|3rd Circuit Reverses Gag
Order in Key Logger System Case
|8/27. The U.S.
Court of Appeals (3rdCir) issued its opinion
v. Scarfo, regarding "a lawyer's right to
make extrajudicial statements to the press relating to a
former client's pending criminal case." This opinion is
noteworthy because the underlying case, which involves
government search and seizure of information from personal
computers, has attracted wide attention from technology
writers and legal scholars, their readers, and practitioners.
Background. Nicodemo Scarfo is an encryption savvy
mobster who is charged with various illegal gambling acts. The
FBI obtained Scarfo's encryption passphrase by surreptitiously
installing on his personal computer the FBI's "Key Logger
System", which records keystroke entries. Most recently,
the FBI has invoked the Classified Information Procedures Act,
Title 18, U.S.C, Appendix III, to avoid producing information
about the "Key Logger System" to a Scarfo. He seeks
discovery regarding the FBI's "Key Logger System" to
support his motion to suppress evidence gathered as a result
of use of the system. His first attorney in this case, Donald
Manno, was disqualified by the District Court. Manno
subsequently talked to the Philadelphia Enquirer about legal
and privacy issues raised by the FBI's "Key Logger
Gag Order. The Court then ordered that: "no lawyer
representing or who has represented a party in this criminal
matter could make any extrajudicial statement to the press
regarding legal issues which may be raised concerning
electronic or computer surveillance techniques, which a
reasonable person would expect to be disseminated by means of
public communication, which he knows or reasonably should know
will have a substantial likelihood of causing material
prejudice to the determination of the anticipated or filed
pre-trial motion, or the conducting of a fair trial in the
Appeals Court. The Appeals Court reversed the gag
order. It wrote that the attorney's "comments on an
interesting legal issue did not pose a threat to the fairness
of the trial or to the jury pool. Nor did the District Court
identify a risk of a carnival-type atmosphere in the case,
although organized crime cases often draw massive public
interest. ... There having been no identifiable prejudice or
risk of prejudice, the gag order was erroneous."
|James Bond 007: Doctrine of
Laches Bars Claims of Infringement
|8/27. The U.S. Court
of Appeals (9thCir) issued its opinion
[PDF] in Danjaq v. Sony,
a case applying the equitable doctrine of laches to ancient
claims of infringement of intellectual property rights in the
name James Bond. The Appeals Court affirmed the District Court
ruling that the doctrine of laches bars the plaintiffs' forty
year old claims.
This is a long but fascinating opinion that recounts the
history and content of the James Bond books and screenplays,
and the law of the doctrine of laches in the context of
intellectual property claims.
|Spread Spectrum Devices
|8/27. August 27 was the deadline to submit comments to the
FCC in its further notice of proposed rule making (FNPRM) of
May 10 regarding spread spectrum devices. See, Further
Notice of Proposed Rule Making and Order, adopted by the
FCC on May 10, 2001, and released on May 11, 2001. This is the
proceeding titled "In the Matter of Amendment of Part 15
of the Commission's Rules Regarding Spread Spectrum
Devices" and numbered ET Docket No. 99-231.
This FNPRM proposes to amend Part 15 of the FCC's rules to
improve spectrum sharing by unlicensed devices operating in
the 2.4 GHz band (2400 - 2483.5 MHz), provide for introduction
of new digital transmission technologies, and eliminate
unnecessary regulations for spread spectrum systems.
Specifically, this FNPRM proposes to revise the rules for
frequency hopping spread spectrum systems operating in the 2.4
GHz band to reduce the amount of spectrum that must be used
with certain types of operation, and to allow new digital
transmission technologies to operate pursuant to the same
rules as spread spectrum systems. It also proposes to
eliminate the processing gain requirement for direct sequence
spread spectrum systems, which will provide manufacturers with
increased flexibility and regulatory certainty in the design
of their products.
