TLJ News from April 1-5, 2012

Court of Appeals Issues Opinion in Viacom v. YouTube

4/5. A two judge panel of the U.S. Court of Appeals (2ndCir) issued its opinion [39 pages in PDF] in Viacom v. YouTube, affirming in part and vacating the judgment of the U.S. District Court (SDNY).

The District Court granted summary judgment to Google/YouTube on all claims in 2010. It held that the Section 512(c) safe harbor of the Digital Millennium Copyright Act (DMCA) requires knowledge or awareness of specific infringing activity. The Court of Appeals affirmed this. However, the Court of Appeals also vacated for several reasons, reversed other holdings of the District Court, and remanded to the District Court for further proceedings.

This opinion neither provides finality in these proceedings, nor clarity to several legal issues.

No party obtained the holding that it had sought. The Court of Appeals holding has many elements, some of which favor Google/YouTube, and some of which favor Viacom and the other content industry plaintiffs. Moreover, on some issues the Court of Appeals rendered a vaguely worded holding, without articulating a legal standard to be applied by the District Court. Interactive web site operators and rights holders still lack notice as to the precise meaning of DMCA safe harbor.

The Court of Appeals upheld the District Court's holding that the Section 512(c)(1)(A) safe harbor requires knowledge or awareness of specific infringing activity. This is a victory for Google and other companies that make money from advertising on web sites that enable users to upload the copyrighted works of others.

However, the Court of Appeals vacated the summary judgment order because it also held that "a reasonable jury could find that YouTube had actual knowledge or awareness of specific infringing activity on its website". Although, this only applies to a limited list of uploaded videos.

Also, the Court of Appeals held that the willful blindness doctrine may be applied to demonstrate knowledge or awareness of specific instances of infringement under § 512(c)(1)(A). But, the Court of Appeals did not elaborate on what willful blindness means in the context of uploaded infringing content.

Also, the Court of Appeals held that the District Court erred in interpreting the Section 512(c)(1)(B) "right and ability to control" infringing activity to require "item-specific" knowledge. But again, the Court of Appeals opinion lacks elucidation.

Also, the Court of Appeals affirmed the District Court's holding that three of the challenged YouTube software functions fall within the safe harbor for infringement that occurs "by reason of" storage at the direction of the user, and remand for further fact-finding with respect to a fourth software function.

Therefore, the case now goes back to the District Court, where much fact finding and legal interpretation remains to be done. One might also predict that this case will eventually be back before the Court of Appeals.

See, full story.

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4/5. The Office of the U.S. Trade Representative (OUSTR) released a report [17 pages in PDF] titled "2012 Section 1377 Review On Compliance with Telecommunications Trade Agreements".

4/5. The U.S. Patent and Trademark Office (USPTO) announced in a release that the USPTO and the Hungarian Intellectual Property Office (HIPO) signed a Memorandum of Understanding making permanent the Patent Prosecution Highway (PPH) program between the two offices. The USPTO also explained that under the PPH program, "an applicant receiving a ruling from the Office of First Filing (OFF) that at least one claim in an application filed in the OFF is patentable may request that the Office of Second Filing (OSF) fast track the examination of corresponding claims in corresponding applications filed in the OSF."

4/5. The National Telecommunications and Information Administration (NTIA) released another quarterly report on the Broadband Technology Opportunities Program (BTOP), the $4.7 Billion grant program funded by HR 1 [LOC | WW], the huge spending bill enacted in February of 2009.

4/5. President Obama signed into law HR 3606 [LOC | WW], the "Jumpstart Our Business Startups Act", a bill to reduce regulatory barriers to capital formation by small and start up companies. See, White House news office release. It is now Public Law No. 112-106.

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4/4. President Obama signed into law S 2038 [LOC | WW], the "Stop Trading on Congressional Knowledge Act of 2012", or "STOCK Act". See, White House news office release. It is now Public Law No. 112-105.

