Tech Law Journal Daily E-Mail Alert
March 29, 2001, 8:00 AM ET, Alert No. 154.
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Bush Budget
3/28. The House approved President Bush's $1.9 Trillion FY 2002 budget, by a vote of 222-205. It was a largely party line vote. See, Roll Call No. 70
Bush's High Tech Agenda
3/28. President Bush met with high tech leaders at the White House. He gave an address in which he outlined his high tech agenda; it includes lower taxes, free trade, fast track trade negotiating authority, support for the Export Administration Act, a permanent research and development tax credit, and education.
President Bush advocated free trade, and requested that the Congress give him fast track trade negotiating authority. He said that "One of the concerns is if the economy were to slow down like ours, the protectionist sentiments around America might start bubbling to the surface. Ours is an administration dedicated to free trade. I hope the Congress gives me trade promotion authority, as soon as possible, so I can negotiate free trade agreements. We should not try to build walls around our nation and encourage others to do so. We ought to be tearing them down. Free trade is good for America. And it will be good for your industry, as well."
President Bush addressed the S 149, the Export Administration Act, sponsored by Sen. Mike Enzi (R-WY). The bill eases restraints on the export of most dual use products, such as computers and software. It was amended and adopted by the Senate Banking Committee by a vote of 19 to 1 on March 22. President Bush called it a "good bill." He added that "The existing export controls forbid the sales abroad of computers with more than a certain amount of computing power. With computing power doubling every 18 months, these controls had the shelf life of sliced bread. They don't work." The bill as adopted on March 22 repeals provisions of the 1998 National Defense Authorization Act which require the President to use MTOPS to set restrictions on the export of high performance computers.
President Bush advocated making the research and development tax credit permanent. The Clinton administration supported temporary extensions. Bush stated that "we want the R&D credit to be permanent, and we're working with members of the Senate to do so. A lot of us in this administration have been in the world of taking risk. We understand that one of the most important parts about government policy is that there will be certainty in the policy. And I think making the R&D credit a permanent part of the tax code is part of creating certainty, so people can more wisely make investments with cash flow in their capital accounts."
President Bush also announced his intent to appoint Floyd Kvamme to be Co-Chair and Member of the President's Committee of Advisors on Science and Technology. He is a partner in the venture capital firm of Kleiner Perkins Caufield and Byers, which is based in Menlo Park, California. He is also a major Republican contributor. Another KPCB partner, John Doerr, was close to the Clinton administration. See also, release.
Jordan FTA
3/28. Sen. Charles Grassley (R-IA) issued a statement [PDF] on the U.S. Jordan Free Trade Agreement (FTA) [PDF], negotiated by the Clinton administration last year. The Senate has yet to ratify it. Sen. Grassley, who is Chairman of the Senate Finance Committee, said that "I look forward to the new administration finalizing a trade agreement with Jordan." He further suggested that the Bush administration modify the FTA, as Clinton modified the NAFTA after it had been negotiated by the previous Bush administration. Trade with Jordan is not significant. However, the terms of this FTA are important because it may set a pattern for future FTAs with other nations. The main controversy is whether these FTA's should contain language addressing labor and environmental issues, as does the agreement as currently drafted. The Jordan FTA is also significant because it contains extensive language pertaining to intellectual property and e-commerce. This FTA addresses patents, trademarks, copyright, and enforcement of IPR. It also provides that the parties will not impose new customs duties on electronic transmissions.
Attys Fees in Copyright Suits
3/27. The U.S. Court of Appeals (2ndCir) issued its opinion in Crescent Publishing v. Playboy, an appeal from an award of attorneys fees in a copyright case. Crescent filed a complaint in U.S. District Court (SDNY) against Playboy alleging that Playboy infringed its copyright on a photograph. The District Court dismissed the case, after Crescent conceded that it did not have the requisite proof of copyright ownership. The Court also awarded attorneys' fees to Playboy sua sponte. Crescent appealed both the decision to award attorneys' fees, and the determination of the amount. Vacated and remanded.
