Tech Law Journal Daily E-Mail Alert
May 11, 2001, 8:00 AM ET, Alert No. 185.
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SPAM Hearing
5/10. The House Judiciary Committee held a hearing on HR 718, the Unsolicited Commercial Electronic Mail Act of 2001, and HR 1017, the Anti-Spamming Act of 2001. HR 718, sponsored by Rep. Heather Wilson (R-NM) and Rep. Gene Green (D-TX), has already been approved by the House Commerce Committee. The Committee heard testimony from business group representatives in opposition to pending anti spam legislation. See, prepared statements of Wayne Crews (Cato Institute), Marc Lackritz (Securities Industry Association), Rick Lane (Chamber of Commerce), Paul Misener (
Crews testified that "Laws supposedly designed to halt spam can do more harm than good." Lackritz testified that "we believe enacting legislation that frustrates the innovative use of the Internet would be bad and misguided public policy. Moreover, it would constitute a severe over-reaction to a problem that can be addressed with a narrowly tailored solution along the lines of HR 1017." Lane testified that "the primary focus of legislation regarding commercial e-mail should center-around combating the sending of fraudulent and deceptive e-mail." Misener testified that HR 718 "makes a good effort to prohibit egregious e-mail practices. Unfortunately, we believe this bill goes too far to limit such practices and would inadvertently constrain legitimate business activities."
Patent Hearing
5/10. The House Judiciary Committee's Subcommittee on the Courts, the Internet, and Intellectual Property held a hearing titled "Patents: Improving Quality and Curing Defects." See, prepared statements of Rep. Howard Coble (R-NC), James Cottone (National Intellectual Property Researchers Association), Michael Kirk (American Intellectual Property Law Association), Jeffrey Kushan (Powell Goldstein), and David Martin (M•CAM Inc.).
Fast Track
5/10. President George Bush sent a cover letter to Congressional leaders in which he stated that "I have placed the enactment of U.S. Trade Promotion Authority at the top of my trade legislative agenda."
TRIPS, Software and E-Commerce
5/4. The Business Software Alliance (BSA) wrote a letter to USTR Robert Zoellick identifying several trade issues that affect software companies. The letter states that "Software piracy continues to be a serious problem. Many WTO members have yet to fully implement their TRIPs obligations; and too many others are not taking effective enforcement actions." The letter also states that "Tariffs on computers and peripherals are still very high in some countries, creating a substantial impediment to U.S. exports of information technology equipment." Finally, the letter addresses two e-commerce issues. First, it addresses "the classification for trade purposes of downloaded products. Since software can be downloaded (as a good) or delivered by an ASP (as a service), software provided via the Internet can be either as a good or a service, depending on the business model. It is our firmly held view that software and other products acquired through networks by means of a download, should be treated as a good for classification purposes, and subject to the same trade rules as like products acquired through more traditional means." Also, the letter states that there is "the need to update our trade agreements to reflect the array of new Internet-related products and services that have evolved over the past 10 years since the conclusion of the Uruguay Round."
Commerce Dept. Nominees
5/10. The Senate Banking Committee approved four of President Bush's nominees: Ken Juster (Undersecretary of Commerce for Export Administration), Grant Aldonas (Undersecretary of Commerce for International Trade), Maria Cino (Asst. Sec. of Commerce and Director General of the U.S. and Foreign Commercial Service), and Glenn Hubbard (Chairman of the President's Council of Economic Advisers). See, release.
New Documents
Bush: letter to Congress re fast track trade negotiating authority, 5/10 (HTML, White House).
Sachs: speech re FCC's NOI on interactive TV, 5/9 (HTML, NCTA).
USCA: opinion in McCook Metals v. Alcoa re jurisdiction of the Federal Circuit, 5/10 (HTML, USCA).
USCAopinion in Geffon v. Micrion re securities class actions, 5/10 (HTML, USCA).
Unger: speech re securities regulation and the Internet, 5/6 (HTML, SEC).
