Tech Law Journal Daily E-Mail Alert
July 23, 2001, 9:00 AM ET, Alert No. 232.
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Patent Infringement and State Sovereign Immunity
7/20. The U.S. Court of Appeals (FedCir) issued its opinion in State Contracting & Engineering v. Florida, a case involving the application of state sovereign immunity to patent infringement and related claims.
The plaintiffs hold two patents pertaining to highway sound barrier walls. Plaintiffs bid on, and received construction contracts from the State of Florida Department of Transportation (FDOT). Plaintiffs subsequently obtained patents on the technology included within their proposals. The FDOT included data from these proposals in subsequent requests for bids. Plaintiffs sought royalties. After unsuccessful negotiations, plaintiffs filed a complaint in U.S. District Court (SDFl) against Florida and seven private contracts. Plaintiffs alleged direct infringement by Florida, direct infringement by the private contractors, a Lanham Act violation by Florida, unconstitutional taking by Florida, and breach of contract by Florida. The District Court granting summary judgment to Defendants.
The Appeals Court affirmed the District Court's grant of summary judgment to Florida as to the patent infringement and Lanham Act claims on grounds of sovereign immunity. It also affirmed the grant of summary judgment to Florida as to the takings claim and the breach of contract claim. It vacated and remanded the District Court's grant of summary judgment to the private contractors on the patent infringement claims.
DOJ Forms Anti Hacking and IP Crimes Units
7/20. Attorney General John Ashcroft gave a speech in which he announced the formation of nine new units at the Department of Justice named Computer Hacking and Intellectual Property (CHIP) units. The new units will prosecute computer intrusions, copyright and trademark violations, theft of trade secrets and economic espionage, theft of computer and high tech components, fraud, and other Internet crimes. One such unit already exists for the San Francisco area. New units will be created for Los Angeles, San Diego, Atlanta, Boston, New York City, Dallas, Seattle and northern Virginia. The CHIP units will be staffed with a total of 77 people, of which 48 will be prosecutors.
AG Ashcroft stated that "These new teams will prosecute vigorously those responsible for cybercrime. As a result we hope to reinforce the message to would-be criminals that there are no free passes in cyberspace. Crimes will be investigated and criminals will be prosecuted to the fullest extent of the law."
Evans Wants More Time to Develop New 3G Plan
7/19. Commerce Secretary Donald Evans sent a letter to FCC Chairman Michael Powell regarding plans to "identify additional spectrum for third generation (3G) advanced mobile wireless services." He stated that this will be done "with additional time". While the Clinton administration had developed a plan, and set a timetable for identifying and allocating spectrum for 3G wireless systems, Evans stated that "I have directed the Acting Administrator of the National Telecommunications and Information Administration to work with the FCC to develop a new plan for the selection of 3G spectrum."
CTIA P/CEO Tom Wheeler had this reaction: "Today's letter is good news for the wireless industry. It confirms that the highest levels of government, from both the commercial and military perspectives, are searching for a “win-win” solution on spectrum allocation for the next generation of wireless services. The letter also calls for both speed and flexibility in finding that solution - two characteristics that will be necessary as we strive in the weeks ahead for a solution that preserves national security and enhances our economy. ..." See, release.
Export Control Bills
7/19. Rep. David Dreier (R-CA), Amo Houghton (R-NY) and Jeff Flake (R-AZ) introduced HR 2568, the Export Administration Act of 2001. It is identical to S 149 as reported by the Senate Banking Committee on March 22, 2001. The bill would ease restraints on the export of most dual use products, such as computers and software. The bill was referred to the Committee on International Relations. See, Dreier release.
7/18. Rep. Robert Menendez (D-NJ), Rep. Amo Houghton (R-NY), Jeff Flake (R-AZ), and Earl Blumenauer (D-OR) introduced HR 2557, the Export Administration Act of 2001.
7/20. Rep. Benjamin Gilman (R-NY) introduced HR 2581, a bill to provide authority to control exports.
New Documents
USCA: opinion in Southco v. Kanbridge re the originality requirement for copyright protection, 7/20 (HTML, USCA).
Ashcroft: speech re formation of cybercrime units at DOJ, 7/20 (HTML, DOJ).
Boucher: HR 2526, the Internet Tax Fairness Act, 7/17 (HTML, LibCong).
Stearns: HR 2536, the Broadcast Ownership for the 21st Century Act, 7/17 (HTML, LibCong).
Hollings: S 1189, a bill to require the FCC to amend its newspaper cross ownership rules, 7/17 (HTML, LibCong).
