Tech Law Journal Daily E-Mail Alert
December 11, 2001, 9:00 AM ET, Alert No. 325.
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Divided Court Upholds Injunction Against Spamming by Ex Intel Employee
12/10. The California Court of Appeal (3) issued its opinion [PDF] in Intel v. Hamidi, an appeal of an injunction issued against a former Intel employee barring him from sending unsolicited e-mail to addresses on Intel's computer systems. The injunction was based upon California tort law pertaining to trespass to chattels. A divided Court of Appeal panel affirmed the injunction.
Background. Intel fired Hamidi. He is an angry ex-employee with a talent for spamming. He and another defendant (FACE Intel, which defaulted) obtained Intel's e-mail address list and on six occasions sent e-mail to up to 29,000 employees. Intel was unable to block this e-mail.
Superior Court. Intel filed a complaint in the Superior Court of Sacramento County, California, against Hamidi and another party alleging nuisance and trespass to chattels. The District Court granted summary judgment to Intel on the trespass to chattels claim, and granted it an injunction which states that "defendants, their agents ... are hereby permanently restrained and enjoined from sending unsolicited e-mail to addresses on INTEL's computer systems."
Court of Appeal. A divided three judge panel of the Court of Appeal affirmed the injunction. Justice Fred Morrison wrote the opinion of the Court, in which Arthur Scotland joined. Daniel Kolkey wrote a dissent (beginning at page 35).
Trespass to Chattels. Relying on Prosser, the Restatement 2d Torts, and case law, the Court stated that trespass to chattels occurs when one intentionally intermeddles with another's chattel where the intermeddling is harmful to the possessor's materially valuable interest in the physical condition, quality, or value of the chattel. The Court also held that "demonstrating harm is not necessary" when damages are not sought. The Court added that Intel "showed it was hurt by the loss of productivity caused by the thousands of employees distracted from their work and by the time its security department spent trying to halt the distractions after Hamidi refused to respect Intel's request to stop invading its internal, proprietary e-mail system by sending unwanted emails to thousands of Intel's employees on the system." The Court concluded that Intel "showed he was disrupting its business by using its property and therefore is entitled to injunctive relief based on a theory of trespass to chattels."
Trespass to Chattels in Cyberspace. The Court noted that while trespass to chattels has been a rarely invoked legal theory, it has enjoyed a revival with the development of cyberspace. Citing several recent cases, the Court wrote that sending electronic mail can constitute trespass to chattels. See, for example, CompuServe v. Cyber Promotions (S.D. Ohio 1997) 962 F.Supp. 1015; Hotmail Corporation v. Van$ Money Pie (N.D.Cal. 1998); America Online v. IMS (E.D.Va. 1998) 24 F.Supp.2d 548; and eBay Inc. v. Bidder's Edge, Inc. (N.D.Cal. 2000) 100 F.Supp.2d 1058.
Free Speech. Hamidi, and two amicus curiae parties, also argued that the injunction violates federal First Amendment and California Constitution free speech rights. The Court held that the First Amendment is not implicated, because there was no state action; this is a dispute between private parties. Moreover, the Court wrote, "Judicial enforcement of neutral trespass laws has been held not to constitute state action." Also, the Court rejected a public forum argument. It wrote that "Private e-mail servers differ from the Internet; they are not traditional public forums. ... The Intel e-mail system is private property used for business purposes. Intel's system is not transformed into a public forum merely because it permits some personal use by employees."
Dissent. Judge Kolkey dissented on the issue of trespass to chattels. He wrote that "While common law doctrines do evolve to adapt to new circumstances, it is not too much to ask that trespass to chattel continue to require some injury to the chattel (or at least to the possessory interest in the chattel) in order to maintain the action." He distinguished the other spam trespass to chattel cases on the basis that in those cases the spammers "burdened the computer equipment, thereby interfering with its operation and diminishing the chattel's value".
First Circuit Rules on Advertising Injuries and IPR Claims
12/10. The U.S. Court of Appeals (1stCir) issued its opinion in Ekco v. Travellers Indemnity, a case regarding whether an insurance policy covering advertising injuries applies to suits for trade dress infringement and patent infringement. The Appeals Court held that there is no coverage in this case.
