Tech Law Journal Daily E-Mail Alert
June 8, 2001, 8:00 AM ET, Alert No. 204.
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Largent Announces Resignation
6/7. Rep. Steve Largent (R-OK) announced his intent to resign from the House, effective November 29, in order to run for Governor of Oklahoma. See, release. Largent is a member of the House Commerce Committee, and its Telecom Subcommittee, which have jurisdiction over much of the legislation affecting the Internet and communications. He has been one of the Committee's most ardent advocates of free market solutions, limited government, and deregulation. He has also been a proponent of legislation to protect children from inappropriate content on the Internet. He is also one of the leaders of the opposition to HR 1542, the Tauzin Dingell bill.
Antitrust News
6/6. The Antitrust Division of the U.S. Department of Justice filed a civil antitrust action in U.S. District Court (DDC) against 3D Systems Corporation and DTM Corporation seeking to block 3D System's proposed $45 Million acquisition of DTM. The DOJ alleged that the transaction would result in higher prices and less innovation for industrial rapid prototyping systems. Rapid prototyping (RP) is a process by which a machine transforms a computer design into three dimensional objects. See, DOJ release. Brian Service, P/CEO of 3D Systems stated that "We believe the government's case is without merit, and we intend to vigorously defend the legality of the transaction." John Murchison, P/CEO of DTM likewise condemned the suit. See, 3D Systems release.
6/7. The U.S. Court of Appeals (9thCir) issued its opinion in Tanaka v. USC, an antitrust suit. Rhiannon Tanaka, a soccer playing college student, sought to transfer from the University of Southern California to UCLA, both of which are members of the PAC 10 intercollegiate athletic conference. USC opposed Tanaka's transfer to UCLA, and sought sanctions (one year loss of eligibility and financial aid) against her pursuant to a PAC 10's intra conference transfer rule. Tanaka filed a complaint in the U.S. District Court (CDCal) against USC alleging breach of contract under state law and violation of the Clayton Act, 15 U.S.C. 15, predicated on a violation of Section 1 of the Sherman Act, 15 U.S.C. 1. The District Court dismissed the antitrust claim on the basis that USC's action was basically noncommercial, and declined to exercise supplemental jurisdiction over the state claim. The Appeals Court affirmed on other grounds. Tanaka had alleged that the relevant market was Los Angeles. The Appeals Court reasoned that the market was national, and a PAC 10 rule could not have a significant anticompetitive effect nationally.
Subcommittee Holds Hearing on Imported Pharmaceuticals
6/7. The House Commerce Committee's Subcommittee on Oversight and Investigations held a hearing on imported pharmaceuticals, including those sold via the Internet and delivered by mail. See, opening statements of Rep. Billy Tauzin (R-LA), Rep. John Dingell (D-MI), and Rep. James Greenwood (R-PA). See also, prepared testimony of witnesses: Rev. and Mrs. Edwin Rode, Donald Vereen (Office of National Drug Control Policy), Laura Nagel (DEA), Elizabeth Durant (U.S. Customs Service), William Hubbard (FDA), Alan Leshner (National Institute on Drug Abuse), Landon Gibbs (Virginia State Police), Marven Shepherd (University of Texas), John Glover (Bristol- Myers Squibb), James Christian (Novartis), William Trundley (Glaxo Smith Kline), Gene R. Haislip, and Donald deKieffer (deKieffer & Horgan).
New Documents
AT&T: complaint for patent infringement against Microsoft, 6/4 (HTML, TLJ).
USCAopinion in Tanaka v. USC re antitrust, 6/7 (PDF, USCA).
USCA: opinion in Learning Network v. Discovery Communications re first to file rule in trademark litigation, 6/7 (HTML, USCA).
Subcommittee Holds Hearing on USPTO
6/7. The House Judiciary Committee's Subcommittee on Courts, Internet and Intellectual Property held an oversight hearing titled The Operations of the U.S. Patent and Trademark Office, Including Review of Agency Funding. The Subcommittee Chairman, Rep. Howard Coble (R-NC), presided. The ranking Democrat, Rep. Howard Berman (D-CA), also participated. No other members were present. See, opening statements of Coble and Berman. See also, prepared testimony of witnesses: Nicholas Godici (USPTO), Ronald Myrick (Intellectual Property Owners), Nils Montan (International Trademark Association), and Ronald Stern (Patent Office Professional Association).
Diversion of USPTO User Fees. Rep. Coble stated that "It pains me that the focus of our hearing, as it has been in the past, will be the continuing diversion of PTO funds from the agency to other government programs. More specifically, by the end of the present fiscal year, the agency will have lost more than $600 million dollars attributable to diversions, rescissions, and other budgetary sleights of hand." Rep. Berman concurred: "This Innovation Tax is leaving the PTO unable and unequipped to perform its very critical mission."
Legal Challenge to Diversion. Rep. Coble asked Myrick whether the IPO planned to file a court challenge to the diversion of USPTO user fees. Myrick responded that the IPO is studying the issue, and will issue a report in two weeks, but has made no determination. He added that if a legal challenge were filed, it would allege a violation of the Fifth Amendment Takings Clause and the ban on direct taxation. Rep. Berman stated that "I am with you on policy, but I am not sure I am with you on the Constitutional issue." He asked rhetorically whether the IPO's lawyers were the same ones who argue that minimum wage laws violate freedom of contract.
