Tech Law Journal Daily E-Mail Alert
Feb. 15, 2001, 8:00 AM ET, Alert No. 124.
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Napster Hearings
2/14. Sen. Orrin Hatch (R-UT) made statement in the Senate regarding the opinion [PDF] of the U.S. Court of Appeals (9thCir) in A&M Records v. Napster. He stated that "the Judiciary Committee will need to hold hearings on the decision's possible implications and to get an update on developments in the online music market." He added that "I know that people in Congress are weighing various legislative solutions ..." Sen. Hatch is the Chairman of the Senate Judiciary Committee, which has jurisdiction over intellectual property matters. The Committee held a hearing on Internet music copying last summer. See, TLJ story of July 12, 2000. Also, Sen. Patrick Leahy (D-VT), who is the ranking Democrat on the Judiciary Committee, released a statement. He said that "The Court of Appeals has sent the case back to the District Court to ensure that the rights of creators are protected and that the online marketplace is just that, and not a free-for-all."
House Passes ECEA
2/14. The House passed HR 524, the Electronic Commerce Enhancement Act, by a vote of 409 to 6, after a brief debate. See, Roll Call No. 14. This bill requires the NIST to assist small and medium-sized manufacturers to integrate and utilize e-commerce technologies and business practices. The House passed an identical bill in the 106th Congress as HR 4429; but it did not pass the Senate. The bill is sponsored by Rep. James Barcia (D-MI).
Reciprocal Comp.
2/14. The U.S. Court of Appeals (4thCir) issued its opinion in Bell Atlantic Maryland v. MCI WorldCom, case seeking review of a decision made by the Maryland Public Service Commission (MPSC) on reciprocal compensation rights under telecommunications interconnection agreements. The Appeals Court held, two to one, that the action against the MPSC and its individual members in their official capacity is barred by the Eleventh Amendment. Judge Niemeyer wrote the opinion, and Widener joined; King dissented.
2/14. The U.S. Court of Appeals (4thCir) issued its opinion in BellSouth v. North Carolina Public Services Commission, another case seeking review of state decisions regarding reciprocal compensation rights. The same three judge panel ruled, two to one, that the Eleventh Amendment barred the action against the state.
New Documents
USCA: opinion in Amazon v. Barnes and Noble re patent infringement and validity, 2/14 (HTML, TLJ).
USCA: opinion in Bell Atlantic Maryland v. MCI WorldCom re reciprocal compensation, 2/14 (HTML, USCA).
USCA: opinion in BellSouth v. North Carolina Public Services Commission re reciprocal compensation, 2/14 (HTML, LOC).
Hatch: statement in the Senate re Napster decision, 2/14 (HTML, TLJ)
FCC: annual report on Cable Industry Prices, 2/14 (MS Word, FCC).
Hatch: S 320, the Intellectual Property and High Technology Technical Amendments Act, 2/13 (HTML, LOC).
More News
2/14. The Senate Communications Subcommittee held a hearing on ICANN. See, statements of:
  Michael Roberts (ICANN CEO)
  Vint Cerf (ICANN)
  Michael Froomkin (Univ. of Miami)
  Roger Cochetti (VeriSign Network Sol.)
  Brian Cartmell (eNIC Corp.)
2/14. The House Science Committee held its organizational meeting for the 107th Congress. See, list of members.
2/14. The Congressional Internet Caucus Advisory Committee hosted a large reception and technology demonstration in the Hart Senate Office Building. New FCC Chairman Michael Powell spoke briefly, as did all four Co-Chairs of the Congressional Internet Caucus: Sen. Conrad Burns (R-MT), Sen. Patrick Leahy (D-VT), Rep. Rick Boucher (D-VA), and Rep. Bob Goodlatte (R-VA).
2/14. The Department of Commerce's International Trade Administration published a notice in the Federal Register in which it invites U.S. companies to participate in the High Technology Solutions Trade Mission. The itinerary includes visits to Paris, Florence, and Warsaw on May 12-22, 2001. Recruitment closes on April 1, 2001. See, Federal Register, Feb. 14, 2001, Vol. 66, No. 31, at Page 10271.
2/13. Sen. Orrin Hatch (R-UT) and Sen. Patrick Leahy (D-VT) introduced S 320, the Intellectual Property and High Technology Technical Amendments Act of 2001, a bill to make technical corrections in patent, copyright, and trademark laws.