Background. Ekco sells kitchen products, including metal tea kettles. Chantal Cookware, which also makes tea kettles, alleged that Ekco copied one of its tea kettles. Chantal filed a complaint in another action in U.S. District Court (SDTex) against Ekco alleging trade dress infringement and unfair competition under both the Lanham Act, 15 U.S.C. 1125(a), and state law, and for infringement of a design patent covering a Chantal tea kettle, pursuant to 35 U.S.C. 271. Travellers Indemnity had issued an insurance policy to Ekco. Ekco asserted that Travellers had a duty to defend an indemnify it in the Chantal proceeding, pursuant to the policy's advertising injury provisions. Travellers refused.
Insurance Policy. The policy provides coverage for "Advertising injury", which it defines as "injury arising out of one or more of the following offenses: a. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; b. Oral or written publication of material that violates a person's right of privacy; c. Misappropriation of advertising ideas or style of doing business; or d. Infringement of copyright, title or slogan."
District Court. Ekco filed the a complaint in the present action in New Hampshire state court. Travellers removed the case to U.S. District Court (DNH), based upon diversity. On cross motions for summary judgment, the District Court ruled in favor of EKCO -- that there was coverage. This appeal followed.
Appeals Court. The First Circuit, construing the meaning of the term "advertising", held that there was not coverage, and reversed and remanded.
Bush Administration to Raise MTOPS Threshold for HPC Exports
12/10. The State Department issued a release in which it stated that the "Bush administration intends to raise sharply the threshold for exports of advanced computers to a group of more than 40 countries including Russia, China, India, Pakistan and Israel". It also stated that "the threshold for export without a license to the group called Tier 3 countries will rise to cover computers capable of 190,000 million theoretical operations per second (MTOPs), up from 85,000 MTOPs now."
Supreme Court Rules Utility Patents May Be Issued for Plants
12/10. The Supreme Court issued its opinion [PDF] in JEM AG Supply v. Pioneer Hi-Bred, a case involving patents in plants. Justice Clarence Thomas, writing for a six justice majority, wrote that utility patents may be issued for plants pursuant to 35 U.S.C. 101; hence, the Plant Variety Protection Act, 7 U.S.C. 2321 et seq., and the Plant Patent Act of 1930, 35 U. S. C. 161-164, are not the exclusive means of obtaining a federal statutory right to exclude others from reproducing, selling, or using plants or plant varieties.
Supreme Court Denies Cert in PSLRA Case
12/10. The Supreme Court denied certiorari in Scholastic Corp. v. Truncellito, a case regarding pleading standards in class action securities suits under the Private Securities Litigation Reform Act (PSLRA). See, December 10 Order List at page 6 (No. 01-397). See also, opinion of the U.S. Court of Appeals (2ndCir).
Bills Introduced
12/6. Rep. Peter Defazio (D-OR) introduced HR 3422, a bill to establish a Congressional Trade Office. It was referred to the House Ways and Means Committee.
12/10. Rep. Marty Meehan (D-MA) introduced HR ___, the "Tobacco Free Internet for Kids Act", a bill to prohibit the Internet sale of tobacco products to minors. He also introduced a similar bill, HR 2914, in the 106th Congress. That bill was referred to the House Commerce Committee, but never received a hearing or a vote. See, Meehan release.
12/6. Sen. Joe Biden (D-DE) and Sen. Jesse Helms (R-NC) introduced S 1779, a bill to authorize the establishment of Radio Free Afghanistan. It was referred to the Senate Committee on Foreign Relations.
People and Appointments
12/7. On Thursday, December 6, the Senate confirmed Susan Bies and Mark Olson to be members of the Board of Governors of the Federal Reserve System. On Friday, December 7, they were sworn in to office. See, FRB release.
11/26. Jeffrey Blattner joined the Washington DC office of the law firm of Hogan & Hartson as a partner the firm's Antitrust, Competition and Consumer Protection and Legislative Groups. He was previously a Deputy Assistant Attorney General and Special Counsel for Information Technology in the Antitrust Division of the Department of Justice. He worked on the Microsoft litigation. He is also a former long time staff assistant to Sen. Ted Kennedy (D-MA); he was one of the architects of the Senate rejection of Robert Bork's nomination to be a Supreme Court Justice. See, H&H release.
12/6. Rob Stoddard will join the National Cable & Telecommunications Association (NCTA) as SVP for Communications and Public Affairs, effective January 2, 2002. He is currently SVP for Public Relations at AT&T Broadband. See, NCTA release.