The FCC published comments in its web site. See, for example, comment
[PDF] submitted by Apple
[PDF] submitted by Intel, comment
[PDF] submitted by Texas
Instruments, and comment
[PDF] submitted by IEEE 802.
in Ford v. Texas re protectionist statute barring Internet car
sales, 8/27 (HTML, USCA).
in Danjaq v. Sony re doctrine of laches and infringement, 8/27
in USA v. Scarfo re FBI Key Logger System gag order, 8/27
in Nora Beverages v. Perrier Group re trade dress
infringement, 8/23 (HTML, USCA).
|5th Circuit Upholds
Protectionist Car Dealership Law
|8/27. The U.S.
Court of Appeals (5thCir) issued its opinion
Motor Company v. Texas, upholding the
constitutionality of a protectionist Texas statute backed by
car dealerships that prevents the car makers from selling cars
over the Internet. The Court rejected a Commerce Clause
challenge to the statute by 3 to 0. However, Judge Edith Jones
condemned the existing precedent, argued that the statute
harms consumers, and invited the Supreme Court to review the
Background. Electronic commerce provides the potential
for producers of goods or services to reduce or remove the
role of dealers, brokers and other middlemen. It can enable
producers to interact directly with customers, thereby
enabling consumers to realize significant savings. In some
situations, middlemen who risk losing some or all of their
role have resorted to seeking legislative or regulatory
protection. In the present case, auto dealers threatened by
competition from Internet sales have lobbied for, and
obtained, legislative protection. In Texas, for example, one
statutory section prohibits the selling cars without a
dealer's license, while its companion section prohibits car
makers from obtaining dealer's licenses.
Facts. Ford marketed pre-owned vehicles in Texas via a web site. On November
2, 1999, the Texas Motor Vehicle Division filed an
administrative complaint against Ford with the Texas Motor
Vehicle Board for selling cars without a dealer's license.
District Court. Ford filed a complaint in U.S District Court (WDTex)
against the state of Texas alleging that Texas' dealership
statute violates Ford's rights under the U.S. Constitution,
including the dormant Commerce Clause, the speech clause of
the First Amendment, and the Equal Protection and Due Process
clauses of the 14th Amendment. Ford also asserted that the
statute is unconstitutionally vague. Both parties filed
motions for summary judgment. The District Court granted
Texas's motion for summary judgment as to all of Ford's
Dormant Commerce Clause. The Commerce Clause, at Art.
I, § 8, provides that "The Congress shall have Power ...
To regulate Commerce with foreign Nations, and among the
several States ..." The "dormant Commerce
Clause" is the judicial concept that the Commerce Clause
also blocks states from regulating in a way that materially
burdens or discriminates against interstate commerce. The
Appeals Court held that the Texas statute does not
discriminate against interstate commerce. It relied heavily on
a case growing out of the 1973 oil embargo and resulting
shortage -- Exxon
v. Maryland, 437 U.S. 117 (1978). During the 1973 shortage
gas stations owned by producers and refiners received
preferential treatment. Afterwards, Maryland passed a law
prohibiting producers and refiners from operating gas stations
in Maryland. The Supreme Court found this to be a bar on
vertical integration that did not burden interstate commerce.
It rejected a Commerce Clause challenge.
In the Ford case, the Appeals Court reasoned that Exxon is
controlling. It elaborated that the dormant Commerce Clause
only bars state discrimination against out of state
businesses. Discrimination against a class of businesses that
is defined by some characteristic other than its state is not
violative of the dormant Commerce Clause. The Court wrote that
the Texas statute "does not discriminate based on Ford's
contacts with the State, but rather on the basis of Ford's
status as an automobile manufacturer." Moreover, it
"does not protect dealers from out-of-state competition,
it protects dealers from competition from manufacturers."
District Court Affirmed. The Appeals Court also
rejected Ford's argument that the Texas statute limits speech
-- i.e., the content of its web site. Similarly, it rejected
the remaining claims. The District Court was affirmed in full.
The opinion was written by Judge Benavides. Judges DeMoss and
Edith Jones Invites Supreme Court Review. Jones wrote a
"concurring" opinion which reads more like a
dissent. She wrote that she concurred only because Exxon v.
