TLJ News from May 21-25, 2012

DHS to Host Privacy Workshop

5/25. The Department of Homeland Security's (DHS) Privacy Office will host a one day event on June 20 titled "Privacy Compliance Workshop".

The DHS stated in a notice in the Federal Register (FR) that this event will "provide in-depth training on the privacy compliance process at DHS. The morning session will consist of overview presentations, including the privacy compliance fundamentals, privacy and data security, and the privacy compliance life cycle. A learning lunch will provide attendees with the opportunity to interact with compliance experts at DHS. The afternoon sessions will cover advanced presentations, including the Paperwork Reduction Act, the Freedom of Information Act, Privacy Compliance Reviews, and program case studies."

This event is free and open to the public. It will be held at the FTC satellite building. The deadline to register is 5:00 PM on Friday, June 15. See, FR, Vol. 77, No. 102, Friday, May 25, 2012, at Page 31371.

People and Appointments

Austin Schlick5/25. The Federal Communications Commission (FCC) announced in a release that Austin Schlick (at left) "will step down as General Counsel, effective mid-June" and that Sean Lev, who is currently Deputy General Counsel and Special Advisor to the Chairman, will become General Counsel. Lev has held positions at the FCC and Department of Energy (DOE) during the Obama administration. Previously, he worked at the Washington DC law firm of Kellogg Huber. Schlick also previously worked at Kellogg Huber.

Ruth Milkman5/25. The Federal Communications Commission (FCC) announced in a release that Rick Kaplan "will step down" in "mid-June" as Chief of the FCC's Wireless Telecommunications Bureau (WTB), and that Ruth Milkman (at right), who was Chief of the WTB prior to Kaplan, and is currently Special Counsel to the Chairman for Innovation in Government, will return to the position of Chief of the WTB.

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5/25. The Copyright Office (CO) published a notice in the Federal Register (FR) in which it announces, describes, recites, and sets the comment deadline for, its proposed rules changes regarding the filing of notices of intention to obtain a compulsory license, pursuant to 17 U.S.C. 115. The CO proposes to provide an option for electronically filing the notice. Comments are due by 5:00 PM on July 9, 2012. See, FR, Vol. 77, No. 102, Friday, May 25, 2012, at Pages 31237-31240.


Representatives Ask Twitter About it Collection and Use of Personally Identifiable Information

5/24. Rep. Joe Barton (R-TX) and Rep. Cliff Stearns (R-FL) sent a letter to Dick Costolo, CEO of Twitter, regarding its collection, use, storage and deletion of personally identifiable information (PII) of Twitter users.

The two wrote that Twitter recently announced that it will provide "tailored suggestions for you to follow on Twitter". They added that "we would like to inquire about the data collection and practices regarding Twitter's experiments to provide tailored suggestions to its users".

The two Representatives then propounded numerous interrogatories to be answered by June 15, 2012.

They ask, or example, that Twitter describe all PII that it collects, how it is collected, how it is stored, and how long it is stored. They also ask Twitter to describe how it will provide users a list of other user accounts that Twitter recommends for following.

The letter praises the company, and includes no allegations of wrongdoing.

People and Appointments

5/24. The Senate confirmed Frank Kendal to be Under Secretary of Defense for Acquisition, Technology, and Logistics. See, Congressional Record, May 24, 2012, at Page S3660.

5/24. The Department of Justice (DOJ) released a heavily redacted copy [686 pages in PDF] of a report written by the DOJ that pertains to prosecutorial misconduct by the DOJ in its prosecution of former Sen. Ted Stevens (R-AK). Sen. Charles Grassley (R-IA), the ranking Republican on the Senate Judiciary Committee (SJC), stated in a release that "If the Justice Department isn't getting a big case such as this right, it begs the question of what is happening in courts across the country every day." Sen. Patrick Leahy (D-VT), Chairman of the SJC, stated in a release that the SJC will hold a hearing on this matter on June 6.

5/24. The Senate Judiciary Committee (SJC) held an executive business meeting at which it held over consideration of five judicial nominees: Robert Bacharach (to be a Judge of the U.S. Court of Appeals for the 10th Circuit), Paul Grimm ( U.S. District Court for the District of Maryland), John Dowdell (USDC/NDOkla), Mark Walker (USDC/NDFl), and Brian Davis (USDC/MDFl). All five are again on the agenda for the SJC's executive business meeting scheduled for June 7, 2012. See, notice.