4/4.Yahoo announced in a release that "approximately 2,000 people will be notified of job elimination or phased transition".

4/4. European Trade Commissioner Karel De Gucht issued a release regarding the status of the referral of the Anti-Counterfeiting Trade Agreement (ACTA) to the European Court of Justice (ECJ). It states that "The legal submission agreed by the College of Commissioners today is a broad legal question which will allow the European Court of Justice a detailed examination of whether ACTA is in line with European Fundamental Rights such as the freedom of expression and information or data protection and the right to property including that of intellectual property. The question which has been agreed upon unanimously is: ``Is the Anti-Counterfeiting Trade Agreement (ACTA) compatible with the European Treaties, in particular with the Charter of Fundamental Rights of the European Union?´´". De Gucht also urged the European Parliament to wait for the ECJ opinion before determining its own position.

4/4. The National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) released its draft NIST IR 7511 Rev. 3.01.165 [47 pages in PDF] titled "Security Content Automation Protocol (SCAP) Version 1.0 Validation Program Test Requirements". The deadline to submit comments is April 20, 2012.

2nd Circuit Applies Sherman Act § 1 in Magazine Industry Case

4/3. The U.S. Court of Appeals (2ndCir) issued its opinion [45 pages in PDF] in Anderson News v. American Media, an antitrust boycott case brought under Section 1 of the Sherman Act, 15 U.S.C. § 1, by a wholesaler in the single copy magazine industry, which involvesselling ink on paper magazines for purchase by consumers at retail outlets such as newsstands and bookstores.

This case pertains to hard copy publishing and distribution, and not to internet based distribution of magazines.

Anderson, and its assignee for the benefit of creditors, filed a complaint in the U.S. District Court (SDNY) against national magazine publishers and their distribution representatives. The magazine publisher defendants are American Media, Bauer, Hachette, Rodale, and Time. The distribution defendants include Curtis Circulation Co, Distribution Service Inc., Kable Distribution Services Inc. and Time/Warner Retail Sales & Marketing, Inc. The complaint also named Hudson News Distributors LLC, another wholesaler.

The complaint alleges conspiracy by the defendants to cut off Anderson from its supply of magazines, which deprived it of 80 percent of the magazines it had distributed, and forced it to suspend its magazine wholesale business. The complaint alleges that this followed Anderson's efforts to shift from a system under which wholesalers both delivery magazines to retailers, and then retrieve, tabulate and destroy unsold copies, to a scan based trading system under which retailers would automatically report their sales to the publishers through use of electronic checkout scanners, and the retailers would destroy all magazines they had not sold. Most hard copy magazines printed for the single copy magazine industry go unsold, and are destroyed.

The District Court concluded that the complaint failed to set forth sufficient facts to raise a plausible suggestion that the purported parallel conduct stemmed from an agreement. The District Court dismissed the complaint, without leave to amend, for failure to state a claim, pursuant to Rule 12(b)(6), FRCP. See, 732 F.Supp.2d 389.

The Court of Appeals vacated and remanded. It held that Anderson's proposed amended complaint meets the pleading standards set by Twombly and Iqbal. See, Twombly opinion and story titled "Supreme Court Rules in Bell Atlantic v. Twombly" in TLJ Daily E-Mail Alert No. 1,585, May 22, 2007.

This case is Anderson News LLC v. American Media, Inc., et al., U.S. Court of Appeals for the 2nd Circuit, App. Ct. No. 10-4591-cv, an appeal from the U.S. District Court for the Southern District of New York, Judge Paul Crotty presiding. Judge Amalys Kearse wrote the opinion of the Court of Appeals, in which Judges Leval and Chin joined.

USCC Reports on PRC's Anti-Satellite Capabilities

4/3. The U.S. China Economic and Security Review Commission, which is also known as the USCC, released a report titled "Indigenous Weapons Development in China's Military Modernization". One section addresses the People's Republic of China's (PRC) anti-satellite missile program, and other technologies for destroying or disrupting US satellites.

