Tech Law Journal Daily E-Mail Alert
November 21, 2001, 9:00 AM ET, Alert No. 313.
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Microsoft Settles Private Overpricing Antitrust Class Actions
11/20. Microsoft announced that it settled over 100 private antitrust class action lawsuits against it alleging that it overpriced its products. Microsoft also stated that the parties would file a Settlement Agreement with the U.S. District Court (DMD). See, MSFT release and statement by Microsoft CEO Steve Ballmer.
The District Court, Judge Frederick Motz presiding, has scheduled a hearing on this proposed settlement for Tuesday, November 27. This settlement does not affect the ongoing government antitrust litigation against Microsoft; nine states have not yet joined in the settlement announced earlier this month. Also, plaintiffs' attorneys in state court actions alleging overpricing that are pending in California will likely object to this settlement.
Microsoft stated that "Under the proposed settlement, Microsoft will provide more than $1 billion in cash, training, support and software to help make computer technology more accessible to public schools serving nearly 7 million of America's most economically disadvantaged children. Details of the five year education program are outlined in a Settlement Agreement signed by the parties on Monday, which will be filed with the Federal District Court of Maryland later today. The program, if accepted by the Court, will provide cash, computer hardware, software, technical assistance and training to over 12,500 schools and more than 400,000 teachers who work in those schools."
The terms of the proposed settlement also provide that the plaintiffs' attorneys will receive reasonable attorneys fees in an amount to be determined by the Court.
Microsoft also announced that it will record a pre-tax charge of approximately $550 million in the quarter ending December 31, 2001, resulting from the settlement of more than 100 class action lawsuits." See, MSFT release.
FTC Settles Case Against Deceptive Web Operation
11/20. The FTC announced settlement of a case that it brought in May against the operators of a web business that deceived consumers. Defendants falsely claimed that would pay Internet access fees for consumers who paid membership fees and divulged their personal and financial information. See, FTC release. Under the terms of the Stipulated Final Judgment, defendants are barred from making future misrepresentations to consumers, and from using, disclosing, or selling any of the personally identifying information that they collected. They are also required to destroy the data.
On May 23, 2001, the FTC filed a complaint in U.S. District Court (NDIll) against New Millennium Concepts, Inc., dba rhinoPoint, and its principal, Karl Kay, alleging deceptive acts or practices in violation of  5(a) of the Federal Trade Commission Act, 15 U.S.C.  45(a).
The complaint alleged that defendant falsely represented that consumers who signed up as members of, by paying an initial setup fee and disclosing personal information on the member profile form, would receive monthly marketing surveys and would be reimbursed for their monthly Internet access charges after completing the monthly surveys. The complaint further alleged that the defendant collected about $500,000 in set-up fees and obtained consumers' personal information, but did not follow up with marketing surveys or pay Internet access fees for most of the consumers.
E-911Phase II Petitions for Reconsideration
11/20. On November 13, Cingular Wireless, Nextel, and Verizon Wireless filed petitions seeking reconsideration of certain provisions of the FCC's October 12 orders addressing and conditionally approving requests for waivers and approval of revised deployment plans for wireless Enhanced 911 services. On November 20, the FCC issued a notice that set deadlines for comments on these petitions for reconsideration. Oppositions and comments are by December 19, 2001; reply comments are due by January 4, 2002.
See, November 13 petitions for reconsidertion: Cingular's petition [PDF], Nextel's petition [PDF], and Verizon's petition [PDF]. See also, FCC release summarizing the orders released on October 12, and the October 12 orders: FCC 01-294 Order, FCC 01-295 Order, FCC 01-296 Order, FCC 01-297 Order, and FCC 01-299 Order. (CC Docket No. 94-102.)
More on FTC DOJ Hearings on Antitrust and IPR
11/20. On November 15 the Antitrust Division of the Department of Justice and the FTC announced that they will jointly hold a hearing on antitrust and intellectual property. On November 20, the FTC published a notice in the Federal Register regarding this hearing. It states that "The hearings will begin in January 2002 and will conclude later in the spring. Specific dates and more specific topic listings will be provided in a later notice and in press releases. Any interested person may submit written comments responsive to any of the topics to be addressed; such comments should be submitted no later than the last session of the hearings." The notice also states that "The hearings will focus primarily on the implications of antitrust and patent law and policy for innovation and other aspects of consumer welfare. Copyright and trademark issues as they arise in particular high-tech contexts also may be considered." See, Federal Register, November 20, 2001, Vol. 66, No. 224, at Pages 58146 - 58147.