Amazon Patent Case
2/14. The U.S. Court of Appeals (FedCir) issued its opinion in Amazon v. Barnesandnoble, an appeal of a trial court preliminary injunction order in a patent infringement case concerning Amazon's "one click" method and system for placing an order to purchase an item via the Internet. Both and (BN) are online booksellers. At issue is Amazon's U.S. Patent No. 5,960,411, which was issued on Sept. 28, 1999. Amazon filed its complaint in U.S. District Court (WDWash) on Oct. 21, 1999, against BN alleging patent infringement, and seeking a preliminary injunction. Amazon alleged that BN's "Express Lane" ordering system infringes its 411 patent. BN, in turn, challenged the validity of the 411 patent. The District Court issued a preliminary injunction, and BN appealed that order. The Court of Appeals found that Amazon carried its burden with respect to demonstrating the likelihood of success on the issue of infringement, but that BN raised substantial questions as to the validity of the 411 patent. It found that the District Court committed error by misreading the factual content of the prior art references, and by failing to recognize that BN had raised a substantial question of invalidity of the asserted claims in view of these prior art references. However, the Court hastened to add, "this conclusion only undermines the prerequisite for entry of a preliminary injunction. Our decision today on the validity issue in no way resolves the ultimate question of invalidity." Reversed and remanded.
Financial Services Comm.
2/14. The House Financial Services Committee held its organizational meeting. Rep. Richard Baker (R-LA) will chair the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises. Rep. Peter King (R-NY) will chair the Subcommittee on Domestic Monetary Policy, Technology, and Economic Growth. Rep. Spencer Bachus (R-AL) will chair the Subcommittee on Financial Institutions and Consumer Credit. See release. See also, membership list.
2/14. House Financial Services Committee Chairman Michael Oxley (R-OH) and all six Subcommittee chairs held a news conference regarding the Committee's oversight plan. See. release. Rep. Oxley said that there will be a comprehensive review of the Securities Acts. "We will be taking a serious look. When you look at the real world today, with people trading online. Some of the discount brokers -- now 75% of their trades are online. We are looking at statutes and regulations that go back to the 1930s. I think that it is reasonable to assume that some of them may be antiquated, duplicative, out of date. And, we are going to take a serious look at that. We will take some time. But we need a thorough review of that. ... We are going to start soon. But I cannot tell you when it is going to end."
2/14. Rep. Oxley stated that "with the passage of the electronic signatures legislation in the last Congress, the upside potential for great savings in the financial services area are out there. The paperless society -- the idea that we can use electronic commerce to our advantage in lowing consumer costs -- we'll save a lot of trees in the process. It has tremendous upside potential. Peter King, and his Subcommittee, will be very active in doing that." Rep. Oxley also explained the jurisdictions of the new Financial Services Committee and the House Commerce Committee over electronic commerce. "Well, all of the transactional things that deal with financial services is under our jurisdiction. Everything that has to do with electronic commerce in general stays with the Commerce Committee. ... It is the functionality of what you are doing, by the electronic method, that determines jurisdiction, not the avenue itself ..."
FCC Cable Report
2/14. The FCC released its annual report on Cable Industry Prices [36 pages in MSWord]. The report found that "both competitive and noncompetitive operators increased their average monthly rates by 5.8% ..." and that "the competitive differential between competitive and noncompetitive operators remained constant at 5.3% between 1999 and 2000." It also found that "cable operators point to increased programming costs to explain a significant portion of their rate increases. ... On a per channel basis, the average monthly rate for competitive operators remained constant for the year ending July 1, 2000, while for noncompetitive operators the average monthly rate per channel increased by one cent or 1.5% over the same period." The report also found that "47% offered Internet services and 7% offered telephone service. ... Revenue from non-video sources increased as a percent of total revenue from 1.5% to 3.5% between 1999 and 2000." The NCTA released a statement saying the price increases were modest. The Consumers Union (CU) released a statement complaining about rate increases. "Obviously, this report shows that it's time for Congress and the FCC to clamp down on cable monopolies," said the CU's Gene Kimmelman.
