Tech Law Journal Daily E-Mail Alert
March 16, 2001, 8:00 AM ET, Alert No. 145.
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Bankruptcy Reform
3/15. The Senate passed S 220, the bankruptcy reform bill, by a vote of 85 to 15. The House passed its version of the bill, HR 333, on March 1.
Spam Bills
3/14. Rep. Bob Goodlatte (R-VA) introduced HR 1017, the Anti-Spamming Act of 2001, a bill to criminalize the forging of header information in unsolicited commercial email (UCE). On Feb. 14, 2001, Rep. Heather Wilson (R-NM) introduced HR 718, the Unsolicited Commercial Electronic Mail Act of 2001. HR 718 is a longer and broader bill with wide support (94 cosponsors). HR 1017 is a narrow bill intended to supplement HR 718 in one area -- forging of header information. It would criminalize the sending of a bulk UCE message "with knowledge that such message falsifies an Internet domain, header information, date or time stamp, originating e-mail address, or other identifier". HR 718 already contains similar language. However, HR 1017 would also criminalize selling or distributing "any computer program that (i) is designed or produced primarily for the purpose of concealing the source or routing information ... (ii) has only limited commercially significant purpose or use other than to conceal such source or routing information; or (iii) is marketed by the violator or another person acting in concert with the violator and with the violator’s knowledge for use in concealing the source or routing information of such messages". HR 1017 is cosponsored by Rep. Rick Boucher (D-VA) and Rep. Lamar Smith (R-TX). HR 1017 has been referred to the House Judiciary Committe, on which Reps. Goodlatte, Boucher, and Smith sit.
IP News
3/15. NCR filed a complaint in U.S. District Court (DDel) against Palm and Handspring alleging patent infringement.
3/15. The U.S. Court of Appeals (FedCir) issued its opinion in Netword v. Centraal, a patent infringement suit involving Netword's U.S. Patent No. 5,764,906 titled "Universal Electronic Resource Denotation, Request and Delivery System." It describes and claims a system for locating and retrieving information on a distributed computer system or network, such as the Internet, using "aliases" to denote resources whose retrieval is sought. The Appeals Court affirmed the District Court's judgment of non-infringement.
3/14. Sony and Connectix resolved all pending patent infringement actions pertaining to Connectix Virtual Game Station. Connectix stated that "As part of the agreement the two companies have resolved all legal issues pertaining to Connectix Virtual Game Station (CVGS). For consideration, Sony Computer Entertainment will acquire from Connectix all assets related to the VGS emulation technology. Connectix will continue to offer the current version of both CVGS for Macintosh and Windows until June 30, 2001. Connectix will provide continuing support to existing users. All further emulation development for the PlayStation game console will proceed under the auspices of the joint agreement." See, Connectix release.
3/15. The USPTO published its first set of patent applications under the American Inventors Protection Act. Publication of patent applications is now required for the vast majority of filings made on or after November 29, 2000. Previously, patent applications were held in confidence until a patent was granted. See, release.
3/8. The Secret Service executed two search and seizure warrants in Queens and Manhattan, New York, against a music counterfeiting operation. It seized counterfeit music CDs, as well as equipment used to produce counterfeit music CDs, including CD-R burners, computer monitors, computers, thermal imprinters, paper-cutting machines, laptops computer, industrial color copiers, and industrial shrink-wrap machines. The Secret Service was assisted by the RIAA's New York Anti-Piracy Unit. See, RIAA release.
More Hill News
3/14. Sen. Richard Shelby (R-AL) introduced S 536, a bill to amend the Gramm Leach Bliley Act to provide for a limitation on sharing of marketing and behavioral profiling information. The bill was referred to the Senate Banking Committee.
3/15. The House Education and Workforce Committee's Subcommittee on 21st Century Competitiveness held a hearing titled "Improving Student Achievement Through Technology."
New Documents
GAO: report on vulnerability of IRS electronic filing data, 3/15 (PDF, GAO).
Goodlatte: HR 1017, the Anti- Spamming Act, 3/14 (HTML, TLJ).
Wolf: HR 1012, the Telework Tax Incentive Act, 3/13 (HTML, LOC).
Santorum: S 521, the Telework Tax Incentive Act, 3/13 (HTML, LOC).
USCA: opinion in AT&T v. Dallas, 3/15 (HTML, USCA).
USCA: opinion in Kiam v. NFL, an antitrust case, 3/15 (HTML, USCA).
PPI: report on global e-commerce, 3/15 (PDF, PPI).
FCC: notice re Computer III FNPRM, 3/15 (TXT, FedReg).
