| DOJ and Microsoft Reach
Settlement |
11/2. The Department of
Justice (DOJ) and Microsoft
agreed to terms of settlement of the government's antitrust
law suit against Microsoft. They released a Stipulation
and Proposed Final Judgment which prohibits Microsoft from
engaging in certain enumerated business practices, and
specifies enforcement mechanisms.
The Proposed Final Judgment (PFJ) requires Microsoft to
establish uniform licensing practices, to allow OEMs to put
icons and shortcuts on the desktop, and to disclose certain
application programming interfaces (APIs) and communications
protocols. The PFJ also bars Microsoft from preventing
original equipment manufacturers (OEMs) from distributing or
promoting non Microsoft middleware, such as browsers, and from
preventing the automatic launching of such middleware. The PFJ
also bans certain exclusive dealing, and compels the licensing
of certain Microsoft intellectual property rights (IPR).
The PFJ has a duration of five years, but can be extended. It
provides that the DOJ may continue to investigate Microsoft
via depositions, interrogatories and inspections. It also
creates a three person technical committee to monitor
Microsoft's compliance with the PFJ for the Court. The PFJ
provides that the Court retains jurisdiction, and that only
the DOJ has remedies under the PFJ.
None of the states that also sued Microsoft are yet a party to
the settlement. Also, the PFJ has yet to be approved by the
newly assigned U.S. District Court Judge, Colleen Kotelly.
Attorney General John Ashcroft stated that "A vigorously
competitive software industry is vital to our economy and
effective antitrust enforcement is crucial to preserving
competition in this constantly evolving high-tech arena. ...
This historic settlement will bring effective relief to the
market and ensure that consumers will have more choices in
meeting their computer needs." See, DOJ
release.
Microsoft Chairman and Chief Software Architect Bill Gates
said in statement
that "This agreement contains significant rules and
regulations on how we develop and license our software, but it
also allows Microsoft to keep innovating on behalf of
consumers. It goes beyond the Court of Appeals decision in
some areas, and provides for ongoing oversight by an
independent committee. We are resolved to implementing this
settlement promptly and fully, and we will put all the
necessary resources in place to ensure this." See also, MSFT
release. |
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| Summary of the Enforcement
Provisions of the Proposed Final Judgment |
11/2. The Proposed
Final Judgment (PFJ) negotiated by Microsoft and the
Justice Department also provides for enforcement of its terms.
No Third Party Rights. The PFJ creates no remedies for
states, Microsoft's competitors, or any other third parties.
It states that "The United States shall have exclusive
responsibility for enforcing this Final Judgment." See,
PFJ, § IV.A.1. It further states that "Nothing in this
Final Judgment is intended to confer upon any other persons
any rights or remedies of any nature whatsoever ..." See,
PFJ, § VIII.
Inspection, Depositions and Interrogatories. The PFJ
gives the DOJ many authorities to facilitate its enforcement
of the terms of the PFJ. It allows it "Access during
normal office hours to inspect any and all source code, books,
ledgers, accounts, correspondence, memoranda and other
documents and records in the possession, custody, or control
of Microsoft ..." It also allows the DOJ to interview
Microsoft employees either "informally or on the
record". It also requires Microsoft to respond, under
oath, to written interrogatories from the DOJ. See, PFJ, §
IV.A.2.
Further Court Proceedings. The PFJ also allows the DOJ
"to seek such orders as are necessary from the Court to
enforce this Final Judgment ..." See, PFJ, § IV.A.4.
Technical Committee. The PFJ requires the appointment
of a three person technical committee (TC), to be located at
Microsoft's Redmond campus, that will provide services to the
Court. The PFJ provides that "The TC shall have the power
and authority to monitor Microsoft's compliance with its
obligations under this final judgment." The DOJ picks one
member; Microsoft picks a second; and these two pick a third.
All are required to be unbiased experts in software design and
engineering. See, PFJ, § IV.B.
Microsoft Internal Compliance Officer. The PFJ requires
Microsoft to appoint an internal Compliance Officer with
duties enumerated in the PFJ. See, PFJ, § IV.C.