IP Licensing
3/28. The U.S. Court of Appeals (8thCir) issued its opinion [PDF] in Black Clawson v. Kroenert, a case regarding licensing of proprietary information. Plaintiff, Black Clawson, is a licensee of intellectual property owned by a German corporation, Pagendarm Technologie. The license agreement grants it the exclusive rights to use proprietary information in its manufacturing business in North America. Defendants allegedly marketed products in the U.S. based on theft of the licensed technology. Plaintiff filed suit in U.S. District Court (NDIowa) alleging violation of the RICO Act, the Lanham Act, and various state law causes of action, including misappropriation of trade secrets. The District Court granted summary judgment to defendants. Reversed and remanded.
New Documents
Bush: address on high tech agenda, 3/28 (HTML, WH).
Wilson: HR 718 as amended on 3/28 (HTML, TLJ).
Burns: S 630 IS, the CAN SPAM Act, 3/27 (HTML, TLJ).
Dingell: letter to SEC re spam in securities industry, 3/26 (HTML, Dingell).
NRF: letter to Members of Congress re HR 718, 3/20 (PDF, Dingell).
USCA: opinion in Crescent Publishing v. Playboy, an appeal from an award of attorneys fees in a copyright case, 3/27 (HTML, USCA).
USCA: opinion in Microstrategy v. Motorola, a trademark case, 3/28 (HTML, USCA).
USCA: opinion in Black Clawson v. Kroenert, a case regarding licensing of proprietary information, 3/28 (PDF, USCA).
USCA: opinion in Kee v. Rowlett, an electronic surveillance case, 3/28 (HTML, USCA).
FTC: notice re revisions to the FTC's Regulations on Organization, Procedure and Rules of Practice, 3/28 (HTML, FTC).
Roye: speech re E-SIGN, the Internet, and the SEC, 3/26 (HTML, SEC).
3/28. The House Commerce Committee amended and adopted HR 718, the Unsolicited Commercial Electronic Mail Act of 2001, sponsored by Rep. Heather Wilson (R-NM) and Rep. Gene Green (D-TX). The Committee adopted by a voice voice, without opposition, an amendment in the nature of a substitute offered by Rep. Wilson. The Committee then adopted the bill, as amended, by voice vote without opposition. This latest version of the bill includes new language defining how the bill affects businesses with multiple subsidiaries and affiliates, refining the provision allowing ISPs to sue spammers by defining the criteria that must be met in order for an ISP to file a lawsuit, and requiring that awards in suits brought by state attorneys general (AGs) go to injured consumers.
Rep. Chris Cox (R-CA) had argued at the Telecom Subcommittee mark up session on March 21 that there should be no parens patriae cause of action by state AGs. The compromise embodied in the amendment adopted on March 28 is to maintain the state AG right of action, but to require that all "monetary amounts recovered or received by settlement or judgment ... shall be paid directly to the persons who incurred losses ... and no such amounts may be retained by the State or may be used directly or indirectly to offset the cost of such litigation." Rep. John Dingell (D-MI) , Rep. Al Wynn (D-MD), and Rep. Bart Stupak (D-MI) spoke in support of the bill, but in opposition to this limitation on state AGs. Rep. Stupak also criticized the bill's language barring class action suits.
Rep. Chip Pickering (R-MS), who is also a Co-Chair of the Congressional Wireless Caucus, argued that "a wireless carrier that offers short message service" (i.e., SMS on pagers and cell phones) should be encompassed within the bill's definition of "Internet access service." That is, he wants SMS to qualify for the bill's language granting ISPs limitations on liability and private rights of action. Rep. Green stated that "it is not our intent to include those in this bill." Rep. Wilson added that those are wireless technologies that should be addressed under common carrier law, not a spam bill.
Rep. Ed Markey (D-MA) expressed concern that the bill's language giving ISPs immunity for blocking e-mail also gives ISPs license to block legitimate e-mail. He stated that "ISPs typically block bulk e-mail transmissions, and do not ordinarily ascertain whether such bulk e-mail represents legitimate commercial correspondence, unsolicited commercial messages, or, as is often the case, both such types of messages. My concern is that the bill may unwittingly authorize certain discriminatory anticompetitive practices in online commerce. ISPs may develop discriminatory practices with the delivery of e-mail, and then obtain liability protection for policies, if they can be said to have undertaken in good faith to block spam. ... A situation that the bill does not address is if a business, a legitimate business, operating online, sends a mass mailing to its own customers, having jumped through such hurdles, and then finds that an ISP has decided to block delivery. I believe we need to have a broader discussion in this Committee about the repercussions of leaving the delivery of legitimate commercial correspondence at the mercy of an ISP, especially in those cases where such correspondence may be from competitors of that ISP, its affiliates, or joint venture partners."
