, while this report provides useful data regarding the numbers of different types of consumer complaints in 2006, these annual provides taken together are of limited value in identifying trends. There is no single data collection project. Rather, the FTC aggregates data from several FTC programs, as well as from other government agency and private sector data collection programs. Moreover, the missions and data collection procedures of some of these programs has changed over the years. Consequently, a category of consumer complaint that appears in one annual report may not be in the next annual report. Also, a review of the FTC's reports shows that even for a given category and year, the data may change from one report to the next. There is also the matter that some consumers may report the same fraud incident to multiple data collectors. As a result, these FTC's annual report have limited value in assessing trends in fraud against consumers, the effects of FTC anti-fraud activities, and the effects of federal legislation.

People and Appointments

2/6. Meredith Baker (nee Attwell) was named Deputy Assistant Secretary for Communications and Information, and Deputy Administrator of the National Telecommunications and Information Administration (NTIA). She has been a Senior Advisor at the NTIA for three years. Before that, she worked at the President's Office of Science and Technology Policy (OSTP). She has also worked for Covad Communications, and for the CTIA. See, NTIA release. John Kneuer remains the head of the NTIA.

2/6. David Murray was named Senior Adviser to John Kneuer, the head of the National Telecommunications and Information Administration (NTIA). Before joining the Department of Commerce in 2005, he worked for the Satellite Broadcasting and Communications Association (SBCA). He has also worked for Winstar Communications, the Personal Communications Industry Association (PCIA), and Rep. Sam Johnson (R-TX). See, NTIA release.

2/6. Todd Sedmak was named Communications Director of the National Telecommunications and Information Administration (NTIA). He was media relations director for American University from 1992 through 2005. See, NTIA release.

Go to News from February 1-5, 2007.