Tech Law Journal Daily E-Mail Alert
August 20, 2001, 9:00 AM ET, Alert No. 252.
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Ninth Circuit Rules on Cable Companies' Use of Private Easements
8/17. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Cable Arizona v. Coxcom, a case regarding the right of companies that provide cable TV (and broadband Internet access) to access private easements in order to connect to customers in apartment buildings. The Ninth Circuit joined several other circuits in finding no such right.
Facts. Cable Arizona (which is also known as CableAmerica) is one franchised cable TV service provider in Mesa, Arizona. CoxCom Inc. (a Cox Communications company) is another. Both provide cable TV and broadband Internet access. Feiga Partners, an owner of apartment buildings, granted CoxCom private easements to offer cable service to residents of its apartment buildings. CableAmerica (CA), which had previously contracted with Feiga, wanted continued access to the property owned by Fiega.
District Court. CA filed a complaint in Arizona state court against CoxCom, Fiega and others alleging that they violated the Communications Act of 1934, as amended, as well as other causes of action. CoxComm removed the case to the U.S. District Court (DAriz). Specifically, CA alleged violation of 47 U.S.C.§ 541(a)(2), which gives cable franchisees the right to construct a cable system "over public rights-of-way, and through easements, . . . which have been dedicated for compatible uses". The District Court held for Defendants.
Appeals Court. The Appeals Court affirmed. Judge Rymer, writing for a three judge panel, concluded that Section 541 "does not allow CableAmerica access to a private apartment complex through easements granted to other cable providers." The Court also noted that several other circuits have interpreted the statute in the same manner. See, TCI of North Dakota v. Schriock Holding Co., 11 F.3d 812 (8th Cir. 1993); Media General Cable of Fairfax v. Sequoyah Condominium Council, 991 F.2d 1169 (4th Cir. 1993); Cable Holdings of Georgia v. McNeil Real Estate Fund VI, 953 F.2d 600 (11th Cir.), cert. denied, 506 U.S. 862 (1992); and Cable Invs., Inc. v. Woolley, 867 F.2d 151 (3d Cir. 1989).
Appeals Court Denies Microsoft Motion for Stay
8/17. The U.S. Court of Appeals (DCCir) issued an order [PDF] denying Microsoft's August 7 motion for stay of mandate pending petition for writ of certiorari to the Supreme Court of the U.S.
The court wrote that "In order to obtain a stay of the mandate pending its petition for certiorari, Microsoft must show that the "petition would present a substantial question and that there is good cause for a stay." See Fed. R. App. P. 41(d)(2)(A); see also D.C. Cir. Rule 41(a)(2) (movant for stay of mandate must provide "facts showing good cause for the relief sought"). For the reasons stated in the appellees’ response to the motion for stay, it appears that Microsoft has misconstrued our opinion, particularly with respect to what would have been required to justify vacating the district court’s findings of fact and conclusions of law as a remedy for the violation of 28 U.S.C. § 455(a). We need not decide, however, whether Microsoft’s objections constitute a "substantial question" likely to lead to Supreme Court review, because Microsoft has failed to demonstrate any substantial harm that would result from the reactivation of proceedings in the district court during the limited pendency of the certiorari petition."
Federal Circuit Affirms in Verizon v. Covad
8/17. The U.S. Court of Appeals (FedCir) issued its opinion in Verizon v. Covad, a patent infringement case involving DSL technology. Verizon is the owner of U.S. Patent No. 5,812,786 titled "Variable rate and variable mode transmission system". Covad is a competitor that provides DSL service. Verizon filed a complaint in U.S. District Court (EDVa) against Covad and others alleging infringement of the '786 patent. The District Court determined that certain limitations required by claims 1 and 21 of the '786 patent are not present in Covad's DSL systems either literally or under the doctrine of equivalents, and granted Covad's motion for summary judgment of noninfringement. The Appeals Court affirmed.
Oracle Acquires Interactive Market Management System Patent
8/17. Oracle acquired Strategic Processing Corp. (SPC) and its U.S. Patent No. 4,799,156. The patent is titled "Interactive market management system". It discloses a "system for interactive on-line electronic communications and processing of business transactions between a plurality of different types of independent users including at least a plurality of sellers, and a plurality of buyers, as well as financial institutions, and freight service providers." The patent application was filed in 1986 by Eyal Shavit and Lester Teichner, and assigned to SPC. The patent was granted in 1989. Oracle, based in Redwood City, California, sells database management system software, and related software and consulting and support services. See, Oracle release.
New Documents
USCA: opinion re cable companies' access to private easements, 8/17 (PDF, USCA).
