Tech Law Journal Daily E-Mail Alert
Jan. 4, 2001, 8:00 AM ET, Alert No. 94.
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107th Congress
1/3. The House of Representatives of the 107th Congress convened. Members took the oath of office. Rep. Denny Hastert (R-IL) was elected Speaker. The House Republican Conference selected Rep. Dick Armey (R-TX) to be Majority Leader and Rep. Tom DeLay (R-TX) to be Majority Whip. The House Democratic Caucus selected Rep. Dick Gephardt (D-MO) to be Minority Leader and Rep. David Bonior (D-MI) to be Minority Whip. These developments were expected.
1/3. Outgoing Vice President Al Gore swore in newly elected members of the Senate. The Senate is now divided 50 50 between Republicans and Democrats. Until Jan. 20, when Dick Cheney is sworn in as Vice President, Al Gore casts tie breaking votes in the Senate. Hence, Democrats are in control of the Senate. At the Jan. 4 confirmation hearing of Donald Evans (to be Secretary of Commerce) Sen. Ernest Hollings (D-SC) will preside.
1/4. House Republicans may create a new Financial Services Committee. The move would affect technology related legislation. The reasons for creating a new committee are partly practical and partly political. The new committee would combine the existing House Banking Committee with the Finance Subcommittee of the House Commerce Committee, which has jurisdiction over securities. The new committee would have authority over all of the converging financial industries of banking, securities and insurance. The political reason for the move is that there are contests for the Chairmanships of both the Banking and Commerce Committees. No strong candidate has emerged for the Banking position, while there are two strong and popular candidates for the Commerce position -- Rep. Mike Oxley (R-OH), who now chairs the Finance Subcommittee, and Rep. Billy Tauzin (R-LA), who now chairs the Telecom Subcommittee. This reshuffling would give both men chairmanships. If created, the new Financial Services Committee would likely emerge with authority over financial privacy issues, securities litigation reform, and bringing the New Deal era prospectus based securities laws into the age of the Internet. The Commerce Committee would retain authority over telecommunications, electronic commerce, and most Internet related issues, as well as oversight of the FCC and FTC. Oxley, who would chair the new committee, is an ex FBI agent who has been one of the leading opponents of liberalization of encryption laws, and one of the leading proponents of bills to ban online indecency. Putting him in charge of the new committee would distance him from these two issues.
1/3. The Information Technology Association of America (ITAA) sent a letter to Sen. Orrin Hatch (R-UT) and Sen. Patrick Leahy (D-VT), the Chairman and Ranking Member of the Senate Judiciary Committee, urging confirmation of John Ashcroft to be Attorney General. The letter cited Ashcroft's bi-partisan leadership on technology issues such as encryption, intellectual property rights and domain names while serving in the Senate. Quote: "Ashcroft’s nomination is a win-win because he has impeccable legal credentials and a strong grasp of high tech policy. We urge swift confirmation ..." Ashcroft lost his bid for re-election last November. The Committee has not yet scheduled its confirmation hearing. Ashcroft faces opposition on non technology related grounds. For example, People for the American Way released a statement condemning his position on abortion. Other groups raise his record on "civil rights". See also, Sen. Hatch's statement of Dec. 22 regarding Ashcroft. Quote: "President-elect Bush has made an excellent choice in John Ashcroft ..."
News Briefs
1/3. Cal. Gov. Gray Davis named John Stevens to the California Public Utilities Commission on an interim basis. See, Davis release.
1/3. Outgoing President Bill Clinton made another recess appointment. He appointed Dennis Devaney as a Commissioner of the United States International Trade Commission (ITC). The ITC is a quasi-judicial independent federal agency. It administers U.S. trade law remedies, including Section 337 (Investigations of Infringements of Patents, Trademarks, Copyrights, or Mask Works, and Other Unfair Practices in Import Trade). See, summary of USITC statutes relating to import relief [21 pages in PDF]. See also, Clinton release.
