Tech Law Journal Daily E-Mail Alert
Jan 12, 2001, 8:00 AM ET, Alert No. 100.
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107th Congress
1/11. Rep. Fred Upton (R-MI) will be the new Chairman of the Telecom Subcommittee of the House Commerce Committee. Much of the technology related legislation in the House must pass through this subcommittee.
1/11. Senate Commerce Committee announced its membership for the 107th Congress. It has jurisdiction over many high tech related items. Newly appointed members are Barbara Boxer (D-CA), John Edwards (D-SC), and Jean Carnahan (D-MO), Gordon Smith (R-OR), Peter Fitzgerald (R-IL), John Ensign (R-NV), and George Allen (R-VA). The returning members are Ernest Hollings (D-SC), Daniel Inouye (D-HI), Jay Rockefeller (D-WV), John Kerry (D-MA), John Breaux (D-LA), Byron Dorgan (D-ND), Ron Wyden (D-OR), Max Cleland (D-GA), John McCain (R-AZ), Ted Stevens (R-AK), Conrad Burns (R-MT), Trent Lott (R-MI), Kay Hutchison, (R-TX), Olympia Snowe (R-ME), and Sam Brownback (R-KS). Departing members include Bill Frist (R-TN), who left to take another committee assignment, Slade Gorton (R-WA), whose lost his re-election bid, and John Ashcroft (R-MO), who lost his bid for re-election, and is now President Elect Bush's nominee to be Attorney General. McCain will be Committee Chairman; Hollings will be the Ranking Minority Member; and Burns will be Chairman of the Communications Subcommittee. See, release.
1/11. Sen. Maria Cantwell (D-WA) has been appointed to the Senate Judiciary Committee. She is a former Real Networks executive who now represents Microsoft's home state. Sen. Orrin Hatch (R-UT), who will become Chairman after Jan. 20, strongly supports the government's antitrust action against Microsoft. In addition to antitrust matters, the Committee has jurisdiction over immigration (including H1B visas) and crime.
1/11. Sen. Hillary Clinton (D-NY) was appointed to three committees without any significant jurisdiction over technology related issues: Health, Education, Labor and Pensions Committee; Budget; and Environment and Public Works. (The HELP Committee does have some authority over medical privacy issues.)
Va. Computer Crimes Act
1/3. The Free Republic filed a complaint in the Circuit Court of Fairfax County Virginia against   Thomas Chappell Aldridge alleging violation of the Virginia Computer Crimes Act in connection with his hostile postings to a discussion group web site. The Free Republic is a not for profit California corporation which operates a discussion web site for political conservatives and libertarians. It recently lost a copyright infringement lawsuit brought in U.S. District Court (CDCal) titled LA Times v. Free Republic for publishing complete verbatim copies of thousands of news stories from the LA Times and Washington Post. Aldridge, an attorney in Northern Virginia, is a cantakerous writer and flamer who has earned the enmity of Free Republic members for his unorthodox commentary, his ability to assume a multitude of pseudonymous identities, and his skill at evading technological efforts to prevent him from posting. He also supplied an affidavit in the copyright infringement action that the Court relied upon in finding infringement. The complaint against Aldridge pleads six causes of action. Counts 1-4 are based upon the recently enacted Virginia Computer Crimes Act. Count 1 alleges computer trespass. Count 2 alleges theft of computer services. Count 3 alleges harassment by computer. Count 4 alleges injury from unsolicited bulk electronic mail. Count 5 alleges civil conspiracy under Virginia law. Count 6 alleges break of contract (i.e., the web site user agreement). Plaintiff seeks monetary damages and an injunction against posting unauthorized messages on its web site.
New Documents
FCC: summary of AOL Time Warner merger conditions, 1/11 (PDF, FCC).
USCA: Opinion in Lone Star Ladies v. Schlotsky's re PSLRA, 1/11 (HTML, USCA).