Five Year Duration. The PFJ states that "Unless
this Court grants an extension, this Final Judgment will
expire on the fifth anniversary of the date it is entered by
the Court." See, PFJ, § V. |
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| Reaction to the Microsoft
Proposed Final Judgment |
11/2. Reaction to the Proposed Final Judgment (PFJ)
negotiated by Microsoft and the Department of Justice has been
as varied as support for the underlying lawsuit. Those who
opposed the government's law suit have tended to praise the
settlement, while those who supported the law suit and favored
the break up of Microsoft condemned the settlement.
Jeffrey Eisenach of the Progress
and Freedom Foundation said in a release
that the "settlement that fails to meaningfully address
any of the court's findings. It's an embarrassment for the
Justice Department, a disservice to the law and an affront to
the DC Circuit." He also stated that "The states
should not accept this deal, and the judge should reject it,
with prejudice." Anti Microsoft groups also condemned the
PFJ. See, SIIA
release and CCIA release
and analysis.
In contrast, Robert Levy of the Cato
Institute said that settlement "means Microsoft's
billionaire rivals will have failed in their attempt to use
government to win in the political arena what they couldn't
win in the marketplace. It also means that consumers won’t
have to pick up the tab while high-tech executives devote more
resources to politicking than to the development of integrated
products. To settle the case, Microsoft will have to make more
concessions than justified by this baseless lawsuit and the
company still faces litigation from competitors, opportunistic
trial lawyers, the European Union, and perhaps even state
attorneys general who don't agree to the settlement. That's
regrettable, but at least the federal antitrust lawsuit won't
be around to sap economic growth so essential to the post WTC
recovery."
House Majority Leader Dick
Armey (R-TX) also released a statement
in which he said that "Although this issue should have
been settled long ago, today's decision is welcome. In a time
of economic distress, the court has delivered a homerun for
consumers. Businesses should not be afraid that when they
create popular products, they'll be saddled with endless
litigation. They shouldn't be second guessed by lawyers and
bureaucrats. It's the consumers who benefit when companies
spend less time in the courtroom, and more time developing new
products. I urge the state attorneys general to avoid dragging
this case out in these tough economic times. This is a case
that the government should never have brought." |
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| Trade News |
10/31. Rep. Henry Hyde
(R-IL) introduced HR 3189,
a bill to extend the Export Administration Act until April 20,
2002.
11/1. Sen. Max Baucus
(D-MT) spoke in the Senate to express his concerns about the
upcoming World Trade
Organization (WTO) meeting in Doha, Qatar. He addressed
protecting the U.S. softwood lumber and steel industries,
including environment and labor provisions, and assuring
accession of Taiwan to the WTO. See, Congressional Record,
November 1, 2001, at page S11355.
10/31. Rep. Marcy
Kaptur (D-OH) stated in the House, again, that Doha,
Qatar, is not an appropriate site for the WTO
ministerial." She cited Qatar's opposition to U.S.
actions in Afghanistan, Qatar's record on human rights, and
Qatar's treatment of women. Kaptur is also a leading
protectionist on trade issues. See, Congressional Record,
October 31, 2001, at page H7563-4.
10/31. Rep. Joe
Knollenberg (R-MI) also spoke in the House about trade and
granting the President trade promotion authority. He stated
that "we have to pass trade promotion authority now. If
we do not, we will let down America's world class workers,
farmers and businesses. The global marketplace is increasingly
competitive. Without TPA, America will lag behind. Our foreign
competitors have negotiated some 130 preferential agreements
while we, absent TPA, have negotiated exactly three. We need
to get back in the game." See, Congressional Record,
October 31, 2001, at page H7534.
11/2. The U.S. Department of State (DOS) stated that a U.S.
trade official said that a Brazilian proposal on drug patents
would undermine the WTO agreement on Trade Related Aspects of
Intellectual Property Rights (TRIPS). See, DOS
release. |
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| USPTO Encourages Fax Use
for Some Communications |
| 11/2. Nicolas Godici, acting head of the USPTO, wrote a letter
in which he stated that "we at the USPTO would like to
encourage you to communicate with the USPTO via facsimile.