Phoenix Center Defends BIAS UBP

5/23. The Phoenix Center for Advanced Legal & Economic Public Policy Studies released a paper [6 pages in PDF] regarding usage based pricing (UBP) by broadband internet access service (BIAS) providers. It is titled "A Most Egregious Act? The Impact on Consumers of Usage-Based Pricing". The author is the Phoenix Center's George Ford.

The paper responds to the April 23, 2012, Public Knowledge (PK) paper titled "Know Your Limits: Considering the Role of Data Caps and Usage Based Billing in Internet Access Service". That paper praised flat rate price plans, and criticized both UBP plans and data caps on flat rate plans. See also, story titled "Public Knowledge Paper Urges FCC Oversight of BIAS Pricing Plans" in TLJ Daily E-Mail Alert No. 2,380, April 25, 2012.

This Phoenix Center paper states that "When a resource is socially valuable, like capacity on a broadband network, the price system should discourage its careless use."

It then states that some "claim that usage-based pricing options are anticompetitive and anti-consumer and thereby justify the price regulation of broadband services by the Federal Communications Commission"

It then argues that "regulatory oversight may not improve well-being even in a case that the proponents of regulation would describe as an egregious example of anticompetitive conduct by broadband providers." Given this, and valid  economic and business reasons for UBP, this paper concludes that "regulatory oversight of usage-based pricing is unlikely to improve social well-being".

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James Cole5/23. James Cole (at right), the Deputy Attorney General, gave a speech at an awards ceremony in Washington DC. He stated that the Department of Justice's (DOJ) Internet Crimes Against Children Task Force Program "is going strong and is continuing to realize remarkable success in solving technology-facilitated crimes against children. What began as a small, loose-knit program years ago has grown into highly-trained, coordinated and effective network of 61 task forces." He also discussed in some detail one case involving online child pornography.


FTC/DOJ File Amicus Brief on Antitrust Standing of Direct Purchasers Who Allege Fraud Upon USPTO

5/22. The Federal Trade Commission (FTC) and the Department of Justice's (DOJ) Antitrust Division filed an amicus curiae brief with the U.S. Court of Appeals (FedCir) in Ritz Camera & Image v. SanDisk, in support of Ritz.

SanDisk made flash memory products, which Ritz and others purchased. Ritz and the others filed a complaint in the U.S. District Court (NDCal) against SanDisk alleging monopolization in violation of Section 2 of the Sherman Act, which is codified at 15 U.S.C. 2.

The plaintiffs' complaint alleges fraud on the U.S. Patent and Trademark Office (USPTO) by intentionally failing to disclose invalidating prior art and by making affirmative misrepresentations to the USPTO, subsequent enforcement of fraudulently obtained patents, and harm to competition by the charging of monopoly prices.

At issue is the the circumstances in which Section 4 of the Clayton Act, which is codified at 15 U.S.C. 15, authorizes direct purchasers to recover overcharge damages resulting from a monopoly obtained and maintained through enforcement of a fraudulently procured patent.

See, full story.

People and Appointments

5/22. Google completed its acquisition of Motorola Mobility. Larry Page, CEO of Google, stated in a release that Sanjay Jha, "who was responsible for building the company and placing that big bet on Android, has stepped down as CEO", and that Google's Dennis Woodside has replaced him. See also, stories titled "DOJ Closes Investigations of Transactions Involving Communications Patents", "EC Approves Google Acquisition of Motorola Mobility", and "EC's Almunia Addresses Patents and Communications Standards" in TLJ Daily E-Mail Alert No. 2,335, February 13, 2012, and story titled "Google to Acquire Motorola Mobility" in TLJ Daily E-Mail Alert No. 2,290, August 15, 2011.


SEC Alleges Insider Trading by Former Yahoo Executive

5/21. The Securities and Exchange Commission (SEC) filed a civil complaint in the U.S. District Court (SDNY) against Reema D. Shah and Robert W. Kwok, alleging violation of Section 10b of the Securities Exchange Act of 1934, and Rule 10b-5, in connection with insider trading of Yahoo stock. The Department of Justice (DOJ) initiated a related criminal proceeding.

