Tech Law Journal Daily E-Mail Alert
May 21, 2001, 8:00 AM ET, Alert No. 191.
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DOC and VeriSign Reach Agreement
5/18 The Commerce Department (DOC), ICANN, and VeriSign reached an agreement in principle on additional terms to be included in the ICANN and VeriSign Registry Agreements and related agreements. See also, DOC release and VeriSign release.
Computer and Software Depreciation Bills
5/17. Rep. Mac Collins (R-GA) introduced HR 1895, the Computer Equipment Common Sense Depreciation Act, a bill to amend the Internal Revenue Code to establish a 2 year recovery period for depreciation of computers and peripheral equipment used in manufacturing. It was referred to the House Way and Means Committee, of which Collins is a member. This is one of several bills that would shorten or eliminate the depreciation period for business computers. On April 4, Rep. Jerry Weller (R-IL) and others introduced HR 1411, which provides for the expensing of qualified equipment and computer software. And, on April 6, Sen. Conrad Burns (R-MT) introduced S 752, which provides for a three year period.
Coble Bills on Reexamination of Patents
5/16. Rep. Howard Coble (R-NC), introduced HR 1866, an untitled bill to clarify the basis for granting requests for reexamination of patents. The bill would amend 35 U.S.C.  303(a) and  313(a) by adding the following language: "The existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office." The bill was referred to the House Judiciary Committee, and its Courts, Internet and Intellectual Property Subcommittee. Rep. Coble is the Chairman of this Subcommittee. The Subcommittee has already scheduled a mark up for Tuesday, May 22, at 10:00 AM.
5/17. Rep. Coble also introduced HR 1886, a bill to provide for appeals by third parties in certain patent reexamination proceedings. This bill is also scheduled for mark up on May 22.
Education Technology Bill
5/17. Rep. James Barcia (D-MI) and Rep. David Wu (D-OR) introduced HR 1889, a bill to improve the utilization of educational technologies in elementary and secondary education by creating an educational technology extension service. The bill was referred to the House Science Committee and the House Education and Workforce Committee.
Export Licensing Bill
5/17. Rep. Jeff Flake (R-AZ) introduced HR 1898, a bill to amend the Arms Export Control Act to update the export licensing requirements under that Act. The bill was referred to the House Committee on International Relations.
FCC Software Defined Radio NPRM
5/18. The FCC received six reply comments regarding its Notice of Propose Rule Making regarding on software defined radio (SDR). See, comments from AirNet Communications, Cingular Wireless, Industrial Telecommunications Association, SDR Forum, Sprint PCS, and Vanu. (ET Docket No. 00-47.)
SEC Regulation of Web Based Activities
5/18. Paul Roye, Director of the SEC's Division of Investment Management gave a speech to the Investment Company Institute in Washington DC in which he addressed web based baskets of securities, ETFs, and other topics. He stated that "The Internet has spurred a flurry of new products and ways of offering and delivering investment products and investment advisory services. It is incumbent upon regulators to understand these products and monitor their compliance with the federal securities laws." He said that the SEC is reviewing whether web based baskets of securities are investment companies, and whether the promoters should register as securities advisors.
Bush Trade Proclamation
5/18. President George Bush issued a proclamation regarding free trade in which he stated that "our exports support 12 million jobs that pay wages higher than the national average, and high-tech jobs supported by exports pay even more. It is no coincidence that the longest period of sustained economic growth in U.S. history has followed efforts to liberalize trade, such as the North American Free Trade Agreement and the Uruguay Round Agreement that established the World Trade Organization."
Financial Privacy
5/15. The Free Congress Foundation and other groups wrote a letter to Treasury Secretary Paul O'Neill regarding OECD and FATF violations of financial privacy. The letter states that the "current proposals of OECD and FATF attempt to institute the popularly rejected 'Know Your Customer' financial regulation, thereby sidestepping the domestic legislative process. We are concerned about the attempt to get Know Your Customer adopted as an international 'best practice' under the guise of increasing transparency." The letter concludes, "Our modern economy requires a liberal capital policy that engenders the consumer trust that comes with respect for privacy. We strongly urge you to make a clear statement instituting policies that respect financial privacy and that the Treasury Department opposes the type of reporting requirements being advanced by the OECD and FATF."
New Documents
Coble: HR 1866 re patent reexamination, 5/16 (HTML, LibCong).
Coble: HR 1886 re patent reexamination, 5/17 (HTML, LibCong).
Collins: HR 1895, the Computer Equipment Common Sense Depreciation Act, 5/17 (HTML, LibCong).
Berman: opening statement re intellectual property, music, and the Internet, 5/17 (HTML, TLJ).
FCF: letter to Treasury Sec. O'Neill re financial privacy, 5/15 (HTML, TLJ)
DOC: agreement in principle with ICANN and VeriSign, 5/18 (HTML, DOC).
GAO: report on information technology at the Defense Dept., 5/18 (PDF, GAO).
Roye: speech re SEC regulation of web based baskets of stocks, 5/18 (HTML, SEC).