Export Controls
3/15. The Senate Governmental Affairs Committee held a hearings on high performance computer export controls. The GAO presented a report titled "Export Controls: Inadequate Justification for Relaxation of Computer Controls Demonstrates Need for Comprehensive Study". On January 10, 2001, the Clinton administration announced a significant relaxation of export controls on high performance computers (HPCs); it raised the licensing and notification thresholds from 28,000 to 85,000 MTOPS. The 1998 National Defense Authorization Act requires the President to provide a report to Congress justifying export control modifications on three grounds. The GAO report concluded that Clinton only justified his decision on one of the three grounds. The GAO concluded that the Clinton report addressed the first criterion, worldwide availability of HPCs, but failed to address the other two criteria, the computer uses of military significance to which HPCs could be applied at the new MTOPS thresholds, and the national security impact of such uses. The GAO report did not reach any conclusion as to whether 85,000 MTOPS is an appropriate threshold, or even if MTOPS is an appropriate measure.
Sen. Fred Thompson (R-TN), Chairman of the Committee, presided at the hearing. He criticized the Clinton report for not making an adequate assessment of the national security implications of raising the MTOPS levels. He stated that "we are still flying blind." He expressed concern about exporting dual use HPCs which can be used to simulate nuclear testing by China.
Sen. Bob Bennett (R-UT), a member of the Committee, offered a defense of liberalization of export controls on HPCs. He argued that other countries are involved in HPC computer manufacture, and that export controls could prevent U.S. manufacturers from competing effectively. He also pointed out that it would harm U.S. national security if U.S. industry lost its lead, and the Defense Department had to purchase HPCs from foreign manufacturers.
3/15. The Senate Banking Committee postponed its mark up of S 149, The Export Administration Act of 2001. "Some things are worth the wait and that's how I classify this bill," said Sen. Mike Enzi (R-WY), sponsor of the bill. "We are now working with a new Administration. Based on our discussions, it is clear the Administration supports the basic principles of our bill. The White House has just completed a thorough review of our bill. We have been in contact with the President's national Security Advisor Condaleezza Rice. Through her leadership the Administration has suggested a package of improvements for the bill. We will continue discussions with the Administration in the coming days. I am confident we will reach a consensus and receive the full backing of the President." Sen. Phil Gramm (R-TX), Chairman of the Banking Committee, said "I am confident that we can in short order reach a consensus and receive the president's full endorsement ..."
3/15. The U.S. Court of Appeals (2ndCir) issued its opinion in Victor Kiam v. NFL, a old antitrust case involving Victor Kiam's attempts to relocate the New England Patriots football club. This is not a tech case, but the antitrust analysis may be of interest to technology lawyers, and football fans. Kiam, owner of the Patriots, filed a complaint in 1994 in U.S. District Court (SDNY) against the NFL, its member clubs, including Touchdown Jacksonville Ltd (TJL), and Touchdown Jacksonville Inc. (TJI), alleging violation of § 1 of the Sherman Act by engaging in monopolistic and conspiratorial conduct that illegally lowered the value of the Patriots. Kiam had signed a release, but argued that it was void for economic duress, and that it was part and parcel of the antitrust violation. Defendants prevailed in the District Court. The Appeals Court affirmed, except as to TJL and TJI. The Appeals Court wrote, "this leaves the NFL dog of this litigation quite dead but the TJI/TJL tail still wagging".
Telecom News
3/15. The FCC published a notice in the Federal Register requesting comments to "update and refresh the record" on issues raised in its Computer III Further Notice of Proposed Rulemaking, originally issued on January 30, 1998. Comments are due April 16, 2001. Reply comments are due April 30, 2001. See, Federal Register, March 15, 2001, Vol. 66, No. 51, at Pages 15064 - 15065.
3/15. The U.S. Court of Appeals (DC Cir) heard oral argument in NextWave Personal Communications v. FCC, Appeal No. 00-1402.
3/15. The U.S. Court of Appeals (DC Cir) heard oral argument in Global Crossing v. FCC, Appeal No. 00-1204.
3/15. The House Commerce Committee's Subcommittee on Telecommunications and the Internet held a hearing titled Digital Television: A Private Sector Perspective on the Transition. See, prepared testimony of witnesses:
 • Martin Franks (CBS/Viacom)
 • David Arland (Thomson Multimedia)
 • Lowell Paxson (Paxson Comm.)
 • Steve Weed (Millenium Digital Media)
 • Beth Courtney (La. Public B'casting)
 • Ben Tucker (Fisher Broadcasting)
 • Michael Willner (Insight Comm.)
 • Ronald Parrish (RadioShack)
 • Chris Cookson (Warner Bros.)
See also, prepared statement by Rep. Billy Tauzin (R-LA), Chairman of the Commerce Committee.
