Tech Law Journal Daily E-Mail Alert
August 21, 2001, 9:00 AM ET, Alert No. 253.
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Computer Crime
8/16. A grand jury of the U.S. District Court (EDCal) returned a 13 count indictment against Aleksey Ivanov alleging unauthorized intrusions into computer systems owned by companies in the U.S., transmitting threats to damage those computer systems, extortion, and other charges. Ivanov is a computer hacker from Chelybinsk, Russia, who was arrested in Seattle on November 10, 2000 by the FBI while traveling to met with an undercover company established by the FBI. Ivanov also faces similar computer intrusion charges in Seattle, Connecticut, California and New Jersey.
The indictment alleges that Ivanov gained unauthorized access to computers at VPM, a Folsom, California Internet services company. He then installed a backdoor, and used VPM as a shell or conduit for hacking attacks on other companies to avoid detection or exposure to his computer systems in Russia. The indictment further alleges that Ivanov contacted the victims whose computers he had accessed and compromised, for the purpose of demanding and extorting money. He also threatened further damage to their computer systems. See, CCIPS release.
8/20. Geoffrey Osowski and Wilson Tang each pled guilty in U.S. District Court (NDCal) to one count of computer fraud in violation of 18 U.S.C. 1030(a)(4). The two exceeded their authorized access to the computer systems of Cisco Systems in order to illegally issue almost $8 million in Cisco stock to themselves. They also agreed to the forfeiture of assets already seized by the government, and agreed to pay restitution in the amount of the difference between $7,868,637 and the amount that the government will recover from the sale of the seized items. See, Osowski Plea Agreement [PDF], Tang Plea Agreement [PDF], and USAO release.
8/16. A grand jury of the U.S. District Court (NDCal) returned a four count indictment [PDF] against Lawrence Jou and Eric Pang alleging criminal copyright infringement in violation of 18 U.S.C. 371and 2319. Specifically, defendants produced and sold counterfeit CD containing Microsoft software. (Case No. CR01 40135 CW.) See, USAO release.
FEC Finally Picks General Counsel
8/20. The Federal Election Commission (FEC) named Lawrence Norton to be its next General Counsel, after a long search. The previous General Counsel, Lawrence Noble, resigned in January. He announced his resignation in December of last year. Noble is now Executive Director and General Counsel for the Center for Responsive Politics. Lois Lerner, the FEC's Associate General Counsel for Enforcement, is the Acting General Counsel.
Norton has been Associate Director in the Commodities Futures Trading Commmission's Division of Enforcement since 1996. Norton will begin work at the FEC in mid September. See, FEC release.
The FEC the federal regulatory commission responsible for enforcement of, issuance of advisory opinions pursuant to, and promulgation of regulations under, the Federal Election Campaign Act. The FEC has recently been involved in matters pertaining to use of the Internet to solicit and receive campaign and PAC contributions, and to engage in political speech.
SBC Files 271 Petition for Arkansas and Missouri
8/20. SBC Communications filed a Section 271 petition with the FCC for permission to provide interLATA services in the states of Arkansas and Missouri. SBC has already received approval from the FCC to provide long distance service in Texas, Kansas and Oklahoma. See, SBC release.
New Documents
Bush: letter to Congress re extension of export controls, 8/20 (HTML, WH).
FCC: final rule pertaining to collocation, 8/20 (HTML, FedReg).
USAO: Osowski Plea Agreement re computer fraud, 8/20 (PDF, USAO).
USAO: Tang Plea Agreement re computer fraud, 8/20 (PDF, USAO).
USDC: indictment of Lawrence Jou and Eric Pang for criminal copyright infringement, 8/17 (PDF, USDC).
WTO Releases FSC Replacement Act Report
8/20. A WTO panel made public its final report on the legality of the FSC Repeal and Extraterritorial Income Exclusion Act of 2000, passed in November of 2000. This is the law which replaced the Foreign Sales Corporation (FSC) provisions of US tax law. As expected, the report finds that the US law constitutes a prohibited export subsidy. The WTO ruled earlier that the previous FSC tax regime is an illegal export subsidy. So, late last year the Congress passed replacement legislation, which the EU again challenged. The EU's challenges to the US tax regime are, in part, retaliation for the US's challenges to EU agriculture policies. See, EU release.
The FSC tax regime benefits US exporters, including software and hardware producers with significant sales abroad, such as Microsoft, Cisco, and Motorola. Also, ongoing disputes between the US and EU over agriculture policies and the FSC tax regime have the potential to lead to an escalating trade war. The EU has indicated that if this were to occur it would target US high tech exporters for retaliatory tariffs. For background see, TLJ News Analysis: The FSC Tax Bill and Technology Exporters, Nov. 17, 2000.
