Tech Law Journal Daily E-Mail Alert
October 15, 2001, 9:00 AM ET, Alert No. 286.
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Representatives Announce Outline for Privacy Legislation
10/12. Rep. Cliff Stearns (R-FL), Rep. Billy Tauzin (R-LA), Rep. Bob Goodlatte (R-VA), and Rep. Rick Boucher (D-VA) held a press conference to outline a proposal for future privacy legislation. The four released a one page outline, but have not yet introduced a bill. The proposal calls for preemption of state laws, FTC enforcement, and no private right of action. The proposal would also apply to both online and offline entities that collect personally identifiable information. It recommends requiring privacy statements, opportunity to limit sale or disclosure of information, security statements, and safe harbor provisions. The four suggested that legislation would be forthcoming early next year.
Rep. Goodlatte said that one goal is to "make absolutely certain that we preempt state legislatures from creating a massive and conflicting array of regulatory entanglements that would, I think, harm are efforts to truly protect privacy while promoting the Internet." He also said that he wants to "preempt anyone in the Congress from introducing legislation that is a bureaucratic fix to this problem."
Rep. Tauzin also addressed privacy standards of government web sites. "I think that it is abhorrent that any federal web site should have a cookie on it."
Rep. Stearns is Chairman of the House Commerce Committee's Subcommittee on Commerce Trade and Consumer Protection, which has held six hearings on Internet privacy this year. However, he has not introduced any legislation. He commented on the Senate Commerce Committee: "Fritz Hollings has dropped a bill, but he did not have the hearings we had. So, I think we have a knowledge of this issue here in the House, in our Committee ..."
Rep. Boucher addressed "the means by which enhanced privacy guarantees be extended to Internet users." He said that "it is very important that that anyone who uses the Internet have notice of what information is collected from him by the web sites that he visits, either through the use of cookies or web bugs or other technologies that enable the web site to collect information. So, every web site that collects information should have a statement that is readily accessible to the web site visitor of the precise information which is collected."
Rep. Boucher also stated that "the web site should put forward information about how the information, once collected, is used, and provide clear disclosure of that. If it is used internally for its own marketing purposes, that fact would be reflected. If it is conveyed under any circumstances to third parties, that fact would be stated, and in my opinion, there ought to be some at least generic description about the kinds of third parties who have access to the information."
Rep. Boucher continued that "once that information is made available to the web site visitor, he needs to have an opportunity to act on it. And so a third, very important principle, is the ability for the web site visitor to opt out and to decline to have any information about him collected. As a practical matter, that might mean that he needs to leave the web site without using the services of the web site." He also reiterated the viewpoint that there is a need for preemption, and a safe harbor.
Kotelly Names Mediator in Microsoft Case
10/12. The U.S. District Court (DDC) named Eric Green to be a mediator in the Microsoft antitrust case. He is a professor at the Boston University's School of Law, where he teaches courses and seminars in evidence, dispute resolution, complex processes, negotiation and mediation, and mass torts. He is also the founder of two Boston firms specializing in alternative dispute resolution.
Sen. Enzi Introduces Net Tax Moratorium and Sales Tax Bill
10/11. Sen. Mike Enzi (R-WY) introduced S 1542, the Internet Tax Moratorium and Equity Act. This bill would make permanent the existing moratorium on Internet access taxes, and extend the current moratorium on multiple and discriminatory taxes for four years. It would also and authorize states to enter into an interstate sales use tax compact, and then require all remote sellers to collect and remit sales and use taxes. The current moratorium is set to expire on October 21. The bill was referred to the Senate Committee on Health, Education, Labor, and Pensions.
More News
10/12. The U.S. Court of Appeals for the District of Columbia Circuit heard oral argument in U.S. Telecom Association v. FBI, No. 00-5386.
10/12. The Department of Justice's Antitrust Division released a document titled "Merger Review Process Initiative". See also, DOJ release.
10/12. The Senate Judiciary Committee's Subcommittee on Technology, Terrorism, and Government Information held a hearing to examine the role of technology in preventing the entry of terrorists into the U.S. See, prepared testimony of Glenn Fine (Department of Justice), James Ziglar (Immigration and Naturalization Service), Mary Ryan (State Department), Steven Camarota (Center for Immigration Studies), Greg Spadorcio
(NEC Technologies), and Paul Collier (Biometrics Foundation). See also, statement by Sen. Patrick Leahy (D-VT).
People and Appointments
10/12. President Bush announced his intent to designate Thomas White to be Acting Assistant Secretary of Defense for Special Operations and Low Intensity Conflict. See, White House release.
