|3/27. The plaintiffs in A&M Records v. Napster filed a pleading [PDF]
with the U.S. District Court (NDCal)
titled "Plaintiffs' Report on Napster's Non-Compliance
with Modified Preliminary Injunction" in which they argue
that "Napster has failed to abide by either the letter or
spirit of this Court's Preliminary Injunction. Plaintiffs have
provided Napster with
notice of over 675,000 copyrighted works. Stunningly, every
single song listed in the original complaint remains easily
available on the Napster system. In a very recent search for
approximately 7000 of those works that Napster claims to have
filtered pursuant to plaintiffs' notices, approximately 70% of
them could be found by simply searching for the artist and
song name." Napster wants Judge Patel to require Napster
to implement either a "filtering in" system, or an
effective "filtering out" system. Napster CEO Hank
Barry disputed these claims. He asserted that "Napster is
aggressively complying with the injunction with significant
measurable results." See, statement.
|Trade Secrets & State
|3/27. The U.S.
Court of Appeals (4thCir) issued its opinion
in DTM Research v. AT&T, a case
involving claimed trade secrets in data mining technology.
After signing a confidentiality agreement, AT&T negotiated with DTM
regarding its "Orca Blue" process for mining and
analyzing large quantities of call detail data. After
receiving a demonstration, AT&T declined to contract with
DTM, and conducted its data mining in house instead. DTM then
filed a complaint in U.S. District Court (DMd)
against AT&T based upon diversity of citizenship alleging
misappropriation of trade secrets, under Maryland law, during
the contract negotiations. AT&T's defense, in part, is
that DTM's "Orca Blue" was misappropriated from the
U.S. AT&T then sought discovery relevant to this defense
from the U.S. and its contractors. The U.S. intervened,
invoked the "state secrets" privilege, and moved to
quash AT&T's subpoenas on the grounds that any inquiry
into the technology would threaten national security. The
District Court quashed AT&T's subpoenas. AT&T then
moved for summary judgment on the grounds that it could not
defend against DTM's claims. The District Court denied this
motion, but certified an appeal. AT&T brought this appeal.
The Appeals Court affirmed. It held that fee simple ownership
in its traditional sense is not an element of a trade secrets
misappropriation claim in Maryland. It also held that the
U.S.'s assertion of the state secrets privilege does not deny
AT&T a fair trial, and does not require termination of
this litigation. Remanded.
Napster's failure to filter copyrighted music, 3/27 (PDF, RIAA).
in DTM v. AT&T re trade secrets and state secrets, 3/27
in Foundation v. Savannah College re antitrust and
accreditation bodies, 3/27 (HTML, USCA).
Agreement re insider trading re Sun acquisition of Cobalt,
3/20 (PDF, USAO).
advocating free trade, 3/27 (HTML, WH).
|3/27. The U.S.
Court of Appeals (6thCir) issued its opinion
in Foundation for Interior Design Education Research v.
Savannah College of Art & Design, a case
involving a claim that an accreditation body violated the
Sherman antitrust act. The District Court found no violation
of the Sherman Act, and the Appeals Court affirmed.
|Quote of the Day
|"It is doubtful that Napster's self-selected,
technologically archaic filter ever could significantly limit
access to plaintiffs' music. Yet, Napster contemptuously
refuses to employ an effective filter-- for fear that it might
RIAA, from pleading filed on March 27.
"Napster is aggressively complying with the injunction
with significant measurable results."
Hank Barry, CEO of Napster, from March 27 statement.
|3/27. Joel Mesplou plead guilty to making false statements
to the SEC during an
insider trading investigation, in violation of 18 U.S.C.
§ 1001. Mesplou acquired insider information of Sun Microsystems' impending
acquisition of Cobalt
Networks from an associate at Brobeck Phleger working on
the transaction. Mesplou also settled civil insider trading
charges brought by the SEC. The Information
[PDF], dated March 20, 2001, states that Mesplou "is a
professional investor and a partner in an investment firm
based in Palo Alto, CA." It continues that he
"became acquainted" with an associate "employed
in the Business and Technology practice group of the Palo
Alto, CA office of the law firm of Brobeck, Phleger &
Harrison." She provided Mesplou "with material
nonpublic information about a merger on which she was working,
namely, a transaction in which Sun Microsystems, Inc.