Bush: executive order re export controls, 8/17 (HTML, WH).
Bush: Executive Order extending the Export Administration Act, 8/17 (HTML, WH).
Geist: study of ICANN's UD, 8/20 (PDF, UOttawa).
Caspian: study of Internet traffic, 8/16 (PowerPoint, Caspian).
FCC: order granting extension under CALEA, 8/15 (PDF, FCC).
USCA: order denying Microsoft's motion for stay pending petition for writ of certiorari, 8/17 (PDF, USCA).
Study of Internet Traffic Shows Competition and Growth
8/15. Caspian Networks, an Internet infrastructure company, released a study [PowerPoint] of Internet traffic. It found a high level of competition, and a large number of competitors. It found that "19 companies make significant contributions to core traffic, yet the top 4 service providers carry 50% of the Internet’s traffic". This may be relevant to regulators who conduct antitrust merger reviews at the Department of Justice's Antitrust Division, at the Federal Trade Commission's Bureau of Competition, and at the Federal Communications Commission. The study concluded that "The large number of ISPs suggests high potential for consolidation within the industry". See also, CN release [HTML].
Caspian Networks (CN) stated that this is the first scientific study of network traffic since the NSF's 1996 study. It conducted confidential surveys of the 19 largest tier 1 ISPs in the U.S.
The study also found that despite the economic troubles of dot com companies, "the Internet is not shrinking, nor does it appear to be slowing yet in its growth". It asserts that the speculation by some analysts and journalists that the Internet traffic has shrunk are wrong. The study measured "The IP backbone carrying potential, as well as utilization, of the 19 largest tier 1 U.S. Internet service providers". It found that "Trunk ports grew from 800 Gbps in April, 2000 to 3 Tbps in April, 2001" and that "Utilization stayed the same, approximately 40%"
The study also examined what makes up this traffic. It found that very little traffic is accounted for by dot com companies. Rather, "Companies in the U.S. are beginning to realize they must move traffic to the Internet in order to stay competitive." It also found that "Personal broadband doesn’t significantly affect overall IP data rates at the core" and that "Personal traffic represents a small percentage of Internet traffic overall (approx. 20%)."
Law Prof Releases Study Criticizing Domain Name Dispute System
8/20. Michael Geist, a law professor at the University of Ottawa, released a study [PDF] titled " An Examination of the Allegations of Systemic Unfairness in the ICANN UDRP." The paper examines the first 3,000 plus cases decided under the Internet Corporation for Assigned Names and Numbers’ Uniform Domain Name Dispute Resolution Policy. Among the conclusions are that complainants usually win, three judge panels are less likely to rule for the complainant that one judge panels, forum shopping is common, assignment of judges is not random, and ICANN must reform the system.
Forum Shopping. Three bodies have been accredited to resolve domain name disputes. Geist found that forum shopping exists. He wrote that "The two ICANN- accredited providers with the most favorable outcomes for complainants (WIPO and the National Arbitration Forum (NAF)) quickly captured the lion’s share of the caseload at the expense of eResolution, the least complainant- friendly of the major ICANN- accredited providers. Furthermore, forum shopping has continued to increase over time."
Single v. Three Judge Panels. Geist found that "The data shows that when providers control who decides a case – which they do for all single panel cases -- complainants win just over 83 percent of the time. When provider influence over panelists diminishes – which occurs in three-member panel cases since in these cases both the complainant and respondent choose one of the panelists as well as exercise some influence over the choice of the third member of the panel -- the complainant winning percentage drops to 60 percent."
Geist concludes that "This study provides compelling evidence that forum shopping has become an integral part of the UDRP and that the system may indeed be biased in favor of trademark holders."
Vitech Files Chapter 11 Petition
8/17. Vitech America, Inc. filed a Chapter 11 petition for bankruptcy in U.S. Bankruptcy Court (SDFl). Vitech America is based in Miami, Florida. Through its Brazilian subsidiary, Microtec, it makes PC, servers, peripherals, networking products, software, and related items. Microtec did not file.
On March 9, 2001, Vitech filed a complaint in U.S. District Court (SDFl) against Gateway, Inc. alleging fraud, negligent misrepresentation and breach of contract. Gateway provided funding and operational support to Vitech.
Patent Offices Plan for XML Patent Applications
8/17. The U.S. Patent and Trademark Office (USPTO) announced that "The USPTO, the European Patent Office (EPO), the Japan Patent Office (JPO), and the World Intellectual Property Organization (WIPO), are jointly developing document- type definitions (DTDs) for use with the electronic filing of Patent Cooperation Treaty (PCT) applications. When finalized in 2001 December, these DTDs will enable applicants to create extensible- markup language (XML) international patent applications that can be processed by machine." See, WIPO's current draft of PCT DTDs and draft legal framework. See also, USPTO release.