Facsimile transmissions may be used for correspondence as set
forth in 37 CFR 1.6 such as: amendments, petitions for
extension of time, authorization to charge a deposit account,
an IDS, terminal disclaimers, a notice of appeal, an appeal
brief, CPAs under 37 CFR 1.53(d), and RCEs." However, the
USPTO also stated that "the Office currently does not
permit new application filings (other than a CPA under 37 CFR
1.53(d)), requests for reexamination, drawings, and certain
correspondence set forth in 37 CFR 1.6(d) by facsimile." |
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| Summary of Prohibited
Conduct Sections of the Proposed Final Judgment |
11/2. The Proposed
Final Judgment (PFJ) prohibits Microsoft from engaging in
certain business practices, and requires it to follow certain
other practices.
No Retaliation. Microsoft is prohibited from
retaliating against any original equipment manufacturer (OEM)
for developing or selling any competing software. The PFJ
states that "Microsoft shall not retaliate against an OEM
by altering Microsoft's commercial relations with that OEM ...
because it is known to Microsoft that the OEM is or is
contemplating: 1. developing, distributing, promoting, using,
selling, or licensing any software that competes with
Microsoft Platform Software or any product or service that
distributes or promotes any Non-Microsoft Middleware; 2.
shipping a Personal Computer that (a) includes both a
Windows Operating System Product and a non-Microsoft Operating
System, or (b) will boot with more than one Operating
System; or 3. exercising any of the options or alternatives
provided for under this Final Judgment." See, PFJ, §
III.A.
Uniform License Agreements. The PFJ states that
"Microsoft's provision of Windows Operating System
Products to Covered OEMs shall be pursuant to uniform license
agreements with uniform terms and conditions." See, PFJ,
§ III.B.
No Restriction on Desktop Icons and Shortcuts. The PFJ
states that "Microsoft shall not restrict by agreement
any OEM licensee from exercising any of the following options
or alternatives: 1. Installing, and displaying icons,
shortcuts, or menu entries for, any Non-Microsoft Middleware
or any product or service ... that distributes, uses,
promotes, or supports any Non-Microsoft Middleware, on the
desktop or Start menu, or anywhere else ..." See, PFJ, §
III.C.1.
Middleware. The PFJ bars Microsoft from preventing OEMs
from distributing or promoting non Microsoft middleware, such
as browsers, Java Virtual Machine, media players, messaging
software, and e-mail software. See, PFJ, § III.C.2. The PFJ
also bars Microsoft from restricting OEMs from "Launching
automatically, at the conclusion of the initial boot sequence
or subsequent boot sequences, or upon connections to or
disconnections from the Internet, any Non-Microsoft Middleware
..." See, PFJ, § III.C.3.
Disclosure of APIs and Communications Protocols. The
PFJ contains provisions designed to give independent software
vendors (ISVs) and others the opportunity to develop products
that compete with Microsoft's middleware products. These
provisions require the disclosure of application programming
interfaces (APIs) and communications protocols.
The PFJ requires Microsoft to disclose "for the sole
purpose of interoperating with a Windows Operating System
Product, via the Microsoft Developer Network
("MSDN") or similar mechanisms, the APIs and related
Documentation that are used by Microsoft Middleware to
interoperate with a Windows Operating System Product."
See, PFJ, § III.D.
Moreover, the PFJ requires Microsoft to "make available
for use by third parties, for the sole purpose of
interoperating with a Windows Operating System Product, on
reasonable and non-discriminatory terms ..., any
Communications Protocol that is, on or after the date this
Final Judgment is submitted to the Court, (i) implemented
in a Windows Operating System Product installed on a client
computer, and (ii) used to interoperate natively (i.e.,
without the addition of software code to the client or server
operating system products) with Windows 2000 Server or
products marketed as its successors installed on a server
computer." (Parentheses in original.) See, PFJ, § III.E.
However, the PFJ also limits disclosure by Microsoft. It
states that Microsoft is not required to disclose
"portions of APIs or Documentation or portions or layers
of Communications Protocols the disclosure of which would
compromise the security of anti-piracy, anti-virus, software
licensing, digital rights management, encryption or
authentication systems, including without limitation, keys,
authorization tokens or enforcement criteria." See, PFJ,
§ III.J.1.
No Exclusive Agreements. The PFJ prohibits Microsoft
from entering into agreements requiring the exclusive support
or development of certain Microsoft software. It provides,
subject to certain exceptions, that "Microsoft shall not
enter into any agreement ... on the condition that such entity
distributes, promotes, uses, or supports, exclusively or in a
fixed percentage, any Microsoft Platform Software ..."