Fed Circuit Reverses in Glaxo v. Ranbaxy
8/20. The U.S. Court of Appeals (FedCir) issued its opinion in Glaxo v. Ranbaxy Pharmaceuticals, a patent infringement case involving pharmaceuticals. Glaxo obtained U.S. Patent No. 4,267,320 in May of 1981 on a family of cephalosporin antibiotics. Glaxo obtained a two year term extension for the '320 patent under 35 U.S.C. 156. That patent expired on May 12, 2000. In December 1985, Glaxo obtained U.S. Patent No. 4,562,181 regarding an amorphous form of cefuroxime ester. In April 1999, Ranbaxy filed an Abbreviated New Drug Application (ANDA) with the FDA seeking approval to market a generic tablet form of cefuroxime axetil in anticipation of the '320 patent's expiration. Glaxo opposed Ranbaxy's ANDA and filed a complaint in U.S. District Court (DNJ) against Ranbaxy under 35 U.S.C. 271(e)(2). The District Court entered a preliminary injunction, precluding Ranbaxy from marketing any cefuroxime axetil product under its ANDA. Ranbaxy brought this interlocutory appeal. The Court of Appeals held that the District Court made an error in claim construction, vacated the injunction, and remanded.
Collocation Rules
8/20. The FCC published in the Federal Register a final rule pertaining to collocation. This order is in the proceeding named "In the Matter of Deployment of Wireline Services Offering Advanced Telecommunications Capability". It is numbered CC Docket No. 98-147. See, Federal Register, August 20, 2001, Vol. 66, No. 161, at Pages 43516 - 43523. On August 8 the FCC released this Fourth Report and Order in PDF format. This order was adopted by the FCC on July 12. The order takes effect on September 19, 2001.
More News
8/20. President Bush wrote a letter to the Speaker of the House of Representatives and the President of the Senate regarding his decision to extend the Export Administration Act (EAA). He extended the EAA by Executive Order on August 17.
8/16. The SEC instituted an administrative proceeding against Leslie Crone, an accountant and former CFO of Max Internet Communications. The SEC simultaneously made findings and imposed sanctions against Crone. He made misstatements regarding Max's financial condition, including in filings with the SEC. He is suspended from appearing or practicing before the SEC as an accountant. See, SEC release.
8/17. The Recording Industry Association of American (RIAA) stated that the U.S. District Court (CDCal) granted summary judgment to plaintiffs in a copyright infringement case against Media Group and its President. See, RIAA release.
8/20. The FCC named Barbara Douglas Associate Chief for Program Coordination and Management in the FC's Consumer Information Bureau (CIB). She will be Chief of Staff to the Bureau Chief, Dane Snowden. See, FCC release [PDF].
Copps Finalizes Staff
8/20. FCC Commissioner Michael Copps announced members of his permanent staff. Jordan Goldstein will be Senior Legal Advisor, and Susanna Zwerling and Paul Margie will be Legal Advisors. Carolyn Conyers is Confidential Assistant. See, FCC release.
Jordan Goldstein, who is currently interim Senior Legal Advisor, was named Senior Legal Advisor. He will focus on competition, universal service, and broadband deployment. Goldstein was previously a legal advisor to former Commissioner Susan Ness. Goldstein has also been legal counsel to the Chief of the Common Carrier Bureau (CCB), an attorney in the CCB's Policy and Program Planning Division, and before that, an attorney at the NTIA.
Susanna Zwerling, who is currently interim Legal Advisor, has been named Media and Consumer Protection Legal Advisor. She will focus on all media issues, and consumer protection issues, including slamming, cramming, and truth in billing. She was previously Assistant Bureau Chief for Planning and Communication in the Mass Media Bureau (MMB). Prior to that she was special counsel to the Chief of the MMB, and an attorney advisor in the Policy and Rules Division. Before joining to the FCC in 1997, she was a trial attorney in the Telecommunications Task Force of the Antitrust Division of the Department of Justice. And prior to that, she was an associate in the New York City office of the law firm of Debevoise & Plimpton. She also was a legislative assistant to former Representative and now Sen. Charles Schumer (D-NY).
Paul Margie was named Spectrum and International Legal Advisor. Margie, who started work for Commissioner Copps on August 20, was previously Senior Commerce Counsel for Sen. John Rockefeller (D-WV), a senior member of the Senate Commerce Committee, which oversees the FCC. He is also an Adjunct Professor of Law at Georgetown University (GU), where he co-teaches a course titled Law in Cyberspace. He also previously worked at the Washington DC law firm of Wiley Rein & Fielding, in its communications and technology law practice groups.
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.
Wednesday, August 22
Deadline to submit comments to the Copyright Office (CO) in response to its notice of proposed rule making regarding rates and terms for the digital performance of sound recordings. The CO requests comment on proposed regulations that will govern the RIAA collective when it functions as the designated agent receiving royalty payments and statements of accounts from nonexempt, subscription digital transmission services which make digital transmissions of sound recordings under the provisions of Section 114 of the Copyright Act. See, Federal Register, July 23, 2001, Vol. 66, No. 141, at Pages 38226 - 38229.
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