ProComp: paper stating that Microsoft seeks to monopolize the Internet, 5/17 (PDF, ProComp).
Compulsory Licensing of Music on the Internet
5/17. The House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property held a hearing on music on the Internet. The hearing was attended by far more Representatives and spectators than other intellectual property related hearings. Twenty members of the Subcommittee, and non members sitting by permission, participated.
Rep. Howard Coble (R-NC), the Chairman of the Subcommittee, presided. He said in his opening statement that "Recent technological developments such as mp3 digital compression, streaming, and peer-to-peer file sharing have provided consumers with easy access to music on the Internet and fueled their interest in using the Internet as a primary way to enjoy music. Yet, this win-win opportunity for both the music industry and consumers has been hampered by services providing free access to unlicenced music, several lawsuits, disputed interpretations of copyright law, difficulty in properly licensing all of the rights, and developing effective means to thwart piracy." The hearing focused on the availability of music online, the technologies for providing music online, security for copyrighted music, the status of licensing by the various types of rights holders, and recommendations by some that the Congress extend compulsory licensing to music on the Internet.
Several witnesses argued that existing laws are complex and archane, that too many permissions are required, that music is not being made available online, and that Congress should therefore pass legislation providing for compulsory licensing for online streaming and downloading of music. In contrast, several other witnesses who represent various types of copyright holders testified that their copyrights are being licensing for the Internet, that technologies (and security for those technologies) is being developed, and Congress should therefore not enact any new legislation.
Robert Glaser, C/CEO of RealNetworks, testified that there are too many types of music publishing rights, and too many holders of these rights, for a negotiated licensing system to allow for online music subscription services to work. He wants Congress to step in and "streamline" the process with a "licensing system that allows for one-stop shopping" through compulsory licensing. See, prepared testimony.
Richard Robins, President of MP3.com, testified in favor of revising the language and implementation of 17 U.S.C. 115, regarding compulsory licensing. MP3.com provided a music storage service that allowed subscribers to store online their purchased CDs, and then play them back via the Internet. It was sued for copyright infringement, and lost. Robins testified that copyright law should be amended to permit this sort of activity without payment of further fees. He also stated that the Copyright Office should update  115 licensing procedures to provide that the cable and satellite compulsory license model applies to the "incidental" copying that is integral to Internet transmissions. See, prepared testimony.
Manus Cooney, a VP of Napster, did not testify, but submitted a written statement to the Subcommittee anyway. He wrote that Congress should pass compulsory licensing legislation.
Lyle Lovett, a song writer and performer, testified on behalf of the American Society of Composers, Authors and Publishers. ASCAP licenses the right of nondramatic public performance of its members' copyrighted musical compositions. He stated that "there is not a songwriter I know who opposes new technological ways to perform music. Technology has always been the friend of the songwriter; from piano rolls, to phonographs, to radio's development ... we have looked upon each of these revolutions in communications as new ways to enjoy our music; and, new ways for us to earn a living." He also stated that ASCAP has licensed every Internet user who has requests a license to perform ASCAP music, and that ASCAP has licensed about 2,200 web sites. He concluded, therefore, that "There is no justification for a compulsory license for Internet uses of ASCAP music."
Edgar Bronfman, Executive Vice Chairman of Vivendi Universal, stated that "Universal has invested many tens of millions of dollars in developing a environment for the delivery and enjoyment of digitized music. But a rational, dependable, long-term business plan has two prerequisites. First, we need a strong legal framework to protect our copyrighted music. Second, we need technology solutions that are ready for a global audience. He stated that "The legal framework appears to be in place. The DMCA has done a good job of updating the Copyright Act for the digital age. Importantly, recent court decisions have clearly held that our property rights must be respected." He also stated that Universal is still working on the technology that provides security for copyrighted works. See, prepared statement.
Michael Stoller, a song writer who testified on behalf of the National Music Publishers Association, similarly testified that no new legislation should be passed at this time.
Rep. Howard Berman (D-CA), the ranking Democratic on the Subcommittee, said in his opening statement that music is being made available on line, and that there is no reason to mandate compulsory licensing. He began by observing that "it appears that the supply of online music is beginning to catch up with the demand. While the music industry may have been slow to jump into the online music market, lately the pace of online music deal-making has been dizzying." He cited the creation of Duet by Vivendi Universal, the creation of MusicNet by EMI, BMG, AOL Time Warner and RealNetworks, and other examples. He continued that "only in extraordinary circumstances, such as demonstrable market breakdowns caused by antitrust violations, does our government require property owners to make their property available to the public at government established rates. Furthermore, copyrights are Constitutionally sanctioned property, and music, despite its emotive power and cultural significance, is basically entertainment." He also stated that "convenience of access to entertainment seems a particularly weak justification for the abridgement of Constitutionally sanctioned property rights. It is especially difficult to justify government interference with property rights when the free market, however fitfully, appears to be moving in the right direction."
Rep. Berman also stated "I am disturbed by the implications of what would essentially be Internet-specific government regulation. ... Any Internet legislation we pass, it is argued, would be outdated before it was enacted, and might run the risk of freezing or stifling technological developments in the Internet sector." He concluded, "I see no need or good reason for sweeping legislation regarding online music."