See, PFJ, § III.G.
Compulsory Licensing of IPR. The PFJ requires Microsoft
to license intellectual property rights (IPR) to ISVs and
others "that are required to exercise any of the options
or alternatives expressly provided to them under this Final
Judgment, provided that 1. all terms, including royalties or
other payment of monetary consideration, are reasonable and
non-discriminatory; 2. the scope of any such license (and the
intellectual property rights licensed thereunder) need be no
broader than is necessary ... 3. ... rights may be conditioned
on its not assigning, transferring or sublicensing its rights
under any license granted under this provision ..."
(Parentheses in original.) See, PFJ, § III.I. |
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| Surveillance of Cable
Subscribers Under the Anti Terrorism Bill |
10/31. Rep. Billy
Tauzin (R-LA), Chairman of the House Commerce Committee,
submitted a statement for the Congressional Record regarding
the meaning and intent of Section 211 of HR 3162,
the anti terrorism bill, which President Bush signed into law
on October 26.
Section 211 of the anti terrorism act amends Section 631 of
the Communications Act of 1934 (47 U.S.C.
§ 551), which prohibits cable companies from disclosing
certain customer information. Section 211 was included in the
bill to clarify that laws regarding interception and
disclosure of wire and electronic communications apply to
cable service providers when they provide telephony or
Internet access services. Without this new provision,
terrorists and other criminals could have avoided surveillance
by obtaining telephone service from cable operators. However,
this section still excepts "records revealing cable
subscriber selection of video programming from a cable
operator."
Rep. Tauzin's statement articulates this purpose. However, he
offers further information about the underlying intent of the
Congress. For example, he states that under Section 211 the
government can obtain a "cable subscriber's name,
address, or the means of payment" but not what programs
he watched. Second, he stated that the privacy protection for
cable video programming does not extend to "streaming of
content over the Internet".
Rep. Tauzin stated that section 211 "clarifies that cable
television subscribers continue to enjoy certain privacy
protections, while also ensuring that law enforcement
officials have the same ability to gain access to cable
subscriber Internet and telephony information as they do with
conventional telephone service. The drafters of this language
intend the phrase 'records revealing cable subscriber
selection of video programming from a cable operator' to mean
information about which video programming service or services
a cable subscriber has purchased from a cable company. It does
not include information such as a cable subscriber's name,
address, or the means of payment. Importantly, this language
does not impose any new requirements on cable companies to
maintain or collect additional records containing subscriber
information."
Rep. Tauzin continued that " 'Video programming' is
intended to refer to traditional video programming services
comparable to broadcast television ... as opposed to the
emerging types of video programming services that enable
subscribers to communicate with other viewers or subscribers.
Nor does 'video programming' include streaming of content over
the Internet."
Rep. Tauzin also stated that "to the extent a cable
company enables its subscribers to communicate with other
persons through the provision of telephone service or Internet
access service, it must comply with the same laws, found in
title 18, governing the interception and disclosure of wire
and electronic communications that apply to any other
telephone company or Internet service provider. In these
instances, Section 631 simply would not apply." See,
Congressional Record, October 31, 2001, at page E1969. |
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| About Tech Law Journal |
Tech Law Journal is a free access web site and e-mail alert
that provides news, records, and analysis of legislation,
litigation, and regulation affecting the computer and Internet
industry. This e-mail service is offered free of charge to
anyone who requests it. Just provide TLJ an e-mail address.
Number of subscribers: 2,244.
Contact: 202-364-8882; E-mail.
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Privacy
Policy
Notices
& Disclaimers
Copyright 1998 - 2001 David Carney, dba Tech Law Journal. All
rights reserved. |
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| Letter from the Publisher |
| Starting on January 1, 2002, the Tech Law Journal Daily
E-Mail Alert will be a subscription based service. All persons
who have already subscribed, or who subscribe before December
31, 2001, will be kept on the subscription list until December
31, 2001. The basic rate for a subscription is $250 per year.
