|House Holds Hearing on
|7/26. The House
Commerce Committee's Subcommittee on Commerce, Trade, and
Consumer Protection held a hearing titled "How Do
Businesses Use Customer Information: Is the Customer's Privacy
Protected?" This was the sixth and last in a series of
hearings held by the Subcommittee. Rep. Cliff Stearns
(R-FL), Chairman of the Subcommittee, stated that "there
are substantial benefits that accrue to our economy from the
unencumbered flow of information, particularly consumer
information." See, opening
Paul Misener of Amazon.com
said in his prepared
testimony that "there is no inherent need for
legislation. We firmly oppose the adoption of any non-federal
privacy law that addresses online activities. Nonetheless,
Amazon.com could support limited federal legislation, but only
if it preempts state laws, only if it bars private rights of
action, and only if it applies to offline as well as online
Harriet Pearson of IBM said
in her prepared
testimony that "any U.S. privacy regime should be a
national solution, not a patchwork of fifty conflicting
regimes. The regime should encourage transparency and choice.
It should hold government and non-profit organizations
accountable to similar standards asked of industry. It should
neither discriminate against the Internet nor create new
private rights of action."
See, prepared statements of witnesses: Harriet
Pearson (IBM), Jacqueline
Hourigan (General Motors), Zeke
Swift (Proctor & Gamble), Paul
Misener (Amazon.com), David
Johnson, (Landís End), Jennifer
Barrett (Acxiom), Deborah
Zuccarini (Experian), and John
Rep. Billy Tauzin
(R-LA), the Chairman of the full Committee, said in his prepared
statement that "Going forward, one thing should be
clear: I donít see a need to legislate on false scenarios.
We cannot and will not design some elaborate new privacy
regime that will take into account every possible daydream of
how information could be used. Reality must be taken into
|Free Trade Agreement
Advances In Congress
|7/26. The Senate
Finance Committee held a business meeting at which it
approved S 643, a bill to implement the agreement establishing
a U.S. Jordan free trade area. Also, the House Ways and Means
Committee held a meeting at which it approved HR 2603, the
U.S. Jordan Free Trade Area Implementation Act of 2001. Trade
between the U.S. and Jordan is not significant. However, this
trade agreement is significant because it may serve as a
standard for future trade agreements.
It includes labor and environmental (L&E)
conditions. The FTA provides that neither party "shall
fail to effectively enforce its" L&E laws. These
provisions are controversial, and are at the heart of the
current debate over extending fast track trade
negotiating authority to the President.
The U.S. Jordan FTA also addresses enforcement of intellectual
property rights and electronic commerce. Jordan
agreed to ratify and implement the WIPO's
Copyright Treaty and WIPO Performances and Phonograms Treaty
within two years. The FTA also provides that "each Party
shall seek to refrain from: (a) deviating from its existing
practice of not imposing customs duties on electronic
transmissions; (b) imposing unnecessary barriers on electronic
transmissions, including digitized products; and (c) impeding
the supply through electronic means of services ..." See
also, the U.S.
Jordan Free Trade Agreement (FTA) [PDF], signed on October
|Export Administration Act
|7/26. The Senate
Banking Committee held a hearing on the nomination of Michael
Garcia to be Assistant Secretary for Export Enforcement at
the Department of Commerce. Garcia is an Assistant U.S.
Attorney for the Southern District of New York, where he was
involved in the prosecutions stemming from the World Trade
Center bombing and the bombings of U.S. embassies in East
Africa. Sen. Paul
Sarbanes (D-MD), Chairman of the Committee, praised
Garcia. Garcia stated that "I will work hard to ensure
that any violations of U.S. dual use exports are detected,
investigated and sanctioned."
Sen. Sarbanes said that he wanted the Committee to approve his
nomination early next week, and the full Senate to approve it
before it goes on its August recess.
Sen. Sarbanes also used the hearing to advocate passage of S
149, the Export Administration Act, a bill which
would ease restraints on the export of most dual use products,
such as computers and software. However, the bill would also
raise penalties for certain violations. The Senate Banking
Committee approved the bill on March 22 by a vote of 19 to 1.
The current act expires on August 20. Sen. Sarbanes noted that
Senate Majority Leader Tom
Daschle (D-SD) favors consideration of the bill in the
Senate before the August recess.
|4th Circuit Rules
Jurisdiction May be Based Upon Location of Web Site
|7/26. The U.S.
