Tech Law Journal Daily E-Mail Alert
August 29, 2001, 9:00 AM ET, Alert No. 259.
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10th Circuit Rules in Stock Options Case
8/28. The U.S. Court of Appeals (10thCir) issued its opinion in Mauldin v. WorldCom, a dispute over stock option agreements. Mauldin entered into four stock option agreements with MFS Intelenet, which was subsequently acquired by WorldCom. Mauldin sought to exercise these options. WorldCom refused. Mauldin filed a complaint in U.S. District Court (NDOkla) against WorldCom. The District Court granted summary judgment to WorldCom. Mauldin brought the appeal. The Court of Appeals reversed.
SEC Files Securities Fraud Complaint
8/27. The SEC filed a civil complaint in U.S. District Court (DOre) against Alpha Telecom and others alleging violation of federal securities laws in connection with a fraudulent offering of securities that raised about $100 Million. The District Court issued a temporary restraining order halting operations by defendants.
The defendants are Alpha Telecom Inc., American Telecommunications Company Inc., Strategic Partnership Alliance LLC, SP Marketing LLC, Paul Rubera, Robert McDonald, Ross Rambach, and Mark Kennison. The SEC stated that defendants raised at least $100 Million from over 7,000 investors for purported investments in pay telephones, which are actually a Ponzi scheme. The District Court (1) granted the SEC's motion for a TRO (2) ordered appointment of a receiver, (3) froze assets, (4) prohibited destruction of documents, (5) ordered an accounting, and (6) granted expedited discovery. See, SEC release. This is case number CV-01-1283 HA.
More News
8/28. The NTIA is advertising to fill the position of Associate Administrator for Telecommunication Sciences and Director of the Institute for Telecommunication Sciences in Boulder, Colorado. The position pays $122,083 to $133,700 per year. See, job announcement.
8/24. The FTC issued a release that states that it entered into a Stipulated Judgment and Order for Permanent Injunction in FTC v. Stout, a case brought under Section 5 of the Federal Trade Commission Act against fraudulent spammers who sold purported Internet registration services. On December 22, 1999, the FTC filed a civil complaint in U.S. District Court (DNJ) against Robert Stout, dba Global Internet Federal Registry, Inc., Get Out From Under.Com, Inc., and Donald Lytle. The complaint alleged that defendants sent unsolicited commercial e-mail to Internet news groups stating that because of the Children's Online Privacy Protection Act, consumers were required to certify their age to maintain access to the Internet. The messages directed consumers to defendants' web sites, which stated that "all Internet users are required to register here for Internet licensing," and provided an application form that collected names, addresses, credit card numbers, and expiration dates. The Stipulated Judgment, which was filed in May of 2001, enjoins defendants from continuing this practice.
Sklyarov and Elcomsoft Indicted
8/28. A grand jury of the U.S. District Court (NDCal) returned a five count indictment [PDF] against Elcom Ltd., aka Elcomsoft Co. Ltd., and Dmitry Sklyarov for criminal violations of copyright law in connection with their marketing and sale of a program that circumvents Adobe's e-book reader. Elcomsoft and Sklyarov are charged with violation of the anti circumvention section of the Digital Millennium Copyright Act (DMCA), 17 U.S.C. 1201.
Adobe Systems makes the eBook Reader, a program which can read books in an electronic format named eBook. The program is downloadable at Adobe's web site. Users can then purchase encrypted electronic books in eBook format from online bookstores, such as, and read them with the eBook Reader. The books are encrypted to protect copyright interests. Elcomsoft and Sklyarov produced software that enables people to copy and read these electronic books without paying.
The indictment states that Elcomsoft, a software company based in Moscow, Russia, and Sklyarov, an employee of Elcom, designed, produced, and marketed a program named the Advanced eBook Processor (AEBPR). This program circumvents the Adobe Acrobat eBook Reader by removing all limitations on an ebook purchaser's ability to copy, distribute, and print ebooks.
Count One alleges conspiracy to traffic in technology primarily designed to circumvent and marketed for use in circumventing, technology that protects a right of a copyright owner in violation of 18 U.S.C. 371. Counts Two and Three both allege trafficking in technology primarily designed to circumvent technology that protects a right of a copyright owner in violation of 17 U.S.C. 1201(b)(1)(A) and 18 U.S.C. 2. Count Four and Five both allege trafficking in technology marketed for use in circumventing technology that protects a right of a copyright owner in violation of 17 U.S.C. 1201(b)(1(C) and 18 U.S.C. 2.
Sklyarov was previously charged by criminal complaint [PDF] with a single count of trafficking in a product designed to circumvent copyright protection measures, on July 17.
Both defendants are scheduled to be arraigned at 9:30 AM on August 30, 2001 before Judge Seeborg.
This is case number CR-01-20138. Assistant U.S. Attorneys Scott Frewing and Joseph Sullivan are prosecuting the case. See also, USAO release.
Copyright Office Seeks Comments on NPRM on Compulsory Licensing
8/28. The Copyright Office (CO) published a notice in the Federal Register seeking public comments on proposed amendments to the regulations governing the content and service of certain notices on the copyright owner of a musical work. The notice is served or filed by a person who intends to use the work to make and distribute phonorecords, including by means of digital phonorecord deliveries, under a compulsory license, pursuant to 17 U.S.C. 115. Comments are due by September 27, 2001. See, Federal Register, August 28, 2001, Vol. 66, No. 167, Page 45241 - 45245.
The Daily E-Mail Alert will not be published on Thursday, August 30, Friday, August 31, or Monday, September 3 (Labor Day).
Wednesday, August 29
9:00 AM. The Center for Democracy and Technology (CDT) will hold a press conference at the National Press Club to release a report that concludes that most providers of online financial services fail to offer customers easy online options for controlling use of personal financial data. The speakers will be Ari Schwartz (CDT), David Butler (Consumers Union), and Peter Swire (George Washington University Law School). For more information, contact Dan Lerner of the CDT at 637-9800 x315 or Location: Murrow Room, 529 14th St. NW, 13th Floor, Washington DC.
Tuesday, September 4
The Senate returns from its August recess. It is scheduled to begin several days of debate on S 149, the Export Administration Act of 2001.
12:30 PM. Rod Paige, Secretary of Education, will speak at a National Press Club luncheon.
Wednesday, September 5
The House returns from its August recess.
Deadline to file reply comments with the FCC in its Notice of Inquiry (NOI) regarding video competition. On June 20, 2001 the FCC adopted a NOI into the status of competition in the market for the delivery of video programming. The FCC stated in a release that "The NOI seeks information that will allow the FCC to evaluate the status of competition in the video marketplace, prospects for new entrants to that market, and its effect on the cable television industry and consumers. The NOI also solicits information regarding the extent to which consumers have choices among video programming distributors and delivery technologies." See, CS Docket No. 01-129.
New Documents
USDC: indictment of Sklyarov and Elcomsoft, 8/28 (PDF, USAO).
USCA: opinion in Mauldin v. WorldCom re stock option agreements, 8/28 (HTML, USCA).
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