However, there are discounts for entities with multiple
subscribers. Free one month trial subscriptions will be
available. Also, free subscriptions will be provided for law
students, journalists, elected officials, and employees of the
Congress, courts, executive branch, and state government. The
TLJ web site will remain a free access web site. No hyperlinks
will be broken. However, copies of the TLJ Daily E-Mail Alert
and news items will not be published in the web site until
after a one month delay. See, subscription
information page.
David Carney
Publisher
Tech Law Journal
202-364-8882
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| Rogan to Get Confirmation
Hearing |
11/1. James
Rogan, President Bush's nominee to head the USPTO, is
finally scheduled to receive a confirmation hearing before the
Senate Judiciary
Committee. The Senate Republican High Tech Task Force sent
a letter last week to Sen.
Patrick Leahy (D-VT), Chairman of the Committee, seeking
prompt consideration of this nomination. See, HTTF
release.
Rogan, a Republican, was a member of the House Judiciary
Committee, and its Courts and Intellectual Property
Subcommittee, until he was defeated in the 2000 general
election. He is also considered to be a potential candidate
for statewide office in California. Confirmation for this post
could take him out of contention for statewide office. Sen. Dianne Feinstein
(D-CA) will preside at his confirmation hearing at 10:00 AM on
November 7. |
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| Monday, Nov 5 |
The House will meet at 2:00 PM in pro forma session only.
The Senate will meet at 3:00 PM; it will likely meet in
executive session to consider the nomination of Larry Hicks to
be a U.S. District Court Judge.
? 9:00 AM. Status conference in USA v. Microsoft before Judge
Colleen Kotelly. See, Scheduling
Order [PDF] of September 28. Location: Courtroom 11.
9:30 AM. The U.S.
Court of Appeals for the District of Columbia Circuit will
hear oral argument in Teledesic v. FCC, No. 00-1466.
Judges Edwards, Williams and Randolph will preside. Location:
333 Constitution Ave., NW, Washington DC.
10:00 AM. The FCC's
Technological Advisory Council will hold a meeting. See, notice
in Federal Register, October 5, 2001, Vol. 66, No. 194, at
pages 51046 - 51047. Location: FCC, 445 12th St., SW., Room
TW-C305, Washington DC.
9:30 AM - 5:30 PM. Day one of a three day conference and
exhibition hosted by the NIST
and NISO titled "4th
annual Electronic Book Conference". See, Nov.
5 agenda. The price to attend is $400. See, registration
page. Location: Ronald Reagan Building, 1300 Pennsylvania
Ave., NW, Washington DC. |
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| Tuesday, Nov 6 |
The 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. The Senate will likely resume
its consideration of HR 3061, the Labor HHS appropriations
bill.
9:30 AM - 5:30 PM. Day two of a three day conference and
exhibition hosted by the NIST
and NISO titled "4th
annual Electronic Book Conference". The price to attend
is $400. See, registration
page. Location: Ronald Reagan Building, 1300 Pennsylvania
Ave., NW, Washington DC. See, Nov.
6 agenda.
12:30 PM. The Federal
Communications Bar Association's (FCBA) State and Local
Practice Committee will host a brown bag luncheon on "OTARD"
and status of BOMA v. FCC. The speakers will be Matthew Ames (Miller & Van Eaton),
James Barker (Latham &
Watkins), and Jeffrey Steinberg (FCC's Wireless Telecom. Bureau).
RSVP to Mitsi
Herrera. Location: Wiley
Rein & Fielding, 1750 K Street, NW, Washington DC. |
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| Wednesday, Nov 7 |
9:30 AM - 5:30 PM. Day three of a three day conference and
exhibition hosted by the NIST
and NISO titled "4th
annual Electronic Book Conference". The price to attend
is $400. See, registration
page. Location: Ronald Reagan Building, 1300 Pennsylvania
Ave., NW, Washington DC. See, Nov.
6 agenda.
10:00 AM. The House
Commerce Committee's Subcommittee on Commerce, Trade and
Consumer Protection will hold a hearing titled Challenges
Facing the Federal Trade Commission. FTC Chairman Timothy
Muris will be the only witness. Location: Room 2123,
Rayburn Building.
10:00 AM. The Senate
Judiciary Committee has scheduled a hearing on pending
nominations. Panel I will be five nominees to be U.S. District
Court Judges: Joe Heaton (WD Oklahoma), Clay Land (MD
Georgia), Frederick Martone (Arizona), Danny Reeves (ED
Kentucky), and Julie Robinson (Kansas). Panel II will be James Rogan, the
nominee to be Director of the U.S.