10/12. William Kolasky was named Deputy Assistant Attorney General in charge of international antitrust and policy enforcement for the Department of Justice's Antitrust Division. He was previously a partner in the Washington DC office of the law firm of Wilmer Cutler & Pickering, where he was co-chair of the firm's antitrust and competition practice. See, DOJ release.
10/4. Dave Segre rejoined the Palo Alto office of the law firm of Wilson Sonsini Goodrich & Rosati as a partner. For the last year and a half Segre was an SVP at fusionOne, a privately held provider of Internet based synchronization software and services. See, WSGR release.
Seattle Prosecutor Assassinated
10/12. Thomas Wales, an Assistant U.S. Attorney for the Western District of Washington in Seattle, died as a result of gunshot wounds inflicted on Thursday night, October 11. He was responsible for prosecuting major business crimes and bank frauds. He was also the Executive Assistant U.S. Attorney to former U.S. Attorney Katrina Pflaumer at the time of the "Assassination Politics" prosecutions. The USAO obtained a conviction of Carl Johnson for sending threatening e-mail messages to federal judges and others. Specifically, Johnson was convicted of one count of retaliating against a judicial officer, one count of obstructing justice by making a death threat against a judicial officer, and two counts of transmitting threatening communications. The first three counts pertained to death threats against federal judges. The fourth count pertained to a death threat sent to Bill Gates. See, CCIPS release number one and release number two regarding the Assassination Politics matter. See also, USAO release regarding the death of Wales.
Senate and House Pass Anti Terrorism Bills
10/12. The Senate passed S 1510, the USA Act, by a vote of 96 to 1. Sen. Russ Feingold (D-WI) cast the lone vote in opposition. See, Roll Call No. 302. The House passed a substitute version of HR 2975, the PATRIOT Act, by a vote of 337 to 79 late on Friday afternoon, October 12. See, Roll Call No. 386.
The House Rules Committee met at 8:00 AM on Friday to adopt H Res 264, a rule to substitute a bill that closely resembles the Senate bill, in place of the version of HR 2975 that was unanimously approved by the House Judiciary Committee (HJC) on October 3. The full House then approved this rule by a vote of 214 to 208, on a largely party line vote, on Friday afternoon. Much of the criticism voiced on the House floor focused on this last minute procedure to bypass the HJC bill.
During final debate on the bill, supporters stressed the need of law enforcement and intelligence agencies to have new tools to fight terrorism. Rep. James Sensenbrenner (R-WI) stated that "we have to change the way we think about safety and security." Opponents argued that the bill violates civil liberties. Rep. John Conyers (D-MI) compared it to the Alien and Sedition Act, suspension of habeas corpus during the Civil War, and internment of Americans of Japanese ancestry during World War II. However, after several close procedural and dilatory votes, the House overwhelmingly voted for final passage.
Both bills contain many provisions that would increase the ability of law enforcement, intelligence, and other government agencies to combat terrorism, including expanded authority to conduct electronic surveillance of phone and Internet communications. While the bills passed by the House and the Senate are now very similar, there remain some differences. For example, the House bill contains a five year sunset provision (the HJC version had included a two year sunset), while the Senate bill has no sunset provision. Now, either the Senate must accept the House version, or the bill must go to a conference committee.
President Bush issued a statement Friday morning praising the Senate for passing its bill. Later in the day, he released a statement praising the House for passing its version.
Content Versus Routing and Signaling Information
10/12. The House and Senate versions of the anti terrorism bill both extend pen register and trap and trace authority to "routing" and "addressing" information in an "electronic communication". Pen registers and trap and trace devices are telephone industry concepts. The former are used to obtain outgoing phone numbers. The latter are used to obtain incoming numbers. Thus, these bills extend pen register and trap and trace authority to Internet communications. Both bills provide that "such information shall not include the contents of any communication". This still leaves much open for future implementation and interpretation. The definition is important because court orders authorizing pen registers and trap and trace devices do not require a showing of probable cause, as is the case for wiretaps.
Rep. Bob Goodlatte (R-VA) and Rep. Rick Boucher (D-VA) had sought language clarifying what constitutes content in the context of Internet communications, but settled for language in the House Judiciary Committee (HJC) report. During floor debate on October 12, Rep. Goodlatte asked whether the HJC's report on HR 2975 also applies to the version of the bill approved by the full House. Rep. James Sensenbrenner (R-WI), the Chairman of the Committee, and floor manager of the bill, stated that it does.