Court of Appeals (4thCir) issued its opinion
Science Board of Directors v. Nolan, holding
that personal jurisdiction may be based upon maintaining a web
site in the territory of a federal district court where the
suit is brought.
The Christian Science Board of Directors filed a complaint in
U.S. District Court for the Western District of North Carolina
against David Nolan and others alleging trademark infringement
under the Lanham Act. Nolan was a resident of California.
However, Nolan maintained a web site in North Carolina, the
content of which was the subject of the law suit. Nolan
contracted with a co-defendant in North Carolina to operate
the web site for him. Nolan periodically sent content to North
Carolina to be added to the web site.
Plaintiff obtained a default judgment against Nolan enjoining
him from using the contested marks. He violated this
injunction. When he was ordered to appear in response to a
civil contempt notice he asserted that the default judgment
was void for lack of personal jurisdiction. The District Court
rejected this argument. This appeal followed.
The Appeals Court affirmed. It reasoned that the exercise of
jurisdiction over Nolan by the District Court in North
Carolina was consistent with the North Carolina long arm
jurisdiction statute, and did not violate the due process
requirement of "minimum contacts" set forth in International
Shoe v. Washington, 326 U.S. 310 (1945) and elaborated in Burger King v.
Rudzewicz, 471 U.S. 462 (1985).
|Trade Secret Definition in
EEA Not Unconstitutionally Vague
|7/26. The U.S.
Court of Appeals (6thCir) issued its opinion
v. David Krumrei, holding that the definition
of trade secret contained in the Economic Espionage Act (EEA)
is not unconstitutionally vague. Krumrei was indicted on one
count of violating the EEA, 18 U.S.C. ß 1832(a)(2), by
knowingly and without authorization transmitting a trade
secret to a competitor of the owner. He asserted that the EEA
is unconstitutionally vague. The District Court disagreed. The
Appeals Court affirmed.
|EPIC Complains to FTC About
|7/26. The Electronic Privacy
Information Center (EPIC), and 12 other interest groups,
filed a complaint
[PDF] with the Federal Trade
Commission (FTC) against Microsoft alleging that the soon
to be released Windows XP operating system will adversely
affect the privacy of users, and violate the Federal Trade
Commission Act ban on unfair and deceptive trade practices.
The complaint states that "Microsoft has engaged, and is
engaging, in unfair and deceptive trade practices intended to
profile, track, and monitor millions of Internet users.
Central to the scheme is a system of services, known
collectively as ".NET," which incorporate
"Passport," "Wallet," and "HailStorm"
that are designed to obtain personal information from
consumers in the United States unfairly and deceptively."
The complainants want the FTC to investigate Microsoft, and
then order Microsoft to "revise the XP registration
procedures so that purchasers of Microsoft XP are clearly
informed that they need not register for Passport to obtain
access to the Internet; ... block the sharing of personal
information among Microsoft areas provided by a user under the
Passport registration procedures absent explicit consent; ...
[and] incorporate techniques for anonymity and pseudo-
anonymity that would allow users of Windows XP to gain access
to Microsoft web sites without disclosing their actual
Finally, the complainants ask the FTC to remedy an implied
antitrust violation that was not articulated in the complaint.
They want the FTC to require Microsoft to "incorporate
techniques that would enable users of Windows XP to easily
integrate services provided by non-Microsoft companies for
online payment, electronic commerce, and other Internet- based
|DOJ Cannot Support
Verizon's Pennsylvania 271 Application
|7/26. The Department of
Justice (DOJ) released its competitive
analysis of Verizon's
application to provide in region interLATA services in
Pennsylvania under Section
271 of the Telecom Act of 1996. The DOJ did not endorse
the application because of problems with Verizon's electronic
billing. See also, DOJ
The report concluded that competitive local exchange carriers
(CLECs) "have made significant inroads into the local
markets in Pennsylvania. Electronic billing, however, may be
an important factor with respect to whether entry will
continue in the foreseeable future. Because of the timing of
this application, Verizon has not been able to demonstrate
that its billing system modifications have fully resolved its
billing problems in actual commercial operations. Absent such
evidence, the Department cannot support Verizon's application
at this time. The Department notes, however, that the
Commission may have additional information during its
consideration of Verizon's application. The Commission may
therefore be able to assure itself that Verizon's billing
problems have been resolved and may be in a position to
approve Verizon's application by the close of these
John Thorne, Verizon SVP and Deputy General Counsel, had this
reaction: "We are pleased the Justice Department
recognizes that with more than one million local lines already
controlled by competitors, there is strong evidence of
broad-based competition in Pennsylvania. Todayís DOJ
evaluation, combined with the Pennsylvania Public Utility
Commissionís report supporting our long-distance bid, means
that our application is on track for FCC approval."