LaFalce: HR 2579, the Internet Gambling Payments Prohibition Act, 7/20 (HTML, LibCong).
Menendez: HR 2557, the Export Administration Act of 2001, 7/18 (HTML, LibCong).
The Originality Requirement of Copyright
7/20. The U.S. Court of Appeals (3rdCir) issued its opinion in Southco v. Kanbridge, a case regarding the originality requirement for copyright protection.
Facts. Southco manufactures captive screw fasteners, devices used in assembling the panels of computers and telecommunications equipment. Southco developed a numbering system to serve as a shorthand description of the relevant characteristics of each fastener to assist its employees and customers in identifying and distinguishing among its products. This nine digit numbering system has become an industry standard. Kanebridge is a distributor of competing fasteners. It began using Southco's part numbers in comparison charts that were included in advertisements and other literature that it provides to customers.
District Court. Southco filed a complaint in U.S. District Court (EDPenn) against Kanbridge alleging patent infringement. The District Court granted Southco a preliminary injunction. This appeal followed.
Appeals Court. Kanbridge argued several issues on appeal (including lack of originality, the scenes a faire doctrine, the merger doctrine, and fair use). However, the Appeals Court reversed pursuant to the lack of originality, and therefore did not address the other issues. The Court applied Section 102 of the Copyright Act (which provides copyright protection for "original works of authorship") and the 1991 opinion of the Supreme Court in Feist Publications v. Rural Tel. Serv., 499 U.S. 340 (which held that the originality requirement means that a work must have been "independently created by the author" and must possess "at least some minimal degree of creativity."). The Appeals Court held that there was no originality here. It wrote: "there is simply no room for creativity when assigning a number to a new panel fastener. The part has certain relevant characteristics, and the numbering system specifies certain numbers for each of those characteristics. As a result, there is only one possible part number for any new panel fastener that Southco creates. This number results from the mechanical application of the system, not creative thought."
FCC Approves Verizon 271 Application in Connecticut
7/20. The FCC approve Verizon's Section 271 application to provide in region interLATA service in Connecticut. Verizon serves only two communities in Connecticut with a total of 60,000 lines. See, FCC release. Verizon has a 271 application pending with the FCC for Pennsylvania, and plans to file applications later this year for the states of New Hampshire, New Jersey, Rhode Island, and Vermont. See, Verizon release.
Sprint General Counsel Richard Devlin had this reaction: "Sprint is disappointed that the FCC did not use this Section 271 application to signal a get-tough approach to Verizon and other Bell companies that have not truly opened up their local markets to competition. Verizon's Connecticut customers, like its New York customers, will experience very limited local competition - and not benefit from the promise of full local competition under the Telecom Act." See, release.
House Committee Examines Violent Video Games
7/20. The House Commerce Committee's Subcommittee on Telecommunications and the Internet held a hearing on the software, movie and music industries' efforts to curb children's exposure to violent content.
Rep. Billy Tauzin (R-LA), Chairman of the full committee, said in his prepared statement that "there is legislation currently before the Energy and Commerce Committee that would enable the government to enforce policies against marketing and selling this material to minors, and we need to think about it very carefully."
Douglas Lowenstein of the Interactive Digital Software Association (IDSA) addressed games. He argued in his prepared testimony that a majority of game players are adults, and that since games are costly, children need parental consent to obtain them. He also testified that "we do live in a world where media is incredibly complex, where the Internet spans the globe, where consumers, young and old, have access to information in ways never before imagined. In this environment, it is simply not possible or realistic to create an airtight system where young people do not hear about, or even obtain, games that are not appropriate for them."
Lee Peeler of the FTC said in his prepared testimony that "Seventy percent of the 118 electronic games with a Mature rating for violence the Commission examined targeted children under 17."
See also, prepared statements of other witnesses: Jack Valenti (Motion Picture Association of America), Hilary Rosen (Recording Industry Association of America), Doug McMillon (Wal-Mart Stores), and Daphne White (The Lion & Lamb Project).
More News
7/20. The U.S. Court of Appeals (FedCir) issued its opinion in Dayco v. Total Containment, a patent infringement case. The case involved claims of infringement of several patents pertaining to cylindrical hoses. The District Court granted summary judgment of non-infringement. The Appeals Court affirmed as to one patent, and vacated and remanded as to the others.
7/20. Microsoft filed its opposition [PDF] to the DOJ's July 13 motion [PDF] for immediate issuance of mandate in the Microsoft antitrust case. Microsoft would like the Appeals Court to address its July 18 Petition for Rehearing [PDF] before returning the case to the District Court. It stated that the petition "raises a substantial question and thus merits the attention of the Court. The mandate plainly should not issue while the Court is still considering Microsoft’s petition and plaintiffs’ response."