FCC Apppointments
5/10. FCC Chairman Michael Powell announced that W. Kenneth Ferree will be the new Chief of the Cable Services Bureau, effective May 21, 2001. He replaces Deborah Lathen. Ferree is a partner at Goldberg Godles Wiener & Wright a small Washington DC law office specializing in communications law. He is also an adjunct professor at Georgetown University Law Center, where he teaches communications law and professional responsibility. He is also the author of Communications Law and Regulation. See, FCC release.
5/10. FCC Chairman Michael Powell announced that Julius Knapp will be a Deputy Chief of the Office of Engineering and Technology (OET). Knapp is currently Chief of the Policy and Rules Division in OET and oversees spectrum allocations and technical rules for radio frequency devices as well as coordination of radiofrequency issues with the Federal Government. He has been with the FCC for 26 years.
FCC Dead Sharks
5/9. NCTA President Robert Sachs gave a speech in Orlando, Florida, in which he addressed FCC regulation of interactive cable services. He stated that "A great deal of our work at NCTA is encouraging public policy that gives technology the free market running room it needs to grow. A case in point is the Notice of Inquiry on Interactive TV which the FCC put out for comment in January. ... But we consider regulation of yet to be developed services to be counter- productive to their very development. There are those, for commercial reasons of their own, who want the government to regulate Interactive Television before it's ever launched. And it's a bit disconcerting that they have gotten as far as an FCC Notice of Inquiry. FCC Chairman Michael Powell recently commented on whether it's wise to start regulating ITV before the market is even visible. As the Chairman put it: 'I don't believe in regulating phantoms.' I couldn’t agree more. And given the Chairman's caution, it's unlikely that this particular effort will get very far." However, Sachs concluded, "It's like finding a dead shark in your swimming pool."
Privacy Commission
5/9. Sen. Fred Thompson (R-TN) and Sen. Herb Kohl (D-WI) introduced the "Citizens' Privacy Commission Act," a bill to establish an 11 member commission to examine how federal, state, and local governments collect and use personal information, and to make recommendations to Congress. See, Thompson release.
5/10. A delegation from the European Union that is in Washington DC to investigate Echelon condemned several federal agencies for not meeting with it. Carlos Coelho, Chairman of the European Parliament's Temporary Committee on the Echelon Interception System, released a statement which included the following: "we are concerned and dismayed that scheduled meetings with the State Department, with the Advocacy Centre of the Department of Commerce were cancelled at the last minute without a satisfactory explanation. We are very disappointed by the last-minute reluctance of the CIA and the NSA to meet our delegation in spite of the advanced preparations that had been made. As a result we are cutting short our visit to Washington and returning to Europe immediately."
SEC News
5/10. Rep. Mike Oxley (R-OH), Chairman of the House Financial Services Committee, stated that he welcomes President Bush's statement that he intends to nominate Harvey Pitt to be Chairman of the SEC. He stated that "I look forward to working with him as we use the advantages of modern technology to advance our capital markets in the world’s financial arena and to make the advantages of investing accessible to more and more Americans." See, release.
5/6. Laura Unger, Acting Chairman of the SEC, gave a speech Los Angeles regarding investing, securities regulation and the Internet in which she addressed the SEC's new Order Execution and Routing Disclosure Rules, whether financial portals should register as broker- dealers, Regulation FD, potential conflicts of analysts, and Internet fraud.
Securities Class Actions
5/10. The U.S. Court of Appeals (1stCir) issued its opinion in Geffon v. Micrion, a class action securities suit against Micrion and several of its officers. Micrion, which has since merged with FEI Company, produced focused ion beam systems for semiconductor mask repair and device edit applications. The District Court granted defendant's motion for summary judgment on the grounds that there was no genuine dispute of material fact as to whether the statements in question were misleading or fraudulent. (Geffon v. Micrion, 76 F. Supp. 2d 134.) The Court of Appeals affirmed on the grounds that plaintiffs adduced insufficient evidence of defendants' scienter.
