|FCC Adopts Software Defined
|9/13. The FCC adopted rule
changes at its September 13 meeting to accommodate the
authorization and deployment of a software defined radios (SDRs).
The FCC released a statement,
in which it wrote: "Software defined radios can be
quickly reprogrammed to transmit and receive on multiple
frequencies in different transmission formats. This
reprogramming capability could change the way users
traditionally communicate across wireless services and promote
more efficient use of radio spectrum. In a software defined
radio, functions that were formerly carried out solely in
hardware, such as the generation of the transmitted radio
signal and the tuning of the received radio signal, are
performed by software. Because these functions are carried out
in software, the radio is programmable, allowing it to
transmit and receive over a wide range of frequencies and to
emulate virtually any desired transmission format." (ET
|Michael Powell Addresses
Events of September 11
|9/13. FCC Chairman Michael Powell
made a statement
at the FCC's September 13 meeting regarding the events of
September 11. He praised the work of telecom companies to
maintain service in New York City, and stated that "I am
confident that these efforts will continue to ensure the
nation's communications infrastructure will operate
effectively to serve the communications needs of our citizens
and an efficient functioning economy."
|Martin Names Bohigan to be
|9/13. FCC Commissioner Kevin Martin
named Catherine Bohigian to be his Legal Advisor on
cable and mass media issues. Like Martin, she previously
worked in the Washington DC office of the law firm of Wiley Rein & Fielding.
Prior to law school, she worked as a legislative analyst for
Bellcore (now Telcordia
Technologies), and as a program analyst for IBM governmental affairs. See, FCC
|FCC Examines Ownership
|9/13. The FCC adopted, but did not release, a Further Notice
of Proposed Rulemaking (FNPRM) to review its horizontal and
vertical limits for cable companies. (CS Docket Nos. 98-82 and
96-85, and MM Docket No. 92-264.) See, FCC
release. The FCC also adopted, but did not release, a NPRM
to review its rule barring common ownership of a broadcast
station and daily newspaper in the same market, and to
consider whether or to what extent the rule should be revised.
(MM Docket No. 01-235). See, FCC
|BXA Issues Injunction for
Exporting Computer Equipment to Terrorist States
|9/13. The Bureau of Export
Administration (BXA) published a notice
in the Federal Register regarding its injunction against
Infocom, its officers, and others, for selling computer
equipment to Libya and Syria in violation of the Export
Administration Regulations (EAR). The notice contains a full
copy of the BXA's September 6 order, which provides, in part,
that Infocom and others "may not, directly or indirectly,
participate in any way in any transaction involving any
commodity, software or technology (hereinafter collectively
referred to as "item") exported or to be exported
from the United States that is subject to the Export
Administration Regulations (EAR), or in any other activity
subject to the EAR ..." The notice further provides
"notice to companies in the United States and abroad that
they should cease dealing with Infocom ..." Infocom is
based in Richardson, Texas. Its CEO is Bayan Medhat Elashi.
Four other Elashis are covered by the order, as is Fadwa
Elafrangi, the majority owner of Infocom. The order also
covers Tetrabal Corporation, Inc. See, Federal Register,
September 13, 2001, Vol. 66, No. 178, at pages 47630 - 47632.
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|Offering Virtual Stocks Can
Violate Securities Laws
|9/13. The U.S. Court of Appeals (1stCir) issued its opinion
v. SG Ltd, a case regarding whether virtual
shares in an enterprise existing only in cyberspace fall are
affected by the federal securities laws. The Appeals Court,
v. Howey, reversed the District Court's dismissal of the
Facts. SG operated a web site called StockGeneration
that offered shares in eleven "virtual companies"
listed on the web site's "virtual stock exchange."
SG arbitrarily set the purchase and sale prices of each of
these imaginary companies in biweekly "rounds," and
guaranteed that investors could buy or sell any quantity of
shares at posted prices. SG advertised that investing in one
of the stocks was a "game without any risk" and that
it "is supported by the owners of SG, this is why its
value constantly rises; on average at a rate of 10%
monthly". SG further stated that "capital inflow
from new participants provided liquidity for existing
participants who might choose to sell their virtual
shareholdings". SG later sharply reduced the prices of
shares, and suspended all pending requests to withdraw funds.
Finally, SG asserted that the web site offerings were merely a
SEC Complaint. The SEC filed a civil complaint in U.S.
District Court (DMass) alleging violation of the registration
and anti fraud provisions of the federal securities laws.
Specifically, the SEC alleged offer, sale or delivery of
unregistered securities in violation of the Securities Act of
1933 § 5(a), (c), 15 U.S.C.
§ 77e(a), (c); the SEC also alleged fraud in the offer or
sale of securities in violation of § 17(a), 15 U.S.C.
§ 77q(a); finally, the SEC alleged fraud in purchase or
sale of securities in violation of the Securities Exchange Act
of 1934 § 10(b), 15 U.S.C.