The following are relevant excerpts from this report, House Report 107-236:
    "This section updates the language of the statute to clarify that the pen/register authority applies to modern communication technologies. Current statutory references to the target `line,' for example, are revised to encompass a `line or other facility.' Such a facility includes: a cellular telephone number; a specific cellular telephone identified by its electronic serial number (ESN); an Internet user account or e-mail address; or an Internet Protocol (IP) address, port number, or similar computer network address or range of addresses. In addition, because the statute takes into account a wide variety of such facilities, section 3123(b)(1)(C) allows applicants for pen register or trap and trace orders to submit a description of the communications to be traced using any of these or other identifiers.
    Moreover, the section clarifies that orders for the installation of pen register and trap and trace devices may obtain any non-content information -- `dialing, routing, addressing, and signaling information' -- utilized in the processing or transmitting of wire and electronic communications. [Footnote 1: Thus, for example, non-content information contained in the `options field' of a network packet header constitutes `signaling' information and is properly obtained by an authorized pen register or trap and trace device.]
    Thus, for example, an order under the statute could not authorize the collection of email subject lines, which are clearly content. Further, an order could not be used to collect information other than `dialing, routing, addressing, and signaling' information, such as the the portion of a URL (Uniform Resource Locator) specifying Web search terms or the name of a requested file or article."
Third Circuit Rules in Computer Sabotage Case
10/12. The U.S. Court of Appeals (3rdCir) issued its opinion in USA v. Lloyd, reversing a declaration of mistrial in a case involving computer sabotage.
Timothy Lloyd was the computer system administrator for Omega Engineering Corp., a New Jersey based manufacturer of industrial process measurement devices and control equipment. He had a falling out with his employer, and eventually, was fired. Prior to being fired he installed a malicious program on the central file server of Omega's computer network. It caused Omega's design and production computer programs to be permanently deleted after his termination. 1,200 computer programs were deleted and purged, crippling Omega's manufacturing capabilities and resulting in a loss of millions of dollars in sales and contracts.
Lloyd was indicted and convicted by a jury of computer sabotage in violation of 18 U.S.C. 1030(a)(5)(A) and 18 U.S.C.  2. Subsequently, a trial juror informed the District Court that during deliberations she saw a TV report on the Love Bug computer virus. The District Court declared a mistrial. The U.S. appealed. The Appeals Court reversed the grant of a new trial, reinstated the conviction, and directed the District Court to proceed to sentencing.
PPI Backs Trade Promotion Authority Bill
10/12. The Progressive Policy Institute (PPI), a Democratic party think tank, released a report titled "Trade Promotion Authority: The Key Questions". It encourages support for HR 3005, the Bipartisan Trade Promotion Authority Act of 2001, which was passed by the House Ways and Means Committee on Tuesday, October 9, by a vote of 26 to 13. The bill's lead sponsor is Rep. Bill Thomas (R-CA), Chairman of the Committee. Other sponsors include Rep. Cal Dooley (D-CA), Rep. William Jefferson (D-LA) and Rep. John Tanner (D-TN). The PPI concluded that "The Dooley - Jefferson - Tanner - Thomas proposal is a good approach to it, and deserves progressive support." The report was written by Edward Gresser.
Monday, Oct 15
The House will not be in session. The Senate will convene at 3:30 PM, when it will likely take up HR 2506, the Foreign Operations Appropriation Bill.
POSTPONED. 10:00 AM - 12:00 NOON. The American Enterprise Institute (AEI) and the Brookings Institution will jointly host a panel discussion titled The PCS C Block Mess: The FCC as Auctioneer and Banker. The speakers will be Rudy Baca (Precursor Group), George Reed-Dellinger (Washington Analysis), Harold Furchtgott-Roth (AEI), John Thorne (Verizon), and Thomas Hazlett (AEI).
12:00 NOON - 2:00 PM. The Federal Communications Bar Association (FCBA) will host an expensive lunch featuring FCC Commissioner Michael Copps. Location: Capitol Hilton, Washington DC.
Tuesday, Oct 16
House will meet at 12:30 PM for morning hour and at 2:00 PM for legislative business. No recorded votes are expected before 6:00 PM. The House will consider a number of measures under suspension of the rules, including HR 1552, the Internet Tax Nondiscrimination Act, which extends the existing Internet tax moratorium for two years.
9:30 AM. The U.S. Court of Appeals for the District of Columbia Circuit will hear oral argument in COMSAT Corp v. FCC, No. 00-1458. Judges Ginsburg, Williams and Henderson will preside. Location: 333 Constitution Ave., NW, Washington DC.