Patent and Trademark Office (USPTO). Sen. Dianne Feinstein
(D-CA) will preside. Location: Room 226, Dirksen Building.
10:00 AM. The U.S.
International Trade Commission (USITC) will begin a Section 337 evidentiary
hearing regarding the importation of integrated circuits. The
complainants are United Microelectronics, UMC Group (USA), and
United Foundry Service. The respondents are Silicon Integrated
Systems and Silicon Integrated Systems. This investigation
pertains to U.S. Patents No. 5,559,352 and 6,117,345. See, Investigation
No. 337-TA-450. ALJ Sidney Harris will preside. Location:
Courtroom A, ITC Building, 500 E Street SW, Washington DC.
12:15 PM. The Federal
Communications Bar Association's (FCBA) Online
Communications Committee will host a brown bag lunch titled
"Broadband, When? -- the View from Earthlink". The
speaker will be Dave Baker, VP of Law & Public Policy at
Earthlink. RSVP to Scott
Harris at sharris@
harriswiltshire.com. Location: Lampert & O'Connor, 5th
Floor, 1750 K St., NW, Washington DC. |
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| Thursday, Nov 8 |
9:30 AM. The Federal
Communications Commission (FCC) will hold a meeting to
consider five items: (1) a Report and Order concerning
reexamination the Commercial Mobile Radio Services (CMRS) spectrum
aggregation limits and the cellular cross interest rule
(WT Docket No. 01-14); (2) a Notice of Proposed Rule Making (NPRM)
concerning whether to undertake a comprehensive examination of
its rules and policies of local radio ownership (MM Docket No.
00-244); (3) a Memorandum Opinion and Order on Reconsideration
concerning its periodic review of the progress of the
conversion to digital television (MM Docket No. 00-39); (4) a
NPRM concerning the establishment of national performance
measurements and standards for unbundled network elements and
interconnection (CC Docket Nos. 98-56, 98-147, 98-147, 96-98,
and 98-141); and a Report and Order concerning its policies,
rules and requirements for Cable Landing Licenses (IB Docket
No. 00-106). See, FCC
notice. Location: Commission Meeting Room, FCC, 445 12th
Street, SW, Washington DC.
10:00 AM. The House Financial
Services Committee's Oversight and Investigations
Subcommittee and the House
Ways and Means Committee's Social Security Subcommittee
will hold a joint hearing titled Preventing Identity Theft
by Terrorists and Criminals. Location: Room 2128, Rayburn
Building.
12:15 PM. The Federal
Communications Bar Association's (FCBA) Global Telecom
Development Committee will host a brown bag luncheon titled Telco
Privatization: the Role of International Financial
Institutions. The speakers will be David Satola (World
Bank Group) and Janet Hernandez (Coudert Bros.). RSVP to Kent Bressie.
Location: Wilkinson Barker
& Knauer, 2300 N Street, Suite 700, Washington DC. |
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| NIPC Issues Advisory re
DDoS Attacks |
10/2. The FBI's National
Infrastructure Protection Center (NIPC) issued Advisory
01-026 regarding politically motivated cyber attacks, and
distributed denial of service (DDoS) attacks. It stated that
"Cyber protests and hacktivist activity have increased
since Advisory
01-021 was issued and the potential for targeting U.S.
organizations is higher than in September. In the aftermath of
the 11 September attacks, hacking groups have formed and
participated in pro-U.S. and anti-U.S. cyber activities,
fought mainly through web defacements. There has been minimal
activity in the form of DDoS attacks, mostly between opposing
protesting groups."
However, the Advisory continues that the "NIPC has reason
to believe that the potential for future DDoS attacks is high.
The protesters have indicated they are targeting web sites of
the U.S. Department of Defense and organizations that support
the critical infrastructure of the United States, but many
businesses and other organizations -- some completely
unrelated to the events -- have been victims. In the current
situation, infrastructure support systems must take a
defensive posture and remain vigilant at a higher state of
alert. System administrators are encouraged to check their
systems for zombie agent software and ensure they institute
best practices such as ingress and egress filtering." |
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