Maryland "compelled" that result. She continued that
"Exxon seems woefully out of step with the Court's
more recent cases." She also wrote that "Texas's
outright prohibition on retail competition from out-of-state
auto manufacturers is about as negative toward interstate
commerce as legislative action can get. If, as the Court says,
its negative commerce clause jurisprudence intends to prevent
"economic protectionism" of local businesses, ... ,
and to stop states from imposing higher (in this case
prohibitive) costs on products from out-of-state sources, ...
, then Ford's dealer- cooperative, consumer- friendly program
ought not be stymied by parochial state legislation. It should
be obvious that the flow of interstate goods is diminished
when barriers to entry totally prevent fair competition by a
class of potential distributors: the favored local
distributors' price and service incentives become less keenly
competitive, prices rise, and overall sales will decline from
the free-market equilibrium point. Since this Texas statute
appears to reflect a genre of state laws favoring local
automobile dealers over out-of-state manufacturers, perhaps
the Supreme Court will give us further guidance."
The elder President Bush had once seriously considered Judge
Jones, now 52, for a seat on the Supreme Court. Former
President Reagan appointed her to the Appeals Court at the age
of 36. She is a graduate of the University of Texas.
|Tristani to Leave FCC
|8/27. FCC Commissioner Gloria
Tristani announced that she will leave the FCC, effective
September 7, 2001. See, FCC
release. Tristani is a Democrat from New Mexico who was
appointed in 1997 by former President Clinton. She will return
to New Mexico, where she will likely run for public office.
She has spoken in the past about challenging Rep. Heather Wilson
(R-NM), who sits on the House Commerce Committee
and its Telecom Subcommittee. More recently, she has spoken
about running against Sen.
Pete Domenici (R-NM).
Tristani was generally supportive of former Chairman William
Kennard. She distinguished herself from other Commissioners by
promoting the V-Chip, and constantly scolding radio and TV
broadcasters for indecency, violence and lack of diversity in
their programming. She also outraged religious broadcasters by
seeking to limit their eligibility for educational licenses.
She also was the most consistent opponent of media
Tristani was also a supporter of the e-rate subsidy program,
universal service generally, and programs to increase the used
of telecommunications services in Indian country specifically.
There are currently three Republicans (Powell, Martin, and
Abernathy) and two Democrats (Copps and Tristani) on the FCC.
Tristani's departure will not upset the Republican majority.
By law, President Bush must nominate a Democrat, who must be
confirmed by the Senate.
8/24. FCC Commissioner Gloria Tristani gave a speech
in Albuquerque, New Mexico. She complained about obscenity on
broadcast radio, the lack of Hispanic characters on broadcast
TV, and the "digital divide" in Internet access.
|Standard Files Chapter 11
|8/27. Standard Media International, the parent company of
the Industry Standard and TheStandard.com, filed
a Chapter 11 petition in U.S. Bankruptcy Court (NDCal).
Standard Media also stated that "The court will now
oversee the sale of Standard Media's assets, which include the
magazine's subscriber list ..." See, release.
states that "The Industry Standard will not release your
personal data to anyone else without your consent."
|The Daily E-Mail Alert will not be published on Thursday,
August 30, Friday, August 31, or Monday, September 3 (Labor
|Tuesday, August 28
10:00 AM - 12:00 NOON. The FCC's Advisory Committee for the
2003 World Radiocommunication Conference will hold a meeting.
Location: Commission Meeting Room, 445 12th Street, SW, Room
TW-C305, Washington DC.
|8/27. The USPTO published
in the Federal Register requesting comments on issues
associated with the development of a plan to remove the patent
and trademark classified paper files from the USPTO's public
search libraries. Comments are due by September 26, 2001. See,
Federal Register, August 27, 2001, Vol. 66, No. 166, at Pages
45012 - 45014.
8/23. The U.S.
Court of Appeals (2ndCir) issued its opinion
Beverages v. The Perrier Group, a trade
dress infringement case involving water bottles decided
under § 43(a) of the Lanham Trademark Act, 15 U.S.C. §
8/15. Covad Communications Group, Inc., the parent company of Covad Communications Company,
filed a Chapter 11 petition for bankruptcy in the U.S.
Bankruptcy Court (DDel). See, Covad
release. Covad, based in Santa Clara, California, provides
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