NMPA Sues P2P Music Services for Copyright Infringement
11/19. Several songwriters and music publishers filed a complaint [PDF] in U.S. District Court (CDCal) against MusicCity (provider of Morpheus), Consumer Empowerment BV (aka FastTrack), and Grokster alleging contributory and vicarious copyright infringement in connection with their operation of peer to peer music copying services.
The complaint alleges that "Defendants provide users with an enhanced peer to peer service for infringing copyrighted musical compositions. Like Napster, defendants provide their respective users with the infrastructure, facilities, technological means, and ongoing support and services to infringe copyrighted musical compositions. Defendants participate in, facilitate, materially contribute to, and encourage these infringements from start to finish. Their services are extensive, highly integrated closed systems that anonymously connect users and encourage and enable them to pool their previously private music files into what is effectively a massive database of millions of such files so that they can all make free copies. To shield this pirate's haven, defendants have made their services anonymous and have employed encryption technology." See, Complaint, at 24. D.C. No. 01-09923 GAF(SHx).
Count one alleges contributory copyright infringement in violation of 17 U.S.C. 106, 115, and 501. Count two allege vicarious copyright infringement in violation of the same sections. Plaintiffs seek statutory damages in the amount of $150,000 with respect to each work infringed; plaintiffs also seek preliminary and permanent injunctive relief. Plaintiffs seek class action status to represent all music publishers represented by the Harry Fox Agency.
The plaintiffs, who are members of the National Music Publishers Association (NMPA), are Jerry Leiber, Mike Stoller, Famous Music, Peer International Corporation, and Criterion Music. They are represented by the law firms of Paul Weiss and Davis Wright & Tremaine.
Songwriter Stoller said in an NMPA release that "This lawsuit seeks to preserve the important principles that the courts recognized in our case against Napster -- that commercial businesses have a legal obligation to compensate songwriters for the use of their creative works, irrespective of the technology they use to do so. When millions of people use the Morpheus service, they are doing so not because they think the technology is 'cool.' They are using it because they can get our songs without paying for them. This has got to stop."
Copyright Office Requests Comments in Rate Proceedings
11/20. The Copyright Office (CO) published a notice in the Federal Register regarding its digital performance right in sound recordings rate adjustment proceedings. It contains a notice of inquiry and request for notices of intention to participate. The notice states that the CO "is requesting comments as to whether the rate adjustment proceeding to determine reasonable rates and terms for the public performance of sound recordings by new subscription services should be consolidated with the rate adjustment proceeding to determine reasonable rates and terms for the public performance of sound recordings by pre-existing satellite digital audio radio services and pre-existing subscription services." Comments and Notices of Intent to Participate are due no later than December 20, 2001. Reply comments are due no later than January 22, 2002. See, Federal Register, November 20, 2001, Vol. 66, No. 224, at Pages 58180 - 58181.
11/20. The Copyright Office published notice in the Federal Register regarding the distribution of 1998 and 1999 cable royalty funds. The notice requests public comments. It states that the CO "is announcing the schedule for a Phase I CARP proceeding to distribute 1998 cable royalty funds collected under section 111, 17 U.S.C. In addition, the Office is seeking comment as to the advisability of consolidating the 1998 Phase I distribution proceeding with the Phase I distribution proceeding for the 1999 cable royalty funds." Comments on consolidation are due no later than December 20, 2001. See, Federal Register, November 20, 2001, Vol. 66, No. 224, at Page 58179 -58180.
Express Mail Deliveries to USPTO
11/20. The USPTO issued a notice regarding express mail deliveries to the USPTO. On Friday, November 16, 2001, the USPS issued a memorandum stating that it is temporarily and immediately suspending Express Mail service to Washington DC, ZIP Codes 202xx through 205xx (e.g., 20231).