3/15. The U.S. Court of Appeals (5thCir) issued its opinion in AT&T v. City of Dallas, a mooted appeal regarding the City of Dallas' attempt by ordinance to impose fees and restrictions on local telephone providers. When CLECs attempted to enter the local telephone market in Dallas, the City of Dallas imposed franchise conditions on the CLECs and increased right-of-way fees on all local telephone providers. Various challenges to the ordinance were consolidated in one action, in which the District Court granted preliminary injunctions to the CLECs, and then granted summary judgments holding that a CLEC does not "use" a right of way under § 523 of the Telecom Act of 1996 by leasing the UNEs of an ILEC, and is therefore not responsible for municipal fees. SBC appealed. Then, the State of Texas enacted a statute, which preempted the Dallas city ordinance. The remaining issue on appeal was how to deal with the mooted appeal. The Appeals Court vacated the District Court's judgments and remanded the case with directions to dismiss.
IRS Data Vulnerable
3/15. The GAO published a report [PDF] titled "Information Security: IRS Electronic Filing Systems," which found that the IRS's electronic filing data is vulnerable to hackers. The report stated that "During last year’s 2000 tax filing season, IRS did not implement adequate computer controls to ensure the security of its electronic filing systems and electronically transmitted taxpayer data." The report elaborated: "We demonstrated that unauthorized individuals, both internal and external to IRS, could have gained access to IRS' electronic filing systems and viewed and modified taxpayer data contained in those systems during the 2000 tax filing season. We were able to gain such access because IRS at that time had not (1) effectively restricted external access to computers supporting the e-file program, (2) securely configured the operating systems of its electronic filing systems, (3) implemented adequate password management and user account practices, (4) sufficiently restricted access to computer files and directories containing tax return and other system data, or (5) used encryption to protect tax return data on e-file systems. Further, these weaknesses jeopardized the security of sensitive business, financial, and taxpayer data on other critical IRS systems that were connected to e-file computers through its servicewide network."
3/15. The FBI's NIPC issued an Assessment titled "Intrusion Detection Systems Exploit" that states that "a software package has been identified which, if used maliciously, may disable a victim’s computer or network's IDS by flooding it with Internet traffic emanating from several random Internet Protocol (IP) addresses simultaneously." The NIPC issues three levels of warnings: assessments, advisories, and alerts. Assessments are of the lowest level of severity.
3/15. The Progressive Policy Institute released a report [PDF] titled "A Third Way Framework for Global E-Commerce." See also, executive summary. The authors of the report, Shane Ham and Robert Atkinson, held a press conference in the Capitol Building with Sen. Joe Lieberman (D-CT) and Rep. Ellen Tauscher (D-CA) to release and summarize the report.
Deadline to submit comments or papers to the NTIA and FTC regarding the benefits and burdens of requiring consumer consent to receive information electronically. These agencies are required by the E-SIGN Act, passed last year, to conduct this study. Also, a workshop will be held at the FTC on April 3, 2001 from 8:30 AM to 5:00 PM. See, notice published in the Federal Register.
8:30 AM - 12:30 PM. The Administrative Office of U.S. Courts will hold a hearing on privacy and security implications of public access to federal court documents via the Internet. See, release. Location: Judicial Conference Center in the Thurgood Marshall Federal Judiciary Building, One Columbus Circle NE, Washington DC.
9:30 AM. The Federal Communications Commission will hold a meeting. Location: Commission Meeting Room, 445 12th Street, SW, Washington DC.
10:30 AM - 12:00 NOON. The Federal Communications Bar Association and the DC Bar Intellectual Property Law Section will cosponsor a panel discussion titled Permission for Transmission -- Copyright on the Internet. The speakers will be Alison Shapiro (Fletcher, Heald & Hildreth), David Carson (Copyright Office), Troy Dow (MPAA), Vincent Garlock (Courts, Internet, and Intellectual Property Subcommittee), and Bruce Joseph (Wiley, Rein & Fielding). The price is $20 in advance, or $30 on site. Location: International Trade Center, Ronald Reagan Building, 1300 Pennsylvania Avenue, NW, Washington DC.
12:00 NOON - 1:30 PM. The Federalist Society's Criminal Law Practice Group will host a luncheon program titled "Law Enforcement in Cyberspace: Who Has the Upper Hand -- the Hackers or the Cops?" The speakers will be Bill Jordan (Alston Bird), Orin Kerr (DOJ Computer Crime Section), Michael O'Neill (George Mason Univ. School of Law), and Marc Rotenberg (EPIC). RSVP to 202-822-8138. Location: National Press Club, 529 14th Street, NW, Washington DC.
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