Quote of the Day
"There is an apparent conflict in the goals that America has. We want to dominate the world in high technology. We want to do the research. We want to provide cutting-edge products on the world market, and we want to dominate the world market in those products. At the same time, we are the principal guard at the gate in terms of the security of the world. We are the protector of freedom on the planet, so we have concerns about powerful technology getting into the wrong hands."

Sen. Phil Gramm (R-TX), statement at hearing on export controls, Feb. 14.
Export Controls
2/14. The Senate Banking Committee, which has jurisdiction over some trade issues, held a hearing on export controls and S 149, the Export Administration Act. The bill authorizes the Secretary of Commerce to identify items subject to export control. It allows the Secretary to remove controls on an item that has been determined to have foreign availability or mass-market status, and requires the Secretary to make foreign availability or mass-market status determinations within 6 months of receiving a petition for such status. John Hamre (President and CEO of the Center for Strategic and International Studies) and Donald Hicks (Chairman of Hicks and Associates) testified in support of the bill. See, statement by Sen. Phil Gramm (R-TX), prepared statement of Hamre, and prepared statement of Hicks.
2/14. The Export Administration Act is sponsored by Sen. Mike Enzi (R-WY); and he is its leading proponent. He stated at the Senate Banking Committee hearing that he expected a committee mark up, "hopefully later this month." He also predicted that the bill will come to a floor debate and vote sometime this year. Sen. Paul Sarbanes (D-MD), the ranking Democrat on the Committee, called the bill "an excellent piece of legislative craftsmanship." Sen. Phil Gramm (R-TX), the Chairman of the Committee, pledged to work for passage of the bill. He also stated, "don't get the idea that we have closed the book on this bill. If you have got a better idea, we will throw out ours, and take yours." Sen. Bob Bennett (R-UT) compared existing export restraints to the Smoot Hawley tariff. "We could destroy American companies by cutting them off from foreign markets," he said.
2/14. John Hamre, who until recently was Deputy Secretary of Defense, has undergone a conversion on export control issues. He previously fought against Congressional efforts to liberalize export restraints on encryption and hardware products. He stated at the Senate Banking Committee hearing on the Export Administration Act that "I spent two years when I was the Deputy Secretary fighting the software industry on encryption issues -- absolutely convinced that these guys were going to sell our security down the river, if we didn't protect ourselves. And I bought it. I know how to come up here and testify ... we all know how to put testimony out front that makes it awkward for you to vote." But then he "realized ... we are probably not going to be safer as a country if all of the encryption software is written overseas. It is a lot better if we know what our companies are doing, and that they are talking to us, and they give us a running start on how to stay up with it." He argued that the the U.S. should "convert from a transaction based licensing system to a process based licensing system. In essence, rather than require companies to submit licenses for each individual sale, instead the government should license the export control procedures of a company." That is, technology export companies should be the "first line of defense". He advocated a partnership between government and the private sector. He stated that now the relationship is "confrontational."
Deadline to submit comments to the FCC in response to its Notice of Proposed Rulemaking (NPRM) regarding implementation of the Children's Internet Protection Act [PDF]. This statute provides that in order to be eligible to receive FCC e-rate subsidies, schools and libraries that have computers with Internet access must have in place certain Internet safety policies, such as the use porn filtering software.
9:10 AM. FCC Commissioner Harold Furchtgott-Roth will deliver keynote remarks at a Practicing Law Institute Conference. The title of his remarks will be "Current FCC Enforcement Policy and Philosophy." Location: Grand Hyatt Hotel, Washington DC.
10:00 AM. The House Judiciary Committee will continue its mark up of HR 333, the "Bankruptcy Abuse Prevention and Consumer Protection Act 2001." Room 2141, Rayburn Building.
10:00 AM. The Senate Judiciary Committee will hold a business meeting. The agenda includes the bankruptcy reform bill. Location: Room 226, Dirksen Building.
9:30 AM - 12:00 NOON. The NTIA and FCC will host a public meeting between government and private sector regarding Third Generation (3G) wireless services.
12:00 PM. The Cato Institute will host a panel discussion titled "The New Medical Privacy Regulations: Will They Protect Our Most Personal Information?" The panelists will be Ronald Weich (Zuckerman Spaeder), Sue Blevins (Institute for Health Freedom), and Tom Miller (Cato Institute). Lunch will follow. Location: Cato Institute, 1000 Massachusetts Ave., NW, Washington DC.
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