Tech Law Journal Daily E-Mail Alert
April 10, 2001, 8:00 AM ET, Alert No. 162.
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4/9. House Majority Leader Dick Armey (R-TX) released a memorandum titled "Privacy: For those Who Live in Glass Houses." It argues that federal government web sites have a bad record of complying with FTC's "Fair Information Practices," and that the poor security of government databases puts the personal information of citizens at risk. He concludes that "Those who live in glass houses shouldn't throw stones. And right now, the federal government's online house is made of pretty thin glass." He also stated that "Right now, Congress is an inexperienced and amateur mechanic trying to tinker with the supercharged, high-tech engine of our economy. We need to be careful not to let our good intentions get in the way of common sense."
The EPIC wrote letter to Rep. Armey regarding privacy. It stated that Congress should pass legislation to create a new federal agency to oversee enforcement of the Privacy Act of 1974, amend the federal wiretap statues to address location data, and suspend operation of the FBI's e-mail surveillance program named Carnivore.
Court Opinions
4/9. The U.S. Court of Appeals (4thCir) issued an "unpublished" opinion in Agora v. Axxess, a defamation case. Agora, which publishes a monthly investment advice magazine, filed a complaint in U.S. District Court (DMd) against Axxess, which operates an investment advice web site named Financial Web, alleging defamation. Financial Web had referred to Agora's publication as an "unpaid promoter" of stocks. The District Court dismissed pursuant to Rule 12(b)(6) for failure to state a claim. The Appeals Court affirmed.
4/9. The U.S. Court of Appeals (FedCir) issued its opinion in Mentor v. Medical Device Alliance, a patent infringement case in which the trial judge granted JMOL following a jury verdict. Mentor sued Medical Device Alliance, Lysonix, and Misonix for infringement of U.S. Patent 4,886,491. A jury returned a verdict of direct, contributory, and inducement of infringement. The District Court then granted judgment as a matter of law (JMOL) that a best mode violation occurred, granted Misonix's motion for JMOL that it did not infringe Mentor's patent, and granted a conditional new trial (in the event that this court reverses its JMOL on the best mode issue) for anticipation, obviousness, inequitable conduct, and contributory infringement by all defendants. The Appeals Court determined that the jury's verdict was supported by substantial evidence, and reversed the JMOL on the ground of a best mode violation. The Appeals Court also reversed the grant of a new trial, and the grant of a JMOL of non-infringement by Misonix.
New Documents
Bush: budget for FY 2002, 4/9 (HTML, WH).
Bush: Commerce Dept. Budget, 4/9 (PDF 435KB, WH).
Bush: Justice Dept. Budget, 4/9 (PDF 440KB, WH).
Bush: Independent Agencies Budgets, including FCC, FTC, and SEC, 4/9 (PDF 1MB, WH).
Armey: memorandum re privacy, 4/9 (HTML, Armey).
EPIC: letter to Armey on privacy, 4/9 (HTML, EPIC).
Quote of the Day
"Web sites are simply the way that most of us interact on the Internet today -- that may not be true tomorrow. Already, a substantial amount of Internet data, such as stock trades, travels by cell phone or other mobile devices. Imagine trying to read a legal privacy notice on your cell phone before opening that E-trade account. Should typing your social security number on your phone keys be treated differently than typing them in on a computer keyboard? Imposing notice rules on web sites may be as relevant next year as requiring airbags on horse buggies."

Rep. Dick Armey (R-TX), April 9 memorandum on privacy.
President's Budget
4/9. President Bush submitted a budget to the Congress for Fiscal Year 2002 that includes modest increases for most technology industry related agencies. It also proposes making permanent the R&D tax credit, continuing the diversion of USPTO user fees, and reducing NTIA grant funding. Congressional Republicans praised the budget, while Democrats criticized it. Sen. Charles Grassley (R-IA) stated that "Historically, presidents' budgets have been dead on arrival, but that's not true with this one. It's a blueprint that's survived mostly intact with strong bipartisan support... In our system, the president proposes and the Congress disposes." House Minority Leader Richard Gephardt (D-MO) said the budget is "a partisan document rich in ideology and short on balance, fiscal discipline and common-sense responsibility."
The FCC budget would be increased from $230,000,000 in FY 2001 to $248,545,000 in FY 2002. See, independent agencies budgets [PDF, 1MB]. See also, FCC release. The FCC, which has statutory authority to regulate broadcast TV and radio, telephony, one way cable programming service, and other old communications industries, is in the process of transforming itself into the regulator of Internet related industries. However, it currently lacks the staff and technical expertise to accomplish this. The new FCC Chairman, Michael Powell, had sought a much larger increase in the FCC budget.