Milberg: complaint against VA Linux under federal securities laws, 1/11 (PDF, Milberg).
Updated Sections
Calendar (updated daily).
News from Around the Web (updated daily).
AOL Time Warner Merger
1/11. The FCC approved the merger of AOL and Time Warner with conditions. This FCC proceeding is nominally a license transfer proceeding; the parties applied for radios licenses held by Time Warner to be transferred to the merged entity. However, the proceeding is in the nature of an antitrust merger review, redundant of the review already completed by the FTC, an agency that has statutory authority to conduct antitrust merger reviews. Moreover, the antitrust analysis conducted by the FCC concerned Internet operations, not the radio licenses. The decision was expected. The FCC almost never rejects license transfer requests. Rather, it often withholds its approval of license transfers until it extracts the concessions from the parties that it seeks. The numerous concessions in the matter mostly regulate Internet operations of AOL Time Warner for for which the FCC does not issue licenses: instant messaging (IM), interactive TV, and broadband Internet access over cable facilities. While the FCC has released its own summary [PDF] of its Order approving the merger, a press release, and statements by each of the five Commissioners, it has not released the most important document -- the Order itself.
1/11. The FCC imposed several significant conditions upon its approval of the merger of AOL and Time Warner. AOL Time Warner (AOL) shall not restrict the ability of any current or prospective ISP customers to select and initiate service from any unaffiliated ISP which, pursuant to a contract with AOL, has made its service available over AOL's cable facilities. AOL must permit each ISP to have a direct billing arrangement with those high-speed Internet access subscribers to whom the ISP sells service. AOL's instant messaging (IM) services must interoperate with competing IM providers before it can offer videoconferencing and other streaming video over IM. The FCC's Cable Services Bureau will have continuing oversight authority over the merged company.
1/11. All five FCC Commissioners voted to approve the AOL Time Warner merger, but released separate statements. Chairman Kennard wrote a statement summarizing and defending the FCC's action. He concluded: "With the merger of AOL and Time Warner, we are seeing the creation of a new platform for communications based on the Internet. Our challenge is to make sure that consumers get the full benefits of this new world technology without importing the dangers of monopoly and bottlenecks from the old world. We have met this challenge." Tristani wrote in her statement that she would have taken an even more regulatory approach. She stated that she had "advocated for even more forceful conditions aimed at achieving interoperability" of IM. Furchtgott-Roth wrote in his dissent that the FCC has no legal authority to conduct antitrust merger reviews; hence, he approved of the merger, but dissented from the imposition of conditions. Powell, who is rumored to be President Elect Bush's likely choice to be the next FCC Chairman, wrote the most detailed and reasoned opinion. He stated that "the record and the anticompetitive theory did not support mandating interoperability" of IM. Ness wrote in a brief comment, "You've Got Approval!"
More News Briefs
1/11. President Elect George Bush announced that Robert Zoellick will be new U.S. Trade Representative. He previously worked in the Bush Sr. administration as Deputy Chief of Staff and Under Secretary of State for Economics. He also worked at Treasury Dept. during the Reagan administration. He worked under James Baker. See, State Dept. release. Outgoing USTR Charlene Barshefsky praised Zoellick in a release.
1/11. filed a petition for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court (SDNY).
1/11. James Toupin has been named General Counsel of the USPTO, effective Jan. 28, 2001. He is a former Deputy General Counsel at the USITC. He also was Assistant General Counsel for Litigation and Special Projects at the USITC from 1987 to1994. He previously worked at the law firm of  Memel Jacobs from 1985 to1987, and at Covington & Burling from 1978 to1985. Bernard Knight has been named Deputy General Counsel for General Law of the USPTO. He was previously a Senior Trial Attorney at the Department of Justice. John Whealan has been named Deputy General Counsel for Intellectual Property Law and Solicitor. See, release.