Securities Fraud
8/14. The U.S. District Court (NDCal) appointed a receiver for The SEC filed a civil complaint on July 9, 2001, against and its founder and former CEO, Steven Ristau, alleging fraud by claiming that the company had a proprietary technology for broadcasting movies wirelessly over the Internet. See, SEC release.
Bush Extends Export Administration Act
8/17. President Bush issued an Executive Order extending the Export Administration Act (EAA). The EAA was scheduled to expire on August 20. President Bush wrote: "I ... find that the unrestricted access of foreign parties to U.S. goods and technology and the existence of certain boycott practices of foreign nations, in light of the expiration of the Export Administration Act of 1979, as amended ... constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and hereby declare a national emergency with respect to that threat." Congress is in the process of drafting and debating legislation to modernize and extend the export control regime; however, it has been delayed by opposition from Sen. Fred Thompson (R-TN) and others. President Bush's extension was expected.
The Senate bill, S 149, sponsored by Sen. Mike Enzi (R-WY), is a major overhaul of export control laws. It passed the Senate Banking Committee on March 22, 2001 by a vote of 19 to 1. It would ease restraints on the export of most dual use products, such as computers and software. However, it would raise penalties for violation of remaining prohibitions. It would also repeal provisions of the 1998 National Defense Authorization Act which require the President to use MTOPS to set restrictions on the export of high performance computers. However, this faces opposition in the Senate from Sen. Fred Thompson (R-TN), Sen. John Warner (R-VA), and Sen. Richard Shelby (R-AL). Sen. Majority Leader Tom Daschle (D-SD) announced just before the beginning of the August recess that as soon as the Senate returns after Labor Day it will hold several days of debate on S 149.
Similarly, on August 1, the House International Relations Committee approved HR 2581, also titled the "Export Administration Act of 2001", sponsored by Rep. Benjamin Gilman (R-NY), by a vote of 26 to 7.
FCC Grants CALEA Extension
8/15. The FCC released an order [PDF] that grants wireline carriers' petition for an extension under CALEA, Section 107(c). This proceeding is "In the Matter of The Communications Assistance For Law Enforcement Act (CALEA), Section 107(c) Extension of Capability Requirements", CC Docket No. 97-213.
Wireline telecommunications carriers filed petitions with the FCC seeking extensions of the deadline for complying with the capability requirements of Section 103 of the CALEA. The FCC ordered that "pursuant to sections 4(i) and 4(j) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i) and 154(j), and sections 107(c) of the Communications Assistance for Law Enforcement Act, 47 U.S.C. § 1006(c), the carriers listed in the Appendix attached to this Order are HEREBY GRANTED AN EXTENSION of the compliance date of the assistance capability requirements of section 103 of CALEA, 47 U.S.C. §1002(a)(1)-(4), until the dates agreed to by the FBI as set forth in each carrier's individual FBI support letter."
Tuesday, August 21
Deadline to submit comments to the FCC in response to its Notice of Proposed Rulemaking (NPRM) regarding the concept of a unified intercarrier compensation regime, including reciprocal compensation, and alternative approaches such as "bill and keep." See, notice in Federal Register, May 23, 2001, Vol. 66, No. 100, at Pages 28410 - 28418.
Bush Picks Stephens for Associate AG
8/17. President Bush announced his intent to nominate Jay Stephens to be Associate Attorney General at the U.S. Department of Justice. The Office of the Associate Attorney General oversees the key divisions and offices which administer civil laws, including the Antitrust Division, Civil Division, Tax Division, Civil Rights Division, and Environment and Natural Resources Division.
Stephens is currently a VP and Deputy General Counsel of Honeywell International. Honeywell is best known for its aerospace products. However, it also makes materials that are used in semiconductor manufacturing, electronic components, and high density multi-layer printed circuit boards. Prior to working for Honeywell, Stephens was a partner in the Washington DC office of the law firm of Pillsbury Madison and Sutro (now Pillsbury Winthrop). Prior to that he was U.S. Attorney for the District of Columbia (1988 - 1993) and Deputy Counsel to the President (1986 - 1988).
More People and Appointments
8/17. Phil Perry will continue as Acting Associate Attorney General pending confirmation of Jay Stephens by the Senate. See, White House release.
8/17. President Bush announced his intent to nominate Richard Clarida to be Assistant Secretary of the Treasury for Economic Policy. Clarida is currently Chairman of the Department of Economics at Columbia University, where he has been a professor since 1988. See, White House release and Clarida's Columbia bio.
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