Rep. Billy Tauzin (R-LA), the Chairman of the House Commerce Committee, which oversees the FCC, praised the budget overall, but added, "I am also deeply concerned that the President has ignored recommendations to upgrade the Federal Communication Commission's outdated engineering capabilities. FCC Chairman Michael Powell has made a compelling case to Congress for the need for additional money. Given the FCC's enormous responsibilities in the digital age, I will personally ask the White House to reconsider the agency's recommended funding level." He added that "the President's decision to postpone certain spectrum auctions makes a lot of sense to me, and I will support his efforts. But penalizing America's broadcasters -- who are struggling to make the transition to digital -- with punitive spectrum fees is a terrible idea, and I will fight it every inch of the way."
The FTC budget would be increased from $145,254,000 to $156,270,000. See, independent agencies budget [PDF, 1MB] and FTC FY 2002 Congressional Budget Justification [PDF, 380KB]. The FTC has both antitrust authority and consumer protection authority. In recent years it has increasingly used its antitrust authority to review mergers of high tech companies. It has also increased its activities in the areas of Internet fraud and online privacy.
The USPTO is funded out of user fees, and this budget would continue the practice of diverting some of these fees to fund other government programs. See, Commerce Dept. Budget [PDF, 435KB]. The Commerce Department also includes a number of other units that are relevant to technology industries. The Bureau of Export Administration, which controls the export of high tech software and equipment, would have its budget increased from $64,854,000 to $68,893,000. The NIST budget would be increased from $312,617,000 to $347,288,000.
The budget for the Antitrust Division of the Justice Department would go from $95,838,000 to $89,423,000. See, Justice Dept. Budget [PDF, 440KB], at page 9.
Spectrum News
4/9. The NTIA published a notice in the Federal Register that it is conducting an investigation of current and future use of radio frequency spectrum in the U.S. by providers of energy, water and railroad services, and how current and emerging technology trends affect use of the radio spectrum. The notice also requests public comments. Comments must be received on or before June 8, 2001. The CJSJ appropriations bill for FY 2002 requires that the NTIA conduct this study. See, Federal Register, April 9, 2001, Vol. 66, No. 68, at Pages 18448 - 18449. See also, copy of notice in the NTIA web site.
4/9. Rebecca Beynon, Senior Counsel to outgoing FCC Commissioner Harold Furchtgott-Roth, will become Senior Advisor and Assistant General Counsel in the General Counsel's Office at the Office of Management and Budget. She will be replaced for the last few months of HFR's tenure by Samuel Feder, who is currently an attorney at the law firm of Harris Wiltshire. Prior to that, he worked at Kellogg Huber, and in the Federal Programs Branch of the Justice Department.
4/6. President Bush formally nominated Charles James to be an Assistant Attorney General. He will head the Antitrust Division. See, release.
4/5. Douglas Davison joined the Washington DC office of the law firm of Wilmer Cutler & Pickering as Of Counsel. He previously was Counsel to former SEC Chairman Arthur Levitt. See, WCP release [PDF]. See also, SEC release of Aug. 4, 2000.
4/2. The law firm of Latham & Watkins made Karen Brinkmann a partner. She works in the Washington DC office, and focuses on regulatory and transactional issues in the telecommunications, information technology and electronic media sectors. She worked at the FCC from 1993 to 1997. See, release.
4/2. The law firm of Latham & Watkins made Marcellus Williamson a partner. He works in the Washington DC office, and focuses on antitrust matters, litigating Clayton, Sherman and Robinson-Patman cases and obtaining U.S. and international approvals for transactions. See, release.
4/4. The intellectual property law firm of Townsend Townsend & Crew elevated five attorneys to partner: John Baum, Mark Barrish, Byron Cooper, Stephen Pang, William Kezer. John Baum, of the San Francisco office, concentrates on trademark and copyright prosecution, licensing and litigation. He advises Internet businesses on domain name, trademark and copyright matters, and handling administrative procedures with the U.S. Customs Service relating to the protection of IPR and gray market goods. Mark Barrish, of the Palo Alto office, concentrates on developing patent portfolios in the medical device, fiberoptic and mechanical fields. Byron Cooper, of the Palo Alto office, handles patent cases involving integrated circuits, computer microprocessors, DRAMs, disk drive technology, software and video and sound compression. Stephen Pang, of the Palo Alto office, focuses on Internet and software-related technologies, primarily counseling and patent prosecution for emerging technology companies. William Kezer, of the Walnut Creek office, concentrates on chemical and biotechnology patent prosecution. See, release.
12:30 PM. The Federal Communications Bar Association will hold a luncheon, featuring Kevin Klose, President and CEO of National Public Radio. Location: Grand Hyatt Hotel, 1000 H Street, NW, Washington DC. RSVP to
1:00 - 2:30 PM. The FCC's Common Carrier Bureau's Accounting Safeguards Division will hold a public meeting to discuss policies and procedures for independent audits. Location: FCC, Portals II, 445 12th Street, SW, Room 6-B516, Washington DC.
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