Kwok previously worked for Yahoo as Senior Director of Business Management.

The complaint alleges that "Kwok tipped Shah material, nonpublic information that an internet search engine partnership agreement between Yahoo and Microsoft ..., which had long been the subject of market rumors, would be announced soon. Shah was a portfolio manager for multiple mutual funds and hedge funds at RiverSource", and that this led to the purchase of "approximately 700,000 shares of Yahoo".

The one count complaint also alleges that "On a separate occasion, in April 2008, Shah tipped Kwok material, nonpublic information she had received concerning an upcoming acquisition of Moldflow Corp. by Autodesk, Inc. Based on that inside information, Kwok purchased 1,500 shares of Moldflow in a personal account."

The SEC also announced in a release that Shah and Kwok "have agreed to settle the SEC's charges. Financial penalties and disgorgement will be determined by the court at a later date. Under the settlements, Shah will be permanently barred from the securities industry and Kwok will be permanently barred from serving as an officer or director of a public company."

The SEC added that "In a parallel criminal case announced today by the U.S. Attorney's Office for the Southern District of New York, Kwok has pled guilty to conspiracy to commit securities fraud, and Shah has pled guilty to both a primary and conspiracy charge. Both are awaiting sentencing."

This case is SEC v. Reema D. Shah and Robert W. Kwok, U.S. District Court for the Southern District of New York, D.C. No. 12-CV-4030.

Senate Confirms Watford for 9th Circuit

5/21. The Senate confirmed Paul Watford to be a Judge of the U.S. Court of Appeals (9thCir) by a vote of 61-34. See, Roll Call No. 104. All of the no votes were cast by Republicans.

Watford is atypical of judicial nominees to the extent that he has significant experience in several technology related areas of law. As a partner in the Los Angeles office of the law firm of Munger Tolles & Olson he represented clients in appellate proceedings. For example, he represented Rambus in patent and antitrust litigation, defended Verizon in phone bill cramming litigation, and represented Jeppesen DataPlan in a landmark state secrets privilege case.

For a more detailed review of his technology related work, see story titled "Senate Judiciary Committee Approves Watford for 9th Circuit" in TLJ Daily E-Mail Alert No. 2,334, February 10, 2012.

Sen. Patrick Leahy (D-VT) stated in the Senate on May 21 that Watford is "a highly regarded appellate litigator in private practice", who "has worked at a highly respected Los Angeles law firm on a wide variety of matters". The floor debate on this nomination is transcribed at Congressional Record, May 21, 2012, Pages S3307 - S3316.

Sen. Dianne Feinstein (D-CA) noted his representation of Rambus, and also stated that "The general counsels of leading American corporations, including Google, Mattel, Verizon, and CIRCOR, have also written in support of Mr. Watford".

Sen. Leahy placed in the record a copy of a letter of support, signed by, among others, Randal Milch, EVP and General Counsel of Verizon Communications, and Kent Walker, SVP and General Counsel of Google.

Sen. Charles Grassley (R-IA) spoke in opposition, citing Watford's views on "immigration and the death penalty". No Senator criticized Watford's work in tech related cases.

Sen. Grassley Wants Judges to Meet on Skype Rather Than on Maui

5/21. Sen. Charles Grassley (R-IA), the ranking Republican on the Senate Judiciary Committee (SJC), and Sen. Jeff Sessions (R-AL) sent at letter, with interrogatories, to Chief Judge Alex Kozinski of the U.S. Court of Appeals (9thCir) regarding the 9th Circuit's practice of holding conventions, at taxpayer expense, in posh resort hotels in Hawaii, rather than via Skype.

Sen. Charles GrassleyThe 9th Circuit has a conference scheduled for August on the island of Maui. Sen. Grassley (at right) stated in a release that "Technology is so advanced that people are earning college degrees online and soldiers serving halfway across the world use Skype with their families at home".

He added that "a judicial circuit court should be capable of using technology to share information without requiring a trip to an island paradise. It's especially tone-deaf to plan a pricey conference after the GSA debacle. The taxpayers can't sustain this kind of spending, and they shouldn't have to. The court should re-examine whether this is the best use of tax dollars."


Go to News from May 16-20, 2012.