("Sun") would acquire Cobalt Networks, Inc.".
The Information continues that on or about the next day
Mesplou purchased call options and stock in Cobalt totaling
$1,182,687.70. Then, on or about the next day, "Sun
announced publicly that it had reached an agreement to acquire
Cobalt" and Mesplou "sold all of the Cobalt stock
and options which he had purchased ..." When the SEC
investigated his trades, he lied. See also, Plea
Agreement and release.
The associate is no longer with the firm.
|Internet Pyramid Scheme
|3/12. The FTC filed a complaint [PDF] in U.S.
District Court (DAriz) against an
Internet mall named Bigsmart.com, and two of its founders,
Mark Tahiliani and Harry Tahiliani, alleging violation of the
Federal Trade Commission Act for engaging in deceptive acts,
and an illegal pyramid scheme. Bigsmart sold investments in
Internet theme malls. It claimed that investors would earn
substantial income from commissions on products purchased
through the Internet. However, defendants structured the
scheme so that for investors to realize continued financial
gains, they would have to recruit other investors. The FTC and
the defendants also reached a settlement of the case, in which
defendants agreed to pay consumer redress, post a bond, and
agree not to operate any more pyramid schemes. See, Stipulated
Final Order Approving Settlement Agreement [PDF]. See
also, FTC release.
|House Policy Committee
|3/27. House Speaker Dennis
Hastert (R-IL) and Rep.
Chris Cox (R-CA) announced the chairmen, membership, and
jurisdiction of seven subcommittees of the House Policy Committee.
This committee serves the House Republican leadership as a
forum for discussion of legislative initiatives, for the
enunciation of official priorities, and for the resolution of
jurisdictional policy disputes. Rep. Cox is Chairman of the
Committee. One of the seven subcommittees is name Biotechnology,
Telecommunications, and Information Technology; its
Chairman will be Rep.
Jerry Weller (R-IL). Its jurisdiction includes biomedical
research, development, and technology; telecommunications, the
Internet, and information technology; intellectual property;
astronautical research and development; scientific research
and development; and the activities of the NIST,
the NSF, the FCC, the FDA, and the FTC.
It other members will be Barbara Cubin (R-WY), Tom Davis
(R-VA), Ernie Fletcher (R-KY), Vito Fossella (R-NY), Bob
Goodlatte (R-VA), Felix Grucci (R-NY), Darrell Issa (R-CA),
Deborah Pryce (R-OH), Nick Smith (R-MI), Cliff Stearns (R-FL),
John Sununu (R-NH), Billy Tauzin (R-LA), John Thune (R-SD),
and Dave Weldon (R-FL). See, complete
list [PDF] of subcommittees, chairmen, and memberships.
|3/27. The ITAA
and Unisys stated that
they conducted a poll of public opinion on modernization of
voting technology. They stated that "only 39% believed
that the Internet should be used to allow people to
vote." See, ITAA
3/27. Edward Kientz was named Chairman of the Telecommunications Industry
Association's Board of Directors. The TIA is a trade
association involved in communications and information
technology industry policy and standards setting. See, release.
Kientz is President of Benner-Nawman,
the inventor of the aluminum and glass phone booth.
3/27. The National Telephone
Cooperative Association gave Sen. Blanche Lincoln
(D-AR) its Congressional Leadership Award at its Annual
Legislative Conference in Washington DC. Sen. Lincoln gave an
address at the meeting.
3/26. Three defendants plead guilty in U.S. District Court (NDCal)
in a case involving two Fremont computer component
distribution businesses that sold stolen computer
components. However, the Defendants plead to crimes
associated with their laundering of proceeds. Paul Chen plead
guilty to one count of money laundering conspiracy, in
violation of 18 U.S.C. § 1956(h), and one count of
filing a false income tax return in violation of 26 U.S.C.
§ 7206(1). Chiu-Mei Chen plead guilty to wire fraud and
aiding and abetting, in violation of 18 U.S.C. §§ 1343
& 2, and filing a false income tax return in violation of
26 U.S.C. § 7206(1). Tony Ip pled guilty to one count of
money laundering conspiracy, in violation of 18 U.S.C.
