Tech Law Journal Daily E-Mail Alert
April 18, 2001, 8:00 AM ET, Alert No. 168.
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4/17. The California Court of Appeal issued its opinion [PDF] in Visionshape v. Kofax Image Products. Kofax manufactures video boards used to connect document scanners to personal computers. Visionshape and Kofax marketed competing software that was compatible with Kofax video boards. In September 1997 Kofax released a new video board that was compatible with its software, but not Visionshape's. Visionshape filed a complaint against Kofax alleging (1) unlawful loss leader sales, (2) unlawful sales below cost, (3) unlawful tying arrangement, (4) intentional interference with prospective economic advantage, (5) negligent interference with prospective economic advantage, and (6) unfair competition. Kofax filed a demurrer that the complaint failed to state a claim. The trial court sustained the demurrer, without leave to amend, and entered a judgment of dismissal. Visionshape brought this appeal. The Court of Appeal affirmed.
4/13. The Department of Transportation (DOT) announced that it will not prevent Orbitz, an online travel agency being developed by five major airlines, from beginning operations. Nor will it require Orbitz to change its business strategy at this time. See, DOT release. Jeff Katz, CEO of Orbitz, said in a prepared statement that "Orbitz continues moving full-speed toward its June launch following today's release of a DOT letter giving Orbitz the green light. After an exhaustive review of our business plan and corporate documents, the DOT has clearly confirmed our position that Orbitz is pro-competitive and fully compliant with the law." The American Antitrust Institute (AAI), Consumer Federation of America, and other groups had opposed the venture. See, AAI release of April 8. Other groups, including the Association for Competitive Technology (ACT) and the Progressive Policy Institute, supported Orbitz's bid for regulatory approval. See, ACT release.
Slamming & Cramming
4/17. The FCC released an Order [PDF] imposing a  fine against AT&T for slamming -- the authorized switching of consumers' long distance carriers. The FCC found that AT&T had slammed 11 customers. AT&T argued that the slamming was unintentional. The FCC fined AT&T $520,000. See, FCC Order of Forefeiture and Enforcement Bureau release.
4/17. The FTC reached a consent agreement with the owners and operators of several pormographic web sites who made false and deceptive statements regarding free trial memberships, and then billed credit and debit card accounts without authorization. The FTC's administrative complaint states that the defendants promised free trial memberships, but then "immediately charge consumers' credit or debit cards for one month's membership fee effective as of the date that the consumers first provide credit or debit card information and agree to participate in the free trial membership offers". Under the terms of the Agreement Containing Consent Order to Cease and Desist, Voice Media Inc, and its owners and officers, Ron Levi and Paul Lesser, agreed not to lie to their customers any more. However, they were not fined. See also, FTC release.
4/16. The Center for Democracy and Technology, other groups, and academics, wrote a letter to Mitch Daniels, Director of the Office of Management and Budget, urging him to promptly fill the position of Chief Privacy Counselor at the OMB.
4/17. PSINet released 4th quarter results. It stated that "the Company's cash, cash equivalents, short-term investments and marketable securities, including the proceeds from the sale of PSINet Transactions Solutions on April 3, 2001, are not expected to be sufficient to meet the Company's anticipated cash needs. ... These efforts are likely to involve reorganization under the federal bankruptcy code." See, PSINet release.
New Documents
Bush: speech re free trade and fast track, 4/17 (HTML, WH).
USCA: opinion in New Kayak Pool v. Island Pools re trademark infringement, 4/17 (HTML, USCA).
USCA: opinion in Medtronic v. ACS, a case regarding arbitration clauses and patent infringement claims, 4/17 (TXT, USCA).
CCA: opinion in Visionshape v. Kofax Image Products re tying, 4/17 (PDF, CCA).
CDT: letter to OMB Director Daniels re privacy, 4/16 (HTML, CDT).
FCC: order imposing fine for slamming, 4/17 (PDF, FCC).