The report concludes that "China could execute capabilities that undermine or complicate U.S. access to space in the event of a conflict". Moreover, this "has immense strategic implications for U.S. space capabilities. The reliance of the United States on space assets for intelligence, surveillance, and reconnaissance; communication; navigation; and positioning creates a particular vulnerability to attacks".

It discusses a PRC test in 2007 in which an anti-satellite, or ASAT, missile destroyed a PRC weather satellite.

The report also states that "China's intended approach is to continue to develop ground-based kinetic kill vehicles (e.g., the SC-19 ASAT), as well as lasers and a variety of jammers and other electromagnetic spectrum disruption hardware." (Parentheses in original.)

The report also states the the PRC "is also simultaneously attempting -- sometimes in concert with Russia -- to limit the space power of the United States and other potential competitor nations by repeatedly proposing arms control agreements that would limit the ``weaponization of and an arms race in outer space´´ by restricting space-based platforms, but that would not regulate ground-based anti-space platform capabilities."

Also, "Increased military expenditures catalyzed by hypothetical Taiwan scenarios, conflicting territorial claims, and geopolitical competition in the Asia-Pacific region contribute to the speed of procurement, development -- and, ultimately, field deployment -- of more advanced indigenous Chinese weapons systems."

This report focuses on the military threat. However, it also notes that the PRC's 2007 ASAT missile test was "history's greatest single instance of human-created space debris".

The report also addresses the PRC's development of submarines, stealth fighter jets, and anti-ship ballistic missiles.

Strickling Writes FCC Regarding FirstNet

4/3. Lawrence Strickling, head of the Department of Commerce's (DOC) National Telecommunications and Information Administration (NTIA) sent a letter to the Federal Communications Commission (FCC) regarding the establishment of a "First Responder Network Authority", as required by the spectrum bill enacted in February of this year.

Lawrence StricklingStrickling (at right) wrote that the DOC and NTIA "are working to implement the Act's directives as expeditiously as possible.

He added that "we encourage the Commission to work with dispatch to reallocate the D Block spectrum and prepare the 700 MHz spectrum license for grant to FirstNet as soon as possible. NTIA will notify you when FirstNet is prepared to accept the Commission's grant of the 700 MHz license."

Schedule Set for Technical Advisory Board for First Responder Interoperability

4/3. The Federal Communications Commission (FCC) released a Public Notice regarding the work of its Technical Advisory Board for First Responder Interoperability. It will hold its first meeting on April 26, 2012, at 8:30 AM - 12:30 PM at the FCC. It will issue its report by May 22, 2012.

April 13, 2012 is the deadline to submit requests to make presentations at the April 26 event. April 20 is the deadline to pre-register to attend the event.

Title VI of HR 3630 [ LOC | WW], the spectrum bill enacted into law in February, provides for reallocation of the D Block for an interoperable public safety broadband network. It also provides for the creation of this Interoperability Board. This bill is now Public Law No. 112-96.

Section 6203 of this act provides that "Not later than 90 days after the date of enactment of this Act, the Interoperability Board, in consultation with the NTIA, NIST, and the Office of Emergency Communications of the Department of Homeland Security, shall -- (A) develop recommended minimum technical requirements to ensure a nationwide level of interoperability for the nationwide public safety broadband network; and (B) submit to the Commission for review in accordance with paragraph (3) recommended minimum technical requirements described in subparagraph (A)."

FCC Chairman Julius Genachowski appointed the members of this Interoperabilty Board on March 22. See, Public Notice.

For more on this bill, see stories titled:

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4/3. The European Commission (EC) announced in a release that it has "opened two formal antitrust investigations against Motorola Mobility Inc." regarding whether this recent acquisition of Google "has abusively, and in contravention of commitments it gave to standard setting organisations, used certain of its standard essential patents to distort competition".