§ 78j(b), and SEC Rule 10b-5, 17 C.F.R. 240.10b-5. The
SEC alleged that SG's offerings constituted investment
District Court Dismissal. The District Court dismissed
the complaint for failure to state a claim upon which relief
can be granted pursuant to FRCP 12(b)(6), holding that the
complaint did not allege facts constituting transactions in
Appeals Court. The First Circuit reversed. It held the
SEC had satisfied the three pronged test set out in the
seminal case of SEC
v. Howey, 328 U.S. 293 (1946), to determine whether SG
offered investment contracts, that is, (1) the investment of
money (2) in a common enterprise (3) with an expectation of
profits to be derived solely from the efforts of the promoter
or a third party.
|Patent Infringement Case
|9/12. The U.S.
Court of Appeals (FedCir) issued its opinion in Fin
Control Systems v. OAM, a patent infringement
case involving removable surfboard fins. The District Court
granted summary judgment that OAM did not infringe Fin Control
Patent No. 5,464,359, either literally or under the
doctrine of equivalents. The Appeals Court affirmed in part,
vacated in part, and remanded.
|9/10. Paul Roye of the SEC gave a speech
to investment advisors in Philadephia. Among the topics that
he discussed was electronic record keeping by investment
advisors, and the recently promulgated changes to Rule
204-2, implementing the Electronic Signatures in Global and
National Commerce Act, also known as the E-SIGN Act. Roye is
Director of the SEC's Division of Investment Management. He
addressed the National Symposium on Investment Adviser
9/11. Microsoft filed its Reply
Brief with the Supreme Court in Microsoft v. U.S.A.
This is its reply to the government's opposition to its
petition for writ of certiorari seeking to have the entirety
of Judge Jackson's findings of fact and conclusions of law and
judgment set aside for improper conduct by the Judge.
|Most Congressional hearings that had been scheduled for
Thursday, September 13, were cancelled or postponed, including
the House Judiciary
Committee's meeting to mark up HR
1552 (Internet Tax Nondiscrimination Act), and the Senate Commerce
Committee's Science, Technology, and Space Subcommittee's
hearing on digital divide issues.
|Ninth Circuit Rules in
Downing v. Abercrombie
|9/13. The U.S.
Court of Appeals (9thCir) issued its opinion
[PDF] in Downing
v. Abercrombie & Fitch, a case involving
publication of pictures and names of individuals without their
permission in an advertising catalogue. The Appeals Court
reversed a District Court summary judgment for the advertiser.
The individuals' intellectual property, privacy, and other,
rights prevailed over the free speech and fair use rights of
& Fitch (AF) publishes a fat quarterly catalogue to
advertise its clothing and other products. This advertising
catalogue also contains some "articles". One edition
of the catalogue published pictures and identities of the
plaintiffs without their permission. The pictures were taken
in Hawaii. The catalogue also included pictures of scantily
Complaint. Plaintiffs filed a complaint in U.S.
District Court (CDCal) against AF alleging various federal
and California claims. Plaintiffs alleged violation of
California's common law and statutory prohibition against
misappropriation of a person's name and likeness for
commercial purposes, a violation of the Lanham Act for
confusion and deception indicating sponsorship of Abercrombie
goods, and a claim for negligence and defamation.
District Court. The District Court entered summary
judgment for AF. It held that the California state claims were
foreclosed because AF's use of the photograph was protected by
the First Amendment; it also held that these claims were
preempted by the federal Copyright Act. It further held that
Hawaii law was the proper choice of law for some of these
claims; that the Lanham Act claim was precluded by the First
Amendment and it was also precluded by the nominative fair use
doctrine; and that there was insufficient evidence to sustain
the negligence or defamation claims.
First Amendment. The Appeals Court reversed on almost
all issues, and remanded. It held that the First Amendment
does not insulate AF in this case because its
"articles" were advertising copy.
Copyright Act Preemption. The Appeals Court also held
that the federal Copyright Act does not preempt this action.
It wrote that while the Copyright Act does preempt state laws
that are equivalent to the exclusive rights contained in §
106 of the Copyright Act, in this case, "it is not the
publication of the photograph itself, as a creative work of
authorship, that is the basis for Appellants' claims, but
rather, it is the use of the Appellants' likenesses and their
names pictured in the published photograph."
Other Issues. The Appeals Court also reversed the
District Court on the choice of law issue. The Appeals Court
also reversed District Court's rejection of the Lanham Act
43(a) claim, and its holding for AF on nominative fair use.
Scantily Clad Models. However, the Appeals Court
affirmed the summary judgment on the defamation claim.
Plaintiffs had submitted no evidence of injury. Apparently, it
is not defamation to depict someone in a clothing catalogue
with nude or scantily clad beach models.
|Friday, Sept 14
of the FCC's Public
Safety National Coordination Committee scheduled for September
13 and 14. See, FCC
notice of postponement.
2:00 - 5:00 PM. National Science
Foundation's (NSF) Advisory Committee for
Cyberinfrastructure will hold a meeting to develop a plan
for the preparation of a report to the NSF regarding advanced
cyberinfrastructure and the evaluation of the existing
Partnerships for Advanced Computational Infrastructure.
Teleconferencing is available. See, notice
in Federal Register, September 4, 2001, Vol. 66, No. 171, at
Page 46293. Location: Room 1150, National Science Foundation,
4201 Wilson Boulevard, Arlington, Virginia.