FTC: complaint and Agreement Containing Consent Order in web site cramming matter, 4/17 (HTML, FTC).
4/17. President Bush gave a speech to the Organization of American States in Washington DC in which he advocated free trade. "Open trade fuels the engines of economic growth that creates new jobs and new income. It applies the power of markets to the needs of the poor. It spurs the process of economic and legal reform. It helps dismantle protectionist bureaucracies that stifle incentive and invite corruption. And open trade reenforces the habits of liberty that sustain democracy over the long term. For all these reasons, my administration is committed to pursuing open trade at every opportunity. We'll pursue open trade bilaterally, with individual nations such as Chile and Singapore and Jordan. We'll pursue open trade globally through a new round of multilateral negotiations. We want to open global markets so that our farmers and ranchers and workers and service providers and high-tech entrepreneurs can enjoy the benefits of a more integrated world. And, of course, we'll pursue these goals throughout our hemisphere through the free trade area of the Americas."
President Bush also addressed fast track trade negotiating authority. "Since open trade is one of my top priorities for our hemisphere, gaining U.S. trade promotion authority is one of my top priorities in Congress. I made this clear in my first address to the Congress. We have reinforced this message in meetings my Cabinet officers and I have had with over 100 members of Congress. Trade promotion authority gives our trading partners confidence that they can rely on the deals that they negotiate. It allows us to seize opportunities to expand the circle of trade and prosperity. We're now actively working with Congress on a strategy for passing legislation, granting the trade promotion authority. We'll intensify this effort when I return from Quebec, and I'm confident we'll succeed."
4/13. Twelve movie and entertainment companies settled their copyright infringement action against RecordTV and David Simon. The twelve companies filed a complaint in U.S. District Court (CDCal) on June 15, 2000, against RecordTV and its founder, David Simon, alleging copyright infringement, trademark infringement, unfair competition in violation of the Lanham Act, violation of the Cable Communications Policy Act, unfair competition under California law, and common law unfair competition. RecordTV operated a web site that made unauthorized copies of Plaintiffs' copyrighted TV programs and movies from a Los Angeles area cable TV signal, and then streamed them over the Internet. The District Court entered an injunction against Simon enjoining him from streaming plaintiffs' copyrighted works over the Internet and using plaintiffs' trademarks to advertise his website. Simon must also pay plaintiffs $50,000 for legal fees. However, Plaintiffs did not recover any damages. Jack Valenti, P/CEO of the MPAA, stated that "This settlement should make clear that one cannot create a website that does not respect Copyright Law." See, MPAA release and RecordTV release
4/17. The U.S. Court of Appeals (2ndCir) issued its opinion in New Kayak Pool v. Island Pools, a trademark infringement case. Both New Kayak Pool and Island Pools make above ground swimming pools and accessories. Both market their products via mail order catalogues. Kayak has registered the trademark "Kayak Pools." Island published a catalogue in 1999 which stated "KayakŪ Pool Owners: We Carry a Complete Line of Parts and Supplies for Your Pool." Kayak filed a complaint in U.S. District Court (WDNY) alleging trademark infringement and unfair competition under the Lanham Act against Island, and seeking injunctive relief. The District Court denied Kayak's request for injunctive relief. This appeal followed. The Appeals court vacated and remanded, with instructions to apply the multi-factor balancing test articulated in Polaroid v. Polarad, 287 F.2d 492 (2d Cir. 1961).
Patent Cases
4/17. The U.S. Court of Appeals (3rdCir) issued its opinion in Medtronic AVE v. Advanced Cardiovascular Systems, a case regarding arbitration clauses and patent infringement claims. Medtronic filed a complaint in U.S. District Court (DDel) against Advanced Cardiovascular Systems (ACS) alleging patent infringement. ACS sought a stay of the patent infringement litigation pending arbitration so that it could enforce the arbitration clauses in two agreements. The District Court denied the motion to stay, and the Appeals Court affirmed.