9:30 - 11:30 AM. The American Enterprise Institute (AEI) will host a seminar at which Jeffrey Rohlfs (Strategic Policy Research, Inc.) will present his new book titled Bandwagon Effects in High Technology Industries. He will also address the role of bandwagon effects in the debate among economists and policy analysts over whether governments should set technical standards. The price to attend is $5 (waived for AEI supporters, government employees, and media). Location: AEI, Wohlstetter Conference Center, Twelfth Floor, 1150 17th Street, NW, Washington DC.
Wednesday, Oct 17
9:30 AM. The Senate Banking Committee will hold a hearing on the nominations of Susan Bies and Mark Olson to be members of the Board of Governors of the Federal Reserve System. Location: Room 538, Dirksen Building.
10:00 AM. The Senate Judiciary Committee will hold a hearing to examine homeland defense matters. Location: Room 106, Dirksen Building.
12:15 PM. The Federal Communications Bar Association's (FCBA) Mass Media Practice Committee will host a brown bag lunch. The speakers will be the FCC Commissioners' legal advisors on mass media issues: Susan Eid (Powell), Stacy Robinson (Abernathy), Susana Zwerling (Copps), and Catherine Bohigian (Martin). RSVP to Kathy Dole at Location: National Public Radio, first floor conference room, 635 Massachusetts Ave., NW, Washington DC.
Thursday, Oct 18
Day one of a three day conference of the American Intellectual Property Law Association (AIPLA). Location: Crystal Gate Marriott Hotel, 1700 Jefferson Davis Highway, Arlington, Virginia.
9:30 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing titled "Transition to Digital Television: Progress on Broadcaster Buildout and Proposals to Expedite Return to Spectrum." Rep. Fred Upton (R-MI) will preside. Location: Room 2123, Rayburn Building.
9:30 AM. The U.S. Court of Appeals for the District of Columbia Circuit will hear oral argument in Celtronix Telemetry v. FCC, No. 00-1400. Judges Ginsburg, Williams and Henderson will preside. Location: 333 Constitution Ave., NW, Washington DC.
9:30 - 11:30 AM. The American Enterprise Institute (AEI) will host another program in its Seminar Series in Telecommunications Deregulation. This event is titled "On Refusing to Deal with Rivals." The speaker will be Glen Robinson of the University of Virginia School of Law. The price to attend is $5 (waived for AEI supporters, government employees, and media). Location: AEI Wohlstetter Conference Center, Twelfth Floor, 1150 17th Street, NW, Washington DC.
12:00 NOON. The Heritage Foundation will host a panel discussion titled "Freedom and Security: Preserving Constitutional Liberties in Times of War." The speakers will be Jennifer Neustead (Office of Legal Policy, DOJ), Lee Casey (Baker & Hostettler), Todd Gaziano (Heritage), and Ed Meese (Heritage). Location: Heritage Foundation, 214 Massachusetts Ave NE, Washington DC.
2:00 PM. The Senate Judiciary Committee will hold hearings on pending nominations. Location: Room 226, Dirksen Building.
2:30 - 4:00 PM. The American Enterprise Institute (AEI) will host a panel discussion titled "Trade Promotion Authority -- What's the Bottom Line for Congress?" The speakers will be Jagdish Bhagwati (Columbia University), I.M. Destler (University of Maryland), Brink Lindsey (Cato Institute), and Daniel Tarullo (Georgetown University). See, online registration page. Location: AEI Wohlstetter Conference Center, Twelfth Floor, 1150 17th Street, NW, Washington DC.
Securities Fraud
10/11. The SEC filed a civil complaint in the U.S. District Court (SDNY) against and several individuals alleging manipulation of stock price in violation of  17(a) of the Securities Act of 1933,  10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. AF is a Seattle based software company. See, SEC release.
GAO Releases Report on Infringement by States
10/12. The GAO released a report [78 pages in PDF] titled "Intellectual Property: State Immunity in Infringement Actions." The report was prepared for Sen. Orrin Hatch (R-UT), ranking Republican on the Senate Judiciary Committee.
Fed Circuit Reverses in FFDCA Case
10/12. The U.S. Court of Appeals (FedCir) issued its opinion in Mylan Pharmaceuticals v. Thompson, reversing the District Court's preliminary injunction order in a case involving the statutory framework governing new and generic drug approvals and its mechanisms for patent enforcement.
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