Tech Law Journal Daily E-Mail Alert
May 16, 2001, 8:00 AM ET, Alert No. 188.
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FTC Halts Deceptive Ads of Juno and Gateway
5/15. The Federal Trade Commission (FTC) filed, and simultaneously settled, two administrative complaints alleging deceptive advertising practices in the marketing of Internet access services by Juno Online Services and Gateway. The FTC alleged that various acts of Juno and Gateway constituted unfair or deceptive acts or practices in or affecting commerce in violation of  5(a) of the Federal Trade Commission Act. In particular, both companies advertised as "free" services that were not in fact free. Both companies agreed to stop misrepresenting the prices of their services.
The FTC filed an administrative complaint [PDF] against Juno alleging that it misrepresented that consumers who participated in its free trial offers for its Premium Internet service would be able to cancel at any time before the free trial period ended and incur no charges if they were not satisfied. The FTC and Juno simultaneously settled the matter, with Juno agreeing to stop misrepresenting the price of its Internet services, to clearly and conspicuously disclose the cancellation terms for these services, and to provide adequate customer support to handle consumer requests to cancel. The proposed settlement also requires Juno to reimburse certain former subscribers for long distance telephone charges they incurred to use its services. See, Agreement Containing Consent Order [PDF]. See also, FTC release.
The FTC filed a separate administrative complaint against Gateway alleging that it misrepresented that it provided one year of free service with Internet access. The FTC and Gateway settled the matter, with Gateway agreeing to stop misrepresenting the price of its Internet services. See, Agreement Containing Consent Order.
Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection, had this to say: "Free Internet access often turned out too good to be true for many consumers, a fact made clear by a significant volume of complaints by consumers to the FTC. Hidden fees often lurked in minuscule fine print tucked away at the end of ads or service agreements. Today's agreement will help make sure more consumers don't get taken for a ride on the Internet highway when it comes to the true cost of Internet access." See, release.
The Commission voted 5-0 to proceed with both of these complaints. The settlement agreements will be subject to public comment, after which the Commission will decide whether to make them final. It very likely will approve them.
Software Defined Radio
5/15. Intel submitted a reply comment to the FCC in its proceeding regarding software defined radio. Intel recommended that "SDR rules (1) distinguish between radio control and user application software and not impose certification requirements on user application software and (2) permit a manufacturer to create an open SDR platform that would enable third parties to develop innovative programs that optimize RF parameters of the radio and seek certification as a Class III permissive change on their own. Experience in both the wireless and wired industries demonstrates the workability and benefit of market solutions that maintain network integration and foster the development of innovative products." (See, In the Matter of Authorization and Use of Software Defined Radio, ET Docket No. 00-47).
Sen. Hagel on Trade
5/14. Sen. Chuck Hagel (R-NE) gave an speech in the Senate on trade in which he advocated free trade, granting the President fast track trade negotiating authority, and launching a new round of WTO negotiations. He also linked advancement of free trade to human rights and stability. He stated: "Stability, security, economics, markets, communications, trade, and investments are all interconnected. ... Trade binds nations together in strategic and political alliances. Throughout history trade and commerce have been key instruments that have helped break down totalitarian governments and dictatorships, and opened the doors to democracy and higher standards of living ... Trade and international investment have helped pave the way for peace in many areas of the world. Trade and democracy are interconnected. Trade and investment lead to political and economic stability."
New Documents
FTC: administrative complaint and Agreement Containing Consent Order re deceptive advertising by Juno, 5/15 (PDF, FTC).
FTC: administrative complaint and Agreement Containing Consent Order re deceptive ads of Gateway, 5/15 (HTML, FTC).
Armey: letter to Sec. Thompson re government ID numbers, 5/15 (HTML, TLJ).
GAO: letter to Rep. Buyer re information technology at the Veterans' Administration, 5/15 (PDF, GAO).
Personal Jurisdiction in Patent Cases
5/15. The U.S. Court of Appeals (FedCir) issued its opinion in Inamed v. Kuzmak, a case involving personal jurisdiction in a patent case. Plaintiffs filed a complaint for declaratory relief pertaining to four patents against defendant Kuzmak in the U.S. District Court for the Central District of California (Los Angeles). Kuzmak, who registered the patents, resides in New Jersey. The plaintiffs are all corporations with their principal places of business in California. The District Court dismissed for lack of personal jurisdiction over the defendant. The Appeals Court reversed. Kuzmak had written an infringement letter to an attorney in New York who was the registered agent for a corporation that is a resident of California, and had negotiated license agreements and received royalty payments that were based on the manufacture of goods by a plaintiff in California; hence, he satisfied the minimum contacts requirements of International Shoe and its prodigy.
Draft Convention on Jurisdiction and Foreign Judgments
5/15. The U.S. Copyright Office held a public roundtable discussion on the intellectual property aspects of the preliminary draft Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters being negotiated by the Hague Conference on Private International Law. The draft Convention would create jurisdictional rules governing international lawsuits and provide for recognition and enforcement of judgments by the courts of member states. Member states would be required to recognize and enforce judgments covered by the Convention if the jurisdiction in the court rendering the judgment is founded on one of the bases of jurisdiction required by the Convention. The first part of a Diplomatic Conference is planned for June 2001, and the second part will be held in 2002, in The Hague. See also, notice of meeting.
More Intellectual Property News
5/15. The Senate Judiciary Committee postponed indefinitely its hearing on patents relating to business methods and the Internet. This committee often postpones matters.
5/15. DirecTV released a statement regarding a complaint that it filed on March 15 in U.S. District Court (CDCal) against 80 individuals alleging trafficking in illegal signal theft equipment. DirecTV, which is a unit of Hughes Electronics Corp., is a satellite television provider.