The USPTO stated that it "is designating this interruption in the Express Mail service of the USPS as a postal service interruption within the meaning of 35 U.S.C. 21(a) and 37 CFR 1.6(e). The USPTO is establishing the following address which may be used (as an alternative to the address set out in 37 CFR 1.1) on an emergency basis for patent-related correspondence being delivered to the USPTO by the USPS's Express Mail service: U.S. Patent and Trademark Office, P.O. Box 2327, Arlington, VA 22202."
USPTO Puts PDF Fillable Forms Online
11/20. The USPTO announced that the first set of ten patent forms are available in its web site in PDF fillable format. See, USPTO Forms page. See also, USPTO release.
Thanksgiving Schedule
The Tech Law Journal Daily E-Mail Alert will not be published on Thursday, November 22, or Friday, November 23.
Wednesday, Nov 21
The Senate and House are in recess for Thanksgiving.
2:00 - 5:00 PM. The National Science Foundation's (NSF) Advisory Committee for Cyber Infrastructure will hold a meeting to develop a plan for the preparation of a report to the NSF concerning advanced cyber infrastructure and the evaluation of the existing Partnerships for Advanced Computational Infrastructure. See, notice in Federal Register. Location: Room 130, NSF, 4201 Wilson Blvd., Arlington, VA.
Thursday, Nov 22
Thanksgiving day. The Tech Law Journal Daily E-Mail Alert will not be published.
Friday, Nov 23
The Senate and Senate are in recess for Thanksgiving. The Tech Law Journal Daily E-Mail Alert will not be published.
Monday, Nov 26
The Senate and House are in recess for Thanksgiving.
Tuesday, Nov 27
The Senate reconvenes from its Thanksgiving recess at 10:30 AM.
The House reconvenes at 2:00 PM. There will be no votes before 6:30 PM.
1:30 PM. The U.S. International Telecommunication Advisory Committee (ITAC) will hold a meeting. See, notice in Federal Register. Location: State Department.
6:00 - 8:15 PM. The Federal Communications Bar Association (FCBA) will host as CLE seminar titled "The Economics of FCC Decisionmaking." From 6:00 to 7:00 PM David Sappington (FCC Chief Economist) will speak on "Economic Principles of Telecommunications Regulation." From 7:15 to 8:15 PM there will be a panel discussion titled "Economists Roundtable: Of Caps, Limits, and the Free Market." The speakers will be Robert Pepper (Chief of the FCC's Office of Plans and Policy), Jim Bird (head of the FCC's antitrust merger review office), Walt Strack (Chief Economist in the FCC's Wireless Bureau), and Jonathan Levy (Deputy Chief of the FCC's Office of Plans and Policy). RSVP to Location: Dow Lohnes & Albertson, 1200 New Hampshire Ave., NW, Suite 800.
Illegal Export of Computers to Libya and Syria
11/20. The Bureau of Export Administration (BXA) published a notice in the Federal Register that it has affirmed an injunction against Tetrabal Corp. and Ihsan Medhat Elashi in connection with the export of computer products to Libya and Syria in violation of the Export Administration Regulations (EAR).
The notice contains a BXA order of November 10 affirming the Administrative Law Judge's (ALJ) November 2 Recommended Decision and Order regarding Tetrabal Corporation, Inc., and Ihsan Medhat Elashi, and denying the appeals of Tetrabal and Elashi.
Tetrabal Corp. and Elashi are related to Infocom. On September 6, the BXA enjoined Infocom, its officers, and others, from selling computer equipment to Libya and Syria in violation of the Export Administration Regulations (EAR). See, Federal Register, November 20, 2001, Vol. 66, No. 224, at Pages 58112 - 58115.
RFK DOJ Building
11/20. President Bush issued a Memorandum directing that the main Department of Justice building in Washington DC be named the "Robert F. Kennedy Department of Justice Building". See also, statement by President Bush at dedication ceremony and DOJ release.
People and Appointments
1/20. David Fiske was named Director of the FCC's Office of Media Relations. He has been acting Director of the office since January. He has worked at the FCC since 1995. He previously was a reporter for Warren Publications. He has also worked on Capitol Hill and for CBS. See, FCC release.
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