Coble and Berman Introduce HR 2047
6/7. Rep. Howard Coble and Rep. Howard Berman introduced HR 2047 on June 6. They discussed the bill at the June 7 oversight hearing on the USPTO. The bill contains three provisions. First, it seeks to end the diversion of USPTO fees to subsidize other government programs. It states that "There is authorized to be appropriated to the (USPTO) for salaries and necessary expenses for fiscal year 2002 an amount equal to the fees collected in fiscal year 2002 ..."
On April 3, Rep. Berman and Rep. Rick Boucher (D-VA) introduced HRes 110, a resolution providing "That it shall not be in order in the House of Representatives to consider any bill, joint resolution, amendment, motion or conference report that makes available funds to the (USPTO) for any fiscal year ... in amounts less than the total amount of patent and trademark fees collected by the (USPTO) ... " Rep. Berman stated at the June 7 hearing that "I believe that HR 2047 and HRes 110 are symbiotic, and I will pursue House passage of both."
HR 2047 would also require the USPTO to develop a strategic plan that sets forth goals and methods regarding enhancing patent and trademark quality, reducing patent and trademark pendancy, and developing computer systems. Rep. Berman explained that the USPTO "needs to clearly and specifically outline how it would use all the fee revenue to be diverted." Finally, HR 2047 would authorize $50 Million per year for 2002 and 2003 to develop an electronic system for the filing and processing of patent and trademark applications.
First to File Rule in Trademark Litigation
6/7. The U.S. Court of Appeals (4thCir) issued its opinion in Learning Network v. Discovery Communications, a trademark dispute. Learning Network filed a complaint against Discovery in the U.S. District Court for the District of Maryland (DMd). Discovery filed a complaint against Network in the U.S. District Court for the Southern District of New York (SDNY). The District Court (DMd) issued an order enjoining Discovery from proceeding with its suit against Network in the District Court (SDNY), pursuant to the first to file rule. The Appeals Court affirmed in an "unpublished" opinion.
Napster News
6/7. Napster announced that it entered into an agreement with Loudeye under which Loudeye will provide digital "fingerprints" and associated descriptive data to identify songs. See, Napster release. Loudeye stated that this "will support Napster's compliance efforts to filter noticed copyrighted content from its current service." See, Loudeye release.
Esbin Returns to FCC Cable Services Bureau
6/7. Barbara Esbin was named Associate Chief of the FCC's Cable Services Bureau, effective July 15, 2001. She is currently a partner in the Washington DC office of the law firm of Dow Lohnes. Until recently, she worked at the FCC. The FCC stated that she will handle "regulatory issues arising from cable provision of Internet and other advanced information services, cable entry into telecommunications markets, interconnection, local franchising, federal- state relations, and related regulatory issues affecting cable operators." See, FCC release. Esbin is best known for having authored the FCC's September 1998 report [PDF] titled Internet Over Cable: Defining the Future in Terms of the Past. See, TLJ News Analysis regarding this report.
Friday, June 8
2:00 PM. The Center for Strategic and International Studies, a Washington DC think tank, will hold a press conference to release a report titled "Computer Exports and National Security in a Global Era: New Tools for a New Century." The participants will include John Hamre (P/CEO of CSIS), and Brent Scowcroft (Former National Security Adviser). See, notice. Location: Room 430, Dirksen Building.
Deadline to submit comments to the NTIA regarding its 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 CJSJ appropriations bill for FY 2002 requires that the NTIA conduct this study. See, notice in Federal Register, April 9, 2001, Vol. 66, No. 68, at Pages 18448 - 18449. See also, copy of notice in NTIA web site.
Monday, June 11
10:30 AM - 12:00 NOON. The FCC's Office of Engineering and Technology will provide a tutorial on the use of graphical models (GMs) for speech recognition. GMs are flexible statistical abstractions that offer promising new approaches to automatic speech recognition. See, FCC notice. Location: FCC, 445 12th St. S.W., Room TW-C305, Washington DC.
2:30 - 4:00 PM. The Progressive Policy Institute (PPI) will host a panel discussion titled Do We Need a National E-Commerce Strategy? RSVP to Rick Coduri of the PPI at 202-608-1245 or rcoduri@dlcppi.org. Location: Room 121, Cannon House Office Building, Washington DC. The speakers will be:
  Rob Atkinson (PPI's Technology and New Economy Project).
  Mark Cooper (Consumer Federation of America).
  Jeff Eisenach (Progress and Freedom Foundation).
SBC Withdraws Missouri 271 Application
6/6. SBC Communications withdrew its Section 271 application to provide long distance service in the state of Missouri. See, SBC release. The FCC Chairman Michael Powell released a statement in which he said, "During the FCC Common Carrier Bureau's review of SBC's Section 271 application for authority to offer long distance service in Missouri, concerns surfaced related to cost-based pricing in its region and operations support systems (OSS). Given these concerns, SBC has chosen to withdraw the application. Accordingly, this Section 271 proceeding is now terminated until such time as SBC has addressed these issues and is prepared to resubmit its application."
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