5/11. A trial jury of the U.S. District Court (NDIll) returned a verdict of guilty against Christian Morley for violation of the No Electronic Theft Act (NET Act). The NET Act, which was passed in 1997, amended copyright law to facilitate prosecution of Internet based copyright infringement. Since then, Justice Department prosecutions under the Act have been rare. While other prosecutions have resulted in plea agreements, this was the first case in which a jury convicted a defendant under the Act. See, BSA release.
Privacy News
5/15. Rep. Dick Armey (R-TX) wrote a letter to Secretary Tommy Thompson requesting that the Department of Health and Human Services halt its ongoing plans to mandate a "unique health identifier for individuals". Armey stated in his letter that the plan is illegal under legislation passed in 1998. (See, Public Law 106-554, 106th Congress.) He also stated that the plan would threaten the privacy of individuals' medical records. Armey wrote: "Imagine the implications for personal privacy if everyone had a government- issued medical ID number and the government had an unfettered search- and- seizure power over private medical records. That unfettered search- and- seizure power is currently poised to become law, thanks to the Clinton privacy regulations that are being finalized right now. The addition of a universal identifier would make that power all the more troubling."
5/15. Microsoft announced its intent to sign the Safe Harbor Agreement of the EU data directive. See, release.
5/15. The ICANN finalized accreditation agreements with the new .biz and .info top-level domain (TLD) registries. The registry operators, NeuLevel for .biz and Afilias for .info, were among seven registry operators for new TLDs selected by the ICANN Board of Directors in November of 2000. Both agreements provide for a multi step launch process, which allows trademark holders to submit trademark claims before the application process is opened. See, ICANN release.
U.S. Department of Commerce General Counsel Ted Kassinger stated that ".biz and .info will offer consumer choice, provide our entrepreneurs with new avenues to pursue their ideas and are a welcome addition to the domain name marketplace. We congratulate ICANN on this latest progress in introducing competition consistent with maintaining Internet stability." See, DOC release.
The House will meet at 10:00 AM for legislative business. The House may take up HR 1646, the State Department Authorization Act, HR 622, the Hope for Children Act, and/or HR 1, the No Child Left Behind Act of 2001. The Senate will continue its consideration of S 1, a bill to extend programs and activities under the Elementary and Secondary Education Act of 1965.
9:30 AM. The Senate Commerce Committee will hold a hearing on nominations to the Federal Trade Commission and the Department of Commerce. Location: Room 253, Russell Building. The agenda includes the following:
  Timothy Muris to be Chairman of the FTC.
  Kathleen Cooper to be Under Sec. of Commerce for Economic Affairs.
  Bruce Mehlman to be Asst. Sec. of Commerce for Technology Policy.
  Sean O'Hollaren to be Asst. Sec. for Governmental Affairs.
1:30 PM. The Senate Finance Committee will hold a confirmation hearing for many nominees, including Linnet Deily and Peter Allgeier to be Deputy USTRs. See, release [PDF].
Thursday, May 17
9:30 AM. The Senate Commerce Committee held a hearing on on nominations for the Federal Communications Commission. Location: Room 253, Russell Building. The agenda includes:
  Michael Powell to be FCC Chairman.
  Kathleen Abernathy to be a FCC Commissioner.
  Kevin Martin to be a FCC Commissioner.
  Michael Copps to be a FCC Commissioner.
10:00 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing HR 1765, a bill to increase penalties for common carrier violations of the Communications Act of 1934. Location: Room 2123, Rayburn Building.
10:00 AM. The Senate Judiciary Committee may hold an executive business meeting. Location: Room 226, Dirksen Building.
10:00 AM. The Senate Appropriations Committee's Subcommittee on Commerce, Justice, State, and the Judiciary will hold a hearing on proposed budget estimates for FY 2002 for the FBI, DEA, and INS. Location: Room 192, Dirksen Building.
POSTPONED. 10:00 AM. The House Government Reform Committee's Subcommittee on Government Efficiency, Financial Management, and Intergovernmental Relations will hold a hearing titled "Are Classified Computer Systems in the Federal Government Adequately Protected?" It will meet in open session at 10:00 AM, and in closed session at 1:30 PM. Location: Room 2247, Rayburn Building.
1:00 PM. The House Judiciary Committee's Subcommittee on the Courts, the Internet, and Intellectual Property will hold a hearing titled Music On The Internet. Location: Room 2141, Rayburn Building.
More News
5/15. The Senate Banking Committee met and voted on the nomination of James Jochum to be Assistant Secretary of Commerce for Export Administration. He was unanimously approved. There was no debate or discussion.
5/15. The GAO wrote a letter [PDF] to Rep. Steve Buyer (R-IN), Chairman of the House Veterans' Affairs Committee's Subcommittee on Oversight and Investigations, regarding information technology practices at the Veterans' Administration. The letter responds to questions from Rep. Buyer regarding the VA's lack of a Chief Information Officer, security weaknesses at the VA, the VA's lack of an integrated department wide enterprise architecture, and capital investment in information technology at the VA.
5/15. The House Judiciary Committee's Subcommittee on Immigration and Claims held a hearing on the Immigration and Naturalization Service (INS) and the Executive Office for Immigration Review (EOIR). See, prepared testimony of witnesses: Roy Beck (Numbers USA), Kevin Rooney (INS), Thomas Wenski (National Conference of Catholic Bishops).
5/14. Rep. Bill Barrett (D-WI) introduced HR 1825, the Consumer Debit Card Protection Act, a bill to amend the Electronic Fund Transfer Act to safeguard consumers in connection with the utilization of certain debit cards. The bill was referred to the Financial Services Committee.
5/15. The U.S. Court of Appeals (DC Cir) heard oral argument in U.S. Cell Corp. v. FCC, Appeal No. 00-1072.
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