People and Appointments
7/23. Philip Beck joined the Antitrust Division of the Department of Justice. He will take over as lead trial counsel in the Microsoft antitrust case. He was previously a partner in the Chicago office of the law firm of Bartlit Beck. The DOJ release announcing his appointment also referenced the DOJ's "successful prosecution of the case to this point."
7/20. The Senate confirmed Ralph Boyd to be Assistant Attorney General for the Civil Rights Division and Eileen O'Connor to be Assistant Attorney General for the Tax Division.
7/16. Patricia Paoletta joined the Washington DC office of the law firm of Wiley Rein & Fielding as a partner in its Communications practice. She will head the International Telecommunications Group. She was previously VP of Government Relations at Level 3 Communications. Prior to that she worked for the House Commerce Committee. Before that she worked as Director of Telecommunications Trade Policy at the Office of the U.S. Trade Representative. And before that, she worked in the Office of International Communications at the FCC. See, WRF release.
7/17. Roy Bartlett joined the San Francisco office of the law firm of Covington & Burling as Of Counsel. He previously was a partner in the law firm of White & Case. He will focus on complex business litigation matters, with an emphasis on intellectual property concerns. See, C&B release [PDF].
7/23. John Elwood joined the Criminal Division of the Department of Justice as Counselor to the Assistant Attorney General Michael Chertoff. He previously was a partner in the Washington DC office of the law firm of Baker Botts. See, BB release and bio.
Monday, July 23.
1:00 PM. The Senate Commerce Committee's Science, Technology, and Space Subcommittee will hold a hearing to examine the use of technology in the health care system, focusing on opportunities and obstacles regarding the use of Internet technology to empower patients to improve their health care. The witnesses will be Tom Scully (Centers for Medicare and Medicaid Services), Sherrilynne Fuller (University of
Washington School of Medicine), John Kenagy (Harvard Business School), Willie May (NIST), Albert Patterson (Premier). See, release. Location: Room 253, Russell Building.
Tuesday, July 24
8:30 AM - 3:30 PM. The Consumer Electronics Association will hold a conference titled "The DTV Transition: Is Laissez Faire Fair?" The keynote speaker will be Sen. Conrad Burns (R-MT); he will speak at 8:35 AM. The price is $199 in advance, and $299 at the door. Location: Ronald Reagan Building and International Trade Center, Polaris Room, 1300 Pennsylvania Ave., NW, Washington DC. See, full schedule and online registration page.
9:30 AM. The House Commerce Committee's Telecommunications and Internet Subcommittee will hold a hearing titled "U.S. Deployment of Third Generation Wireless Services: When Will It Happen and Where Will It Happen?" Location: Room 2123, Rayburn Building.
10:00 AM. The House Financial Services Committee's  Financial Institutions Subcommittee will hold a hearing on HR 556, the Unlawful Internet Gambling Funding Prohibition Act, and other Internet gambling proposals. Location: Room 2128, Rayburn Building.
RESCHEDULED TO JULY 31. 10:00 AM. The House Commerce Committee's Subcommittee on Oversight and Investigations will hold a hearing for titled "How Secure is Sensitive Commerce Department Data and Operations? A Review of the Department's Computer Security Policies and Practices." Location: Room 2322, Rayburn Building.
10:00 AM. The House Judiciary Committee will hold a meeting to mark up eight bills, including HR 2047, the Patent and Trademark Office Authorization Act of 2002. Location: Room, 2141 Rayburn Building.
10:00 AM. The Cato Institute will host a panel discussion titled "Broadband and the Markets: Perspectives from the Investment Community." The speakers will be Doug Ashton (Bear Stearns), Blake Bath (Lehman Brothers), Scott Cleland (Precursor Group), and Erik Olbeter (Schwab Capital Markets). Location: Cato Institute, 1000 Massachusetts Avenue, NW, Washington DC.
10:00 AM. The Senate Banking Committee will hold a hearing on monetary policy at which Federal Reserve Chairman Alan Greenspan will testify. The Committee will also hold a business meeting to consider the nomination of Harvey Pitt, to be a Chairman of the SEC. Location: Room 216, Hart Building.
Internet Gambling Bills
7/20. Rep. John LaFalce (D-NY) introduced HR 2579, the Internet Gambling Payments Prohibition Act. On Tuesday, July 24, the House Financial Services Committee's Financial Institutions Subcommittee will hold a hearing on Internet gambling proposals.
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