|7/26. The Senate
Banking Committee held a hearing on the nomination of Henrietta
Fore to be Director of the Mint. She testified that
"Our currency must be smart, with an electromagnetic
signature ..." She did not elaborate, and none of the
Senators present questioned her on this topic. Sen. Sarbanes
said he will seek her confirmation by the full Senate before
the August recess.
|Friday, July 27
|8:30 AM. Daniel
Griswold and Daniel Ikenson,
both of the Cato Institute,
will speak on "Threats to Trade Promotion Authority:
Antidumping Laws and Labor and Environmental Sanctions."
Location: Room B-339, Rayburn Building.
|Monday, July 30
|1:00 PM. The Senate
Judiciary Committee will hold a hearing on the nomination
of Robert Mueller to be Director of the Federal Bureau
of Investigation. Sen.
Patrick Leahy (D-VT) will preside. Location: Room 216,
1:00 PM. Opening statements in the Copyright Office's
(CO) arbitration proceeding regarding webcasting of digital
sound recordings. The CO has scheduled a "180-day
arbitration period to set the rates and terms for two
compulsory licenses. One license allows certain eligible
nonsubscription services to perform sound recordings publicly
by means of digital audio transmissions and the other allows a
transmitting organization to make an ephemeral recording of a
sound recording for the purpose of making a permitted public
performance." Presentation of direct cases is scheduled
for July 31 through September 13. See, notice
published in Federal Register, July 23, 2001, Vol. 66, No.
141, at Pages 38324 - 38326.
1:30 PM. The President's Advisory Committee on Trade Policy
and Negotiations will hold a meeting on 1:30 to 4:30 PM. The
meeting will be closed to the public from 1:30 to 4:00 PM, and
open to the public from 4:00 to 4:30 PM. See, notice
in Federal Register. For more information, contact Heather
Wingate (Office of the USTR) at 202-395-6120. Location: USTR
ANNEX Building in Conference Rooms 1 and 2, located at 1724 F
Street, NW, Washington DC.
|People and Appointments
|7/26. Lynn Turner, who has been Chief Accountant of
the SEC since July
1998, will leave the SEC in August, and return to Colorado
State University. See, SEC release.
7/26. The Senate
Judiciary Committee approved the nomination of James
Ziglar to be head of the Immigration and Naturalization
Service (INS) by a vote of 19-0.
7/26. Joel Taubenblatt will become Legal Advisor to Tom
Sugrue, Bureau Chief of the FCC's Wireless Telecommunications
Bureau. Taubenblatt was previously a Senior Staff Attorney
in the Commercial Wireless Division of the Bureau. He joined
the FCC in July 1996.
7/26. Catherine Seidel will join the FCC's Wireless
Telecommunications Bureau as Associate Bureau Chief and Chief
of Staff. She was previously Chief of the Telecommunications
Consumers Division of the FCCís Enforcement Bureau. Before
that she served as Chief of the Wireless Bureauís
Enforcement and Consumer Information Division. Before joining
the FCC in 1994, she worked for Verizon.
7/26. Kelly Quinn will join the FCC's Wireless
Telecommunications Bureau's Auctions and Industry Analysis
Division as Deputy Chief. She was previously a Legal Advisor
in the Office of the Bureau Chief. Before that she was an
associate at the law office of Squire
Sanders & Dempsey.
|7/26. The Department of Justice filed its opposition
to Microsoft's petition for rehearing in the antitrust case.
7/26. The GAO
released its report [PDF]
titled "Critical Infrastructure Protection: Significant
Challenges in Developing Analysis, Warning, and Response
Capabilities." The GAO presented this as testimony to the
Senate Judiciary Committee's Subcommittee on Technology,
Terrorism and Government Information.
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