Vivendi Universal to Buy MP3.com
5/18. Vivendi Universal announced that it will acquire MP3.com for $372 million in a friendly, combined cash and stock transaction. See, MP3.com release
WIPO and ASPs
5/18. The WIPO's Arbitration and Mediation Center and the Application Service Provider Industry Consortium (ASPIC) finalized a set of best practices and guidelines for dispute avoidance and resolution for the Application Service Provider (ASP) industry. See, WIPO release.
Today
The House will meet at 12:30 PM for morning hour and at 2:00 PM for legislative business. No recorded votes are expected before 6:00 PM. The House will consider several non technology related bills and resolutions under suspension of the rules.
The Senate bill convene at 9:30 AM. It will likely take up HR1836, the tax reconciliation bill, and amendments.
10:30 AM. FCC Chairman Michael Powell will be the keynote speaker at the Forrester Telecommunications Forum. Location: Marriott Wardman Park Hotel, 2400 Woodley Road, Washington DC.
Tuesday, May 22
9:00 AM. The USTR's Industry Sector Advisory Committee on Services (ISAC-13) will hold a meeting. The meeting will be open to the public from 9:00 to 9:45 AM, and closed to the public from 9:45 AM to 12:00 NOON. See, notice in Federal Register.
9:45 AM. FTC Commissioner Thomas Leary will participate in a panel discussion titled Securing Private Data - How to Assure the Customer, at a conference titled Trust in the Internet: Required Technology and Policy Solutions Conference. Location: Hilton Washington Dulles Airport, 13869 Park Center Road, Herndon, Virginian.
Location Change. 10:00 AM. The Senate Judiciary Committee's Subcommittee on Technology, Terrorism and Government Information will hold a hearing titled Challenges in Cybercrime: The National Infrastructure Protection Center. Sen. Jon Kyl (R-AZ) will preside. Location: Room 226 366, Dirksen Building.
10:00 AM. The House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property will hold a meeting to mark up HR 1866, a bill to clarify the basis for granting requests for reexamination of patents, and HR 1886, a bill to provide for appeals by third parties in certain patent reexamination proceedings. Location: Room 2141, Rayburn Building.
2:00 PM. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection will hold a hearing on Impediments to Digital Trade. Location: Room 2322, Rayburn Building.
2:00 PM. The House Judiciary Committee will hold a hearing HR 1698, the "American Broadband Competition Act of 2001," and HR 1697, the "Broadband Competition and Incentives Act of 2001." Location: Room 2141, Rayburn Building.
2:00 PM. The Senate Judiciary Committee might hold a hearing on competition in the pharmaceutical marketplace, focusing on the antitrust implications of patent settlements. Location: Room 226, Dirksen Building. This hearing has been noticed for both May 22 and 24.
People
5/17. Robert Mendelson returned to New York City office of the law firm of Morgan Lewis as a partner in the firm's Securities Interdisciplinary Initiative. His practice includes securities regulation, broker-dealer regulation and enforcement, derivatives product development and litigation, and online public offerings. He spent two years as SVP and Co General Counsel of Wit SoundView Group, an investment bank and online broker. See, release.
5/17. Laura Klaus joined the Washington DC office of the law firm of Greenberg Traurig as shareholder in the litigation group. Her practice includes appellate litigation, federal administrative, and regulatory law. Before entering private practice, she was a trial attorney in the Antitrust Division of the Department of Justice. In addition, Tab Turano joined the Washington DC office as an associate. He practices in the areas of administrative, regulatory and appellate litigation and trademark and patent cases. See, release.
5/15. Bart Greenberg joined the Orange County office of the law firm of Preston Gates & Ellis as a partner. He was previously with Riordan & McKinzie. His practice focuses on mergers and acquisitions and debt and equity financings, including in the information technology industry. He also handles licensing of software and other products and technologies, as well as the leasing of facilities for cellular and other communications purposes. See, release.
ProComp Criticizes Microsoft's .NET
5/17. The Project to Promote Competition & Innovation in the Digital Age (ProComp) released a paper [1.14 MB PDF file] titled "Microsoft's Expanding Monopolies: Casting a Wider .NET." The paper is subtitled "The Impact of .NET, HailStorm, Windows XP, Internet Explorer 6.0, MSN Messenger, Windows Media Player 8.0, MSN Explorer and MS Passport on the Future of the Internet." The paper argues that Microsoft has introduced "a series of business initiatives that put Microsoft in a position to extend its monopoly to the Internet itself." ProComp is a Washington DC based group that is devoted to the criticism of Microsoft, that is funded by competitors of Microsoft. See also, ProComp's summary of its paper, and Microsoft's .NET web section.
More News
5/18. BellSouth filed a request with the Kentucky Public Service Commission for permission to provide long distance service. See, BellSouth release.
5/18. The GAO released a report [PDF] titled "Information Technology: Architecture Needed to Guide Modernization of DOD's Financial Operations."
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