4/17. The U.S. Court of Appeals (FedCir) issued its opinion in Harry Schoell v. Regal Marine, a patent infringement case. Schoell sued Regal Marine alleging infringement of U.S. Patent No. 5,456,202, which relates to boat hulls. The Appeals Court affirmed the District Court's judgment that Regal Marine had not infringed plaintiff's patent, either literally, or under the doctrine of equivalents.
4/17. President Bush will nominate Clark Randt to be U.S. Ambassador to the People's Republic of China. Randt is currently a partner in the Hong Kong office of the law firm of Shearman & Sterling. He is partner in the firm's Mergers and Acquisitions and Corporate Finance Groups. He specializes in direct foreign investment, capital markets and financing transactions in the Asia-Pacific region. He also heads the firm's China practice. He speaks Chinese Mandarin. He also went to college with George Bush, where the two were fraternity brothers.
4/17. President Bush announced his intent to nominate Michael Garcia to be Assistant Secretary of Commerce for Export Enforcement. Garcia has been an Assistant U.S. Attorney for the Southern District of New York since 1992. See, release.
4/16. Daniel Dorosin joined the Palo Alto office of the law firm of Fenwick & West as a partner its Corporate Group. He will focus on advising venture-backed start-up companies. See, release.
4/10. Allen Sussman joined the Los Angeles office of the law firm of Morrison & Foerster as a partner. He has a public corporate securities practice focused upon middle market technology and digital media companies. He previously worked at the law firm of Brobeck Phleger & Harrison. See, release.
The USPTO will hold an examination for persons seeking registration before the USPTO as patent attorneys and agents. See, USPTO release.
Deadline to file reply comments with the The NTIA regarding its Notice of Proposed Rulemaking (NPRM) regarding compensating incumbent federal agency users in the 1755-1850 MHz band that may be required to modify their systems as a result of spectrum reallocation for 3G wireless uses. The NTIA released the NPRM on Jan. 17. See, TLJ story.
Deadline to submit comments to the Commodities Futures Trades Commission regarding its proposed privacy rules pursuant to the Gramm Leach Bliley Act. See, notice in the Federal Register, March 19, 2001, Vol. 66, No. 53, Pages 15549 - 15576. See also, CFTC release.
9:00 AM. The Department of Commerce's Bureau of Export Administration's Information Systems Technical Advisory Committee (ISTAC) will hold the first of two days of meetings. The ISTAC advises the Office of the Assistant Secretary for Export Administration on technical questions that affect the level of export controls applicable to information systems equipment and technology. See, notice in Federal Register, April 3, 2001, Vol. 66, No. 64, at Page 17683. Location: Hoover Building, Room 3884, 14th Street between Pennsylvania Ave. & Constitution Ave., NW., Washington DC.
12:00 NOON. The Federal Communications Bar Association's Legislative Committee will host a brown bag lunch. The speakers will be Paul Jackson (FCC Office of Legislative and Intergovernmental Affairs) and Joe Gattuso (NTIA Congressional Affairs Office). Location: Holland & Knight, 2099 Pennsylvania Avenue, Suite 100, Washington DC. RSVP to Marvin Rosenberg.
12:00 NOON. Deadline to submit comments to the Federal Election Commission regarding its draft advisory opinion regarding Morgan Stanley Dean Witter's plans to use a web site to authorize payroll deductions for political actions committees. MSDW submitted a Request for Advisory Opinion [PDF] requesting an opinion that it is permissible, pursuant to the E-SIGN Act, to use electronic signatures to authorize payroll deductions for the MSDW political action committee. The draft advisory opinion permits the activity, but does not rely upon the E-SIGN Act.
12:15 PM. The Federal Communications Bar Association's Young Lawyer's Committee will hold a brown bag lunch. Jonathan Smollen, Legal Advisor to FTC Commissioner Thomas Leary, will speak on "Developments in Privacy Law." Location: Wiley Rein & Fielding, 1750 K Street, NW, 5 E Conference Center.
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