§ 1956(h). Charges against three other defendants are
still pending. Joseph Sullivan, of the U.S. Attorney's Office
Computer Hacking and Intellectual Property Unit, is
prosecuting the case. See, release.
|3/27. President George Bush gave a speech
in Kalamazoo, Michigan, in which he advocated free trade. He
stated: "When economy slows down, protectionist pressures
tend to develop. We've seen this happen before, and it could
happen again. So I want to say this as clearly as I can: Trade
spurs innovation; trade creates jobs; trade will bring
|3/27. Sen. Charles
Grassley (R-IA) released a statement
[PDF] in which he said that "Sometime this year Congress
will decide whether or not to renew the President's trade
negotiating authority. The decision will be to move forward
and open new markets for America’s farmers, entrepreneurs
and service providers or to take a back seat to our
competitors. I'll do all I can to see that we continue to move
forward." Sen. Grassley is Chairman of the Senate Finance
Committee, which has jurisdiction over this legislation.
3/27. House Majority Leader
Dick Armey (R-TX) gave a speech on fast track trade
negotiating authority. He stated: "The votes are there in
the House, and I suspect in the Senate as well, and we should
just go ahead and do it," Armey told a March 27 luncheon
of the Emergency Committee for American Trade, a pro-trade
lobbying group. See, State
3/21. Sen. Chris Dodd
(D-CT) introduced S
586, the Chile Fast Track Act of 2001, a bill to authorize
negotiation for the accession of Chile to the North American
Free Trade Agreement, and to provide for fast track
consideration. It has been referred to the Senate Finance
Committee. On January 22 Sen. Phil Gramm (R-TX) introduced S
136, the Fast Track Trade Negotiating Authority Act. On
March 22 Sen. Pat Roberts (R-KS) introduced S
599, the Permanent Trade Promotion Authority and Market
Access Act of 2001.
|The House will consider the Budget Resolution for FY 2002
and HR 6, the Marriage Penalty and Family Tax Relief Act of
The Senate will continue its debate of S 27, the campaign bill
sponsored by Sen. John McCain (R-AZ).
March 28-30. The American Bar
Association's Antitrust Section will hold its annual
spring meeting. See, agenda.
Location: JW Marriott Hotel, 1331 Pennsylvania Ave., NW,
9:00 AM. The NTCA
will host a press breakfast. The speaker will be Mike Rawson
(telecom advisor to Sen. Conrad Burns) and Earl Owens (CEO of
the Blackfoot Telephone Cooperative). RSVP to Aaryn Slafky at
703-351-2087 or firstname.lastname@example.org.
10:00 AM. The NTCA
will host a panel discussion on regulatory issues at its
Annual Legislative Conference. The panelists will be Dorothy
Attwood (Chief of the FCC's Common
Carrier Bureau), David Solomon (Chief of the FCC's Enforcement Bureau), James
Schlichting (Deputy Chief of the FCC's Wireless Telecommunications
Bureau), Brad Ramsay (General Counsel of the NARUC),
and Warren Hight (Manager of SRT Communications, ND).
Location: Hyatt Regency Washington, 400 New Jersey Ave., NW,
10:00 AM. Oral Argument before the Supreme Court of the
U.S. in NYT v. Tasini, No. 00-201.
CANCELLATION. The FCC's
Technological Advisory Council meeting, which has been
scheduled for 10:00 AM, was cancelled. See, notice
of cancellation in Federal Register.
10:00 AM. The House
Commerce Committee will mark up HR 718, the Unsolicited
Commercial Electronic Mail Act of 2001, sponsored by Rep. Heather Wilson
(R-NM). Location: Room 2123, Rayburn Building.
10:30 AM. FTC Chairman Robert Pitofsky will participate
in the American Bar
Association's Antitrust Section's Council Meeting.
Location: JW Marriott Hotel, 1331 Pennsylvania Ave., NW,
1:45 PM. FTC Commissioner Mozelle Thompson will speak
at the American Bar
Association's Antitrust Section's annual meeting.
Location: JW Marriott Hotel, 1331 Pennsylvania Ave., NW,
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