4/3. The Media Access Project (MAP) announced that it will suspend its operations effective May 1, 2012.

ACLU Reports on Cell Phone Tracking

4/2. The American Civil Liberties Union (ACLU) published in its web site a large number of freedom of information act (FOIA) requests that it submitted to local law enforcement agencies around the US, and the responses that it received. These requests and responses pertain to electronic surveillance, and especially, cell phone tracking.

The ACLU also issued a short release, and a report [7 pages in PDF] titled "ACLU Affiliate Nationwide Cell Phone Tracking Public Records Requests: Findings and Analysis". See also, ACLU web page with hyperlinks to requests and responses.

This report finds that "The overwhelming majority of law enforcement agencies that responded engage in at least some cell phone tracking. Most law enforcement agencies that responded engage in cell phone tracking for investigative purposes. Even those that have not tracked cell phones in the course of a criminal investigation have tracked cell phones in emergencies, for example to locate a missing person. A few law enforcement agencies stated that they have never tracked cell phones."

The report also states that some law enforcement agencies, including those of Wichita, Kansas, and Lexington, Kentucky, "require a warrant and probable cause to track cell phones for investigative purposes". However, most proceed with less.

The ACLU's Catherine Crump stated in the ACLU release that "What we have learned is disturbing. The government should have to get a warrant before tracking cell phones. That is what is necessary to protect Americans' privacy, and it is also what is required under the Constitution ... The fact that some law enforcement agencies do get warrants shows that a probable cause requirement is a completely reasonable and workable policy, allowing police to protect both public safety and privacy."

Crump is one of the attorneys who signed an amicus curiae brief filed with the U.S. Court of Appeals (5thCir) last month in the case titled In the Matter of the Application of the United States of America for Historical Cell Site Data. See, related story in this issue titled "Groups File Amicus Briefs Regarding Warrantless Seizure of Historical Cell Site Location Data".

Also, the ACLU report states that "While most law enforcement agencies report relying on cell phone companies to track their customers, some have purchased their own cell tracking technology."

The ACLU report notes that wireless services providers are holding data for a long time, and making lots of money from selling access to it to law enforcement agencies.

Center for Copyright Information Names Executive Director and Advisory Board Members

4/2. The Center for Copyright Information (CCI) announced the appointment of Jill Lesser as its Executive Director. See, CCI release.

The CCI also announced members of its Advisory Board: Jerry Berman (Center for Democracy and Technology), Marsali Hancock (iKeepSafe.org), Jules Polenetsky (Future of Privacy Forum), and Gigi Sohn (Public Knowledge).

The CCI is governed by a six member Executive Committee, comprised of three representatives each from the content and BIAS industries: Thomas Dailey (Verizon Communications), Steven Marks (Recording Industry Association of America), Marianne Grant (Motion Picture Association of America), Alan Lewine (Comcast), Daniel Mandil (Viacom), and Brent Olson (AT&T).

Broadband internet access service (BIAS) providers, major movie and record industry companies, and their trade groups announced an agreement [36 pages in PDF] titled "Memorandum of Understanding" in July of 2011 that establishes a Copyright Alert System (CAS).

This is a detailed set of procedures for notifying alleged online peer to peer infringers of their infringing activity, and affording alleged infringers of an opportunity for a non-judicial review. The agreement references, but does not require, suspension or termination of internet access. This agreement also provides for the creation of the CCI.

See also, story titled "BIAS Providers and Content Industries Announce Copyright Alert System" in TLJ Daily E-Mail Alert No. 2,254, July 8, 2012.

The CCI also announced that it has retained the American Arbitration Association (AAA) to implement the independent review process.

Gigi Sohn, a member of the CCI Advisory Board, stated in a release that "I still have concerns about some of the points in the agreement to establish the CAS. One of the most prominent is the threat that consumers could have their access to the Internet cut off. I will ask at the appropriate time for the ISPs to promise not to interpret the agreement’s ‘temporary restriction’ provision as allowing for suspension of user Internet accounts."