The House Judiciary Committee also has jurisdiction over this bill. Meanwhile, on March 27, Sen. Conrad Burns (R-MT), the Chairman of the Senate Communications Subcommittee, introduced S 630, the CAN SPAM Act.
Financial Services Industry Spam
3/26. Rep. John Dingell (D-MI) and Rep. Ed Markey (D-MA) sent a letter to Acting SEC Chairman Laura Unger requesting that the SEC "initiate an immediate investigation into securities industry use of unsolicited "spam" e-mails." The letter was prompted by a March 20 letter [PDF] sent by numerous leading financial institutions and groups to Members of Congress which argues that the private right of action contained in the HR 718 will "discourage the use of electronic commerce", and that the language in the bill preempting state spam laws is too weak. The two want to know "exactly what practices these firms are seeking to perpetuate."
Intelligence Everywhere
3/28. The U.S. Court of Appeals (4thCir) issued its opinion in Microstrategy v. Motorola, a trademark case involving the phrase "Intelligence Everywhere." After conducting various trademark searches which turned up no conflicting trademark uses, Motorola began a global branding campaign based on the phrase "Intelligence Everywhere". It also filed a trademark application with the USPTO, and registered the domain www.intelligencee Then, MicroStategy, which had not registered the trademark "Intelligence Everywhere", filed a complaint in U.S. District Court (EDVa) against Motorola on Feb. 13, 2001 alleging trademark infringement, trademark dilution, and cybersquatting. MicroStrategy moved for a preliminary injunction, which the District Court denied. This interlocutory appeal followed. The Appeals Court affirmed, on the basis that MicroStrategy failed to demonstrate that it has a valid and protectable mark; it failed to demonstrate that it has likely used "Intelligence Everywhere" to identify MicroStrategy as the source of its goods or services.
Medical Privacy
3/28. Rep. James Greenwood (R-PA) introduced HR 1215, a bill regarding the confidentiality of medical records and health care related information. The bill was referred to both the House Commerce Committee and the House Judiciary Committee.
Electronic Surveillance
3/28. The U.S. Court of Appeals (5thCir) issued its opinion in Kee v. Rowlett, an electronic surveillance case. The police placed an electronic surveillance microphone at an outdoor grave site memorial service as part of their investigation of the murder of two children. The children's mother was eventually convicted of capital murder. The police intercepted the conversations of Darlie Kee and Darin Routier, the children's grandmother and father, at the service. The police had the permission of the cemetery owner, but not the service's attendees. They had no warrant. When Kee and Routier learned of the surveillance, they filed a complaint in U.S. District Court (NDTex) against The City of Rowlett, Texas, and its police officers Jimmy Ray Patterson and Chris Frosch, and Assistant District Attorney Greg Davis, under 42 U.S.C.  1983 and 18 U.S.C.  2511. The District Court dismissed, and the Court of Appeals affirmed, on the grounds that there is no reasonable expectation of privacy regarding oral communications at a grave site memorial service.
More News
3/28. The American Bar Association's Antitrust Section is holding its annual spring meeting in Washington DC. Outgoing FTC Chairman Robert Pitofsky and FTC Commissioner Mozelle Thompson spoke at the meeting on March 28.
3/28. President Bush nominated Daniel Bryant to be an Assistant Attorney General. See, release.
3/28. President Bush nominated John Graham to be Administrator of the Office of Information and Regulatory Affairs at the Office of Management and Budget. See, release.