1/3. A complaint was filed in U.S. District Court (DDC) against Microsoft alleging racial discrimination in compensation and promotion practices. Plaintiff, who is represented by Willie Gary, seeks class action status. Deborah Willingham, MSFT VP for Human Resources, had this to say in a release: "Microsoft has a zero tolerance policy toward discrimination in the workplace. We take any allegations of discrimination very seriously, and immediately investigate any concern that is raised."
1/2. The USPTO put online the Dec. 2000 issue of USPTO Today. It includes an article titled The Evolution of the Business Method Patent and Update on the Business Method Action Plan (at pages 8-10, by Wynn Coggins). It concludes that "Computers and the Internet have created an information age that is truly revolutionizing how we function as a society. New technologies are constantly emerging that didn’t exist three weeks ago, and developers in these areas don’t always recognize the need to protect their discoveries. Thus, traditional patent search strategies need to be enhanced to meet future needs in these growing technology areas, and USPTO is working to bridge the gap with industry and work together to make this happen. With the help of the partnership organizations, concerns about the quality of the searches being performed by patent examiners and the examiner knowledge base on which they have to make decisions on patentable subject matter are being aggressively addressed. The business method patent phenomenon translates to progress. It is an example of the evolution the patent process is undergoing to keep pace in today’s technology and information age." Several members of Congress would like to pass legislation that changes the business methods patent process. See, for example, HR 5364 IH (106th Congress).
1/3. The SEC filed a complaint in U.S. District Court (DDC) against a Colleen Millsap alleging insider trading. Millsap, a former CFO of digitalNATION, a dedicated server web hosting company, engaged in illegal insider trading in the securities of Verio prior to Verio's acquisition of digitalNATION on July 13, 1999. Millsap also consented to entry of judgment against her. See, SEC release.
12/29. The U.S. District Court (SDNY) issued a permanent injunction against Internet stock trader In Shig Ahn. This order merely prevents Ahn from committing future violations of federal securities laws. Previously, Ahn disgorged ill gotten gains, and plead guilty in a parallel criminal action for securities fraud and wire fraud. This was Ahn's scam: he opened an online account with Terra Nova (TN) with $351,950 in bad checks. He also opened a second online account with Interactive Brokers (IB), and set up an electronic communications network. Before his bad checks could bounce, he traded between his two online accounts, intentionally creating losses in the TN account and corresponding gains in the IB account. Before he could withdraw his gains from the IB account, IB froze his account, the checks bounced, and the SEC and U.S. Attorneys Office filed civil and criminal proceedings against him. (SEC v. In Shig Ahn, Case No. 00 Civ. 4416 (RCC), filed June 15, 2000.) See, SEC release.
12/20. The U.S. District Court (SDNY) ordered six defendants to pay disgorgement, interest and penalties totaling $581,117 in a major insider trading case arising out of IBM's 1995 takeover of Lotus. (SEC v. Lorraine K. Cassano, Case No. 99-CV-3822.) See, SEC release.
10:00 AM. The Senate Commerce Committee will hold a hearing on the nomination of Donald Evans to be Secretary of Commerce. Sen. Ernest Hollings (D-SC) will preside. The scheduled witnesses are Sen. Kay Hutchison (R-TX), Sen. Phil Gramm (R-TX), and Donald Evans. Location: Room 253, Russell Senate Office Building.
The Wall Street Journal, and its Opinion Journal web site (free access), published a scathing criticism of regulatory policies that have slowed broadband deployment, and obstructed the New Economy. The Jan. 4 editions comment that "the process of bringing "digital subscriber line" to Baby Bell customers has become a regulatory morass. Another pathway, cable modem, has been held up as AT&T and Time Warner fight "open access" battles in the courts and in Washington. Wireless holds out another avenue, but depends on the FCC doling out licenses to use the airwaves. Nor did it help that the Justice Department shot down an attempt to merge WorldCom ... Sprint ... Indeed, at every step of the much- needed consolidation and restructuring of the telecommunications industry, the Clinton Administration's antitrust regulators have stood in the way as they pursue their own fantasies of how to engineer an ideal level of 'competition.' Accompanying these interventions is the vague suggestion that technology is creating new 'monopolies.' But this reflects parochial bureaucratic interests more than economic logic."
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