Securities Fraud
5/9. The SEC filed a civil complaint in U.S. District Court (DMass) against Arcangelo Capozzolo and Market Traders alleging violation of federal securities laws. Capozzolo is the operator of a stock recommendations web site. Market Traders is his company. The complaint alleges that the defendants violated § 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder by making false and misleading statements on in the web site, and in bulk e-mail. In addition, the defendants agreed, without admitting or denying the allegations, to the entry of a permanent injunction and to the imposition of a civil penalty against Market Traders. 
DOJ Nominations
5/10. The Senate Judiciary Committee held an executive business meeting. The Committee approved the nominations of Charles James to be Assistant Attorney General in charge of the Antitrust Division, Daniel Bryant to be Assistant Attorney General for legislative affairs, and Larry Thompson to be Deputy Attorney General. However, the Committee again delayed its vote on the nomination of Ted Olson to be Solicitor General.
Deadline to file reply comments with the FCC in response to its Notice of Inquiry (NOI) regarding cable open access. (See, In the Matter of Nondiscrimination in the Distribution of Interactive Television Services Over Cable, CS Docket No. 01-7.) The deadline had been April 20, but was extended. The FCC's electronic filing system contains 27 original comments.
Deadline to file comments with the FCC in response to its request for comments regarding the cable ownership limits imposed upon AT&T by the FCC in its AT&T Time Warner merger review proceeding, in light of the March 2, 2001, opinion of the U.S. Court of Appeals in Time Warner v. FCC, 249 F.3d 1126 (D.C. Cir. 2001). (CS Docket No. 99-251.) See, FCC notice.
12:30 PM. The Federal Communications Bar Association will host a lunch. The speaker will be Rep. Fred Upton (R-MI). Location: Capitol Hill Hyatt, 400 New Jersey Ave., NW, Washington DC. The FCBA is no longer accepting RSVPs.
12:30 PM. William Gates, Sr., a founder of the Seattle based law firm of Preston Gates, and a Co-Chair of the Bill and Melinda Gates Foundation, will speak at a National Press Club luncheon. Location: Ballroom, National Press Club, 529 14th St. NW, 13th Floor, Washington DC.
SBC Missouri 271
5/10. The Antitrust Division of the Department of Justice (DOJ) submitted an analysis to the FCC regarding SBC's Section 271 application to provide long distance service in Missouri. The DOJ recommended that the FCC should independently review the prices that SBC charges its competitors for use of its network. The DOJ stated that many of the prices charged by SBC for the use of "unbundled network elements" are significantly higher in Missouri than in states where SBC has already been permitted to provide long distance service. Also, the DOJ stated that there is limited use of those elements by competitors, and indications that Missouri prices might not be based on forward looking costs. See, DOJ release. SBC SVP Priscilla Ardoin, stated in response that "SBC is confident that it will be able to demonstrate to the FCC that the evidence supports approval of our Missouri long distance application." See, SBC release.
Fed Cir Jurisdiction
5/10. The U.S. Court of Appeals (4thCir) issued its opinion in McCook Metals v. Alcoa, a case regarding appellate jurisdiction over an appeal from a discovery order in a proceeding that is ancillary to a proceeding regarding patent validity and enforceability. The 4th Circuit transferred the appeal to the Federal Circuit. Background: McCook filed a complaint against Alcoa in U.S. District Court (NDIll) alleging interference with customer contracts and prospective business advantage in violation of state law, monopolization of the relevant product market in violation of the Sherman Act, and that two of Alcoa's patents for making high strength aluminum alloy were neither valid nor enforceable. McCook then obtained a third party subpoena from the U.S. District Court (EDVa) directing Reynolds Metals to appear, testify, and produce documents at a deposition. Reynolds refused, citing work product and attorney client privileges. The District Court (EDVa) upheld Reynolds objections. McCook appealed to the Appeals Court (4thCir). Holding: The Appeals Court (4thCir) reasoned that because jurisdiction in the underlying action is based in part on 28 U.S.C. § 1338, which confers jurisdiction upon district courts in patent matters, any review of the ancillary discovery ruling must be sought from the U.S. Court of Appeals for the Federal Circuit under 28 U.S.C. §§ 1292(c) and 1295(a). The Appeals Court then transferred the appeal to the Federal Circuit pursuant to 28 U.S.C. § 1631.
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