1/11. The NTIA will host a government - industry meeting on Third Generation (3G) wireless services on January 17, 2001. The meeting will be held from 9:30 AM to 12:30 PM in the Polaris Room of the Ronald Reagan Building (Concourse Level), 1300 Pennsylvania Ave.
1/11. ICANN published information about its next round of meetings, to be held in Melbourne, Australia, on March 10-13.
1/11. The National Telecommunications and Information Administration (NTIA) published a notice in Federal Register regarding Technology Opportunity Program (TOP) grants. The NTIA will award $42.5 Million in grants in FY 2001, up from $12 Million in FY 2000. These grants go to state, local, and tribal governments, colleges and universities, and non-profit entities to extend advanced telecommunications technologies to inaccessible, rural and underserved urban communities. See also, NTIA release. The NTIa will host a series of workshops around the country to assist grant applicants. See, NTIA's online registration page.
1/11. The U.S. Court of Appeals (FedCir) heard oral argument in Octel v. Theis. This is an appeal from a final judgment of the U.S. District Court (NDCal) in a patent infringement case. The trial court dismissed on the grounds of res judicata. The court had previously adjudged the patent in suit invalid, the Federal Circuit had affirmed, and the Supreme Court had denied certiorari. But, appellant thinks the original Patent Office determination should carry more weight. The patent concerns voice processing services, such as voice mail.
1/12. Appeal Briefs are due to filed with the U.S. Court of Appeals (DCCir) from the Department of Justice, the states, and amici in support of the government, in the Microsoft antitrust case. See, scheduling order [PDF].
1/12. Sixty small technology companies and the Association for Competitive Technology (ACT) wrote an Open Letter to the 107th Congress and Bush administration regarding the Microsoft antitrust case. They stated: "We're deeply troubled by the potential legacy of the outgoing Justice Department, which could undermine our industry’s future and threaten our nation’s recent economic success. ... Misguided application of antitrust laws, such as the case against Microsoft, ignores the realities of our industry and could create disastrous new rules to govern competitive behavior in the 'new economy.' " the group also published the letter as an advertisement [PDF] in the paper versions of the Washington Post and Wall Street Journal. See also, ACT release.
Securities Litigation
1/11. The U.S. Court of Appeals (5thCir) issued its opinion in Lone Star Ladies v. Schlotsky's reversing the trial court's dismissal of a class action securities complaint for failure to comply with the heightened pleading requirements of the Private Securities Litigation Reform Act (PSLRA). This is not a technology case. Schlotsky's is a restaurant chain. But, the PSLRA was enacted by the Congress in large part to limit frivolous federal class action securities suits against technology companies. Plaintiffs sued Schlostky's and several of its officers and directors alleging violations of federal securities laws, and sought class action status. The U.S. District Court (WDTex) granted defendants' 12(b)(6) motion to dismiss for failure to pleaded facts sufficient to give rise to a strong inference of scienter as required by the PSLRA. The trial court denied plaintiffs' motions to amend complaint, and dismissed with prejudice. Reversed and remanded.

1/11. An individual named Alexander Markaron filed a complaint [PDF] in U.S. District Court (SDNY) against VA Linux, two of its officers and directors, and Credit Suisse First Boston alleging violations of federal securities laws. The plaintiff, who is represented by the law firm of Milberg Weiss, seeks class action status. Count one alleges violation of § 11 of the Securities Act by VA Linux. Count two alleges violation of § 12(a)(2) of the Securities Act by Credit Suisse. Count three alleges controlling person liability for violation of § 15 of the Securities Act by the officers and directors. Count four alleges § 10b and Rule 10b-5 fraud by Credit Suisse. VA Linux provides Linux based software and support services for ASPs, e-commerce companies, and ISPs. Credit Suisse was the lead underwriter in an initial public offering (IPO) of VA Linux shares in December of 1999. Milberg Weiss is a law firm that specializes in bringing class action securities suits against technology companies when their stock prices drop.

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