NYT v. Tasini
3/28. The Supreme Court of the U.S. heard oral argument in NYT v. Tasini, a case regarding the application of copyright law to the republication of the articles of free lance writers in electronic databases. The plaintiffs are free lance authors whose articles were previously published in periodicals. The defendants are publishers and owners of electronic databases which have republished their articles in electronic form. Plaintiffs filed a complaint in U.S. District Court (SDNY) in 1993 alleging copyright infringment. U.S. District Court Judge Sonia Sotomayor issued her Opinion in 1997 holding that defendants are protected by the privilege afforded the publishers of "collective works" under Section 201(c) of the Copyright Act. The U.S. Court of Appeals (2ndCir) issued its Opinion reversing the District Court on Sept. 24, 1999.
The House will meet a 10:00 AM. It will take up HR 6, the Marriage Penalty and Family Tax Relief Act of 2001.
The Senate will continue its consideration of S 27, a 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 Avenue, NW, Washington DC.
8:15 AM. Sen. Tim Johnson (D-SD) will speak at the National Telephone Cooperative Association's Annual Legislative Conference. (The NTCA is meeting from March 26 through 30.) Location: Room Ticon/York/Valley Forge, Hyatt Regency Washington, 400 New Jersey Avenue, NW, Washington DC.
9:00-10:00 AM. USTR Robert Zoellick will address the House Policy Committee on the administration's trade agenda. This committee, which is chaired by Rep. Chris Cox (R-CA), is a Republican forum for the discussion of specific legislative initiatives, for the enunciation of official priorities, and for the resolution of inter-jurisdictional policy disputes. Location: Room H-122, The Capitol.
10:00 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing titled FCC Chairman Michael Powell: Agenda and Plans for Reform of the FCC. Room 2123, Rayburn Building.
10:00 AM. The House Ways and Means Committee's Trade Subcommittee will hold a hearing titled Is the United States Losing Ground as Its Trading Partners Move Ahead? Location: Room 1100, Longworth Building.
11:30 AM. The Senate Finance Committee will hold a hearing to on the nominations of Kenneth Dam to be Deputy Secretary of the Treasury, David Aufhauser to be General Counsel of the Department of the Treasury, Michele Davis of Virginia to be an Assistant Secretary of the Treasury, and Faryar Shirzad to be an Assistant Secretary of Commerce. Location: Room 215, Dirksen Building.
12:15 PM. The Federal Communications Bar Association will hold a cable luncheon. The speaker will be Susan Eid, Legal Advisor to FCC Commissioner Michael Powell. The price is $15. Location: NCTA, 1724 Massachusetts Ave., NW, Washington DC. RSVP to Arlice Johnson.
1:00 - 4:00 PM. The FCC's Common Carrier Bureau and Office of Engineering and Technology will host a public forum titled "Transmission Capability Between the Central Office and End-Users in Next Generation Networks." Location: FCC, Room TW-C305 (Commission Meeting Room), 445 12th Street, SW, Washington DC.
3:30 PM. Molly Boast, Acting Director of the FTC's Bureau of Competition, will speak at the American Bar Association's Antitrust Section's annual meeting. Location: JW Marriott Hotel, 1331 Pennsylvania Avenue, NW, Washington DC.
3/28. Rep. Fred Upton (R-MI) announced that the House Commerce Committee's Telecom Subcommittee will hold a hearing titled the E-Rate and Filtering: A Review of the Children's Internet Protection Act on April 4. The Children's Internet Protection Act (CIPA) requires schools and libraries receiving e-rate subsidies to use pormography filtering technology on Internet access computers used by children. On March 20 the Multnomah County Public Library (Portland Oregon area) and other plaintiffs filed a complaint [PDF] in U.S. District Court (EDPa) against the U.S. and other defendants challenging the constitutionality of the CIPA. The American Library Association and others filed a separate complaint [PDF].
SEC & the Internet
3/26. Paul Roye, Director of the SEC's Division of Investment Management gave a speech in Washington DC titled "Managing the Revolution" in which he addressed the E-SIGN Act, the Internet, and other topics. He stated that "the explosive growth of the Internet and the movement of investors and advisers online does not mean that our statutes do not apply to products and services offered on the web; they apply irrespective of the medium used to deliver these services."
FTC Rules
3/28. The FTC announced that it has approved amendments to the FTC's Regulations on Organization, Procedure and Rules of Practice. The changes include electronic filing requirements, new procedures for expert discovery, in camera motions and foreign subpoenas, and changes in the format requirements for briefs. See, notice to be published in the Federal Register.
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