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4/2. The Office of the U.S. Trade Representative (OUSTR) released a report [420 pages in PDF] titled "2012 National Trade Estimate Report on Foreign Trade Barriers".

4/2. The Federal Communications Commission (FCC) published a notice in the Federal Register (FR) that sets comment deadlines for its Notice of Proposed Rulemaking (NPRM) regarding interoperability in the 700 MHz bands. Initial comments are due by June 1, 2012. Reply comments are due by July 16, 2012. The FCC adopted and released this NPRM on March 21, 2012. It is FCC 12-31 in WT Docket No. 12-69. See, FR, Vol. 77, No. 63, Monday, April 2, 2012, at Pages 19575-19589. See also, stories titled "FCC Adopts NPRM on Interoperability in 700 MHz Bands" and "Reaction to FCC NPRM on Interoperability in 700 MHz Bands" in TLJ Daily E-Mail Alert No. 2,353, March 22, 2012.

4/2. The U.S. Patent and Trademark Office (USPTO) announced in a release that it will open the Patent Law School Clinic Certification Pilot Program to admit ten more law schools for the Fall 2012 academic year.

4/2. The U.S. Patent and Trademark Office (USPTO) announced in a release the start of its After Final Consideration Pilot (AFCP). The USPTO stated that the AFCP "authorizes a limited amount of non-production time for examiners to consider responses filed after a final rejection. USPTO seeks to determine if authorizing this time will increase the number of applications that are allowed at that point in prosecution and reduce the number of Requests for Continued Examination (RCEs)."

Maryland Senate Passes Bill to Protect Employee Passwords for Social Media

4/1. The Senate of the state of Maryland passed Senate Bill 443, a bill regarding employer demands for employees' social media passwords.

This bill provides that "an employer may not request or require that an employee or applicant disclose any user name, password, or other means for accessing a personal account or service through an electronic communications device". However, an employer may demand user names or passwords that provide access to the employer's internal computer or information systems.

The U.S. House of Representatives briefly discussed this issue during floor consideration of HR 3309 [LOC | WW], the "Federal Communications Commission Process Reform Act of 2012". See, story titled "House Rejects Motion Pertaining to Employer Demands for Employee Passwords for Social Networking Sites", and related stories, in TLJ Daily E-Mail Alert No. 2,361, March 30, 2012.

Global Payments Discloses Data Breach

4/1. Global Payments, Inc., which provides electronic transaction processing services, stated in a March 30, 2012, release that " it identified and self-reported unauthorized access into a portion of its processing system."

It elaborated that "In early March 2012, the company determined card data may have been accessed. It immediately engaged external experts in information technology forensics and contacted federal law enforcement. The company promptly notified appropriate industry parties to allow them to minimize potential cardholder impact."

It stated in an April 1 release that "The company believes that the affected portion of its processing system is confined to North America and less than 1,500,000 card numbers may have been exported. The investigation to date has revealed that Track 2 card data may have been stolen, but that cardholder names, addresses and social security numbers were not obtained by the criminals. Based on the forensic analysis to date, network monitoring and additional security measures, the company believes that this incident is contained."

Rep. Mary Mack (R-CA) stated in a release that "This latest online assault on tens of thousands of American consumers brings into sharp focus the urgent need for Congress to pass data security legislation this year. I am strongly urging House leaders to include my Secure and Fortify Electronic (SAFE) Data Act -- passed out of my subcommittee last year -- as part of the broader cybersecurity debate which we will be taking place in the coming weeks. The time to act is now."

See also, stories titled "Rep. Mack Introduces SAFE Data Act" and "House Commerce Committee to Mark Up SAFE Data Act" in TLJ Daily E-Mail Alert No. 2,363, July 19, 2011.

Numerous pending bills address data security and data breaches. See for example:

Go to News from March 26-31, 2012.