12/6. The law firm of Fulbright & Jaworski announced new partners, effective January 1, 2002. The list includes Lucas Elliot, who focuses on general commercial and complex tort litigation, with a concentration on information technology and telecommunications litigation. See, F&J release.
12/3. The law firm of Arnold & Porter announced new partners, effective January 1. The list includes Scott Feira (a member of the telecommunications and corporate and securities groups), Myles Hansen (antitrust), and Frank Liss (antitrust). See, AP release.
12/3. The law firm of Baker & Botts announced new partners, effective January 1, 2002. The list includes Terry Stalford, who was named a partner in the Intellectual Property group in the Dallas office. He focuses on digital circuitry, integrated circuit fabrication methods, devices, materials and packaging, mass storage device design and fabrication, switching and transmission equipment, SONET, ATM, IP, and other communication protocols, and system level applications including advanced intelligence systems and services. He also focuses on software for automated calling systems, data storage and retrieval systems, and automated information routing and tracking systems. The list also includes Roger Fulghum, who was named a partner in the Intellectual Property group in the Houston office. He focuses on preparation and prosecution of patent applications, the preparation of software licenses, and involvement in patent and trade secret litigation. See, B&B release.
12/3. Michael Schlesinger joined the Washington DC office of the law firm of Latham & Watkins as a partner in its Corporate Department. He focuses on venture capital and technology. He was previously at partner at the Venable law firm. See, L&W release.
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Tuesday, Dec 11
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 6:30 PM. The House will consider a number of measures under suspension of the rules.
The Senate will meet at 9:30 AM. It will resume consideration of S 1731, the Agriculture, Conservation, and Rural Enhancement Act of 2001 (aka Farm Bill). It will also vote on a few judicial nominees.
Day one of a two day conference hosted by the Information Technology Association of America (ITAA) titled Developing Cyber Security Solutions in the e-Gov Era. This is an invitation only event. For information, contact Shannon Kellogg at skellogg @itaa.org. The press contact is bcohen@itaa.org. See, agenda. Location: Executive Briefing Center, Computer Sciences Corporation, 3170 Fairview Park Drive, Falls Church, VA.
11:45 AM - 12:45 PM. Ken Feree, Chief of the FCC's Cable Services Bureau, will be the luncheon speaker at the Power Line Communications Conference. Location: Troutman Sanders, Washington DC.
12:00 NOON. The E Voter Institute will hold a press conference. For more information, contact Karen Jagoda at 202 338-2430. Location: Murrow Room, National Press Club, 529 14th St. NW, 13th Floor.
POSTPONED TO DEC 18. 12:15 PM. The FCBA's Young Lawyers Committee will host a brown bag lunch. The speakers will be Commissioner Michael Copps' Legal Advisors: Jordan Goldstein, Paul Margie, and Susanna Zwerling.
3:00 PM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing for on the proposed settlement between the U.S. and Nextwave over spectrum licenses. The witnesses will be FCC Chairman Michael Powell, Joseph Hunt (USDOJ), Denny Strigl (Verizon Wireless), Frank Cassou (NextWave), and Jim Winston (Urban Communicators). Location: Room 2123, Rayburn Building.
Wednesday, Dec 12
9:00 AM. - 2:30 PM. The American Enterprise Institute (AEI) will host a program titled "Telecommunications Policy as Trade Policy: Negotiations with Japan over Interconnection Pricing". See, online information and registration page. See also, agenda, at right. Location: Wohlstetter Conference Center, AEI, 1150 17th Street, NW.
9:00 AM. FTC Commissioner Mozelle Thompson will participate in a private forum titled, "From Principles to Performance," sponsored by the American Advertising Federation. Location: Ronald Reagan Building and International Trade Center, Pennsylvania Avenue and 13 Street, NW.
9:30 AM. The FCC will hold a meeting. The agenda includes the following: (1) a Notice of Proposed Rule Making (NPRM) initiating a comprehensive examination of the appropriate regulatory framework for incumbent local exchange carriers' (ILECs') provision of broadband services; (2) a NPRM to initiate the FCC's triennial review of the definitions of and rules concerning access to ILEC unbundled network elements; (3) an order in regarding the FCC's plans for nationwide thousands block number pooling (CC Docket No. 96-98 and CC Docket No. 99-200); (4) a second NPRM concerning new equal employment opportunity rules for broadcast licensees and cable entities; (5) a Report and Order concerning allocation and service rules to reallocate television channels 52-59; and (6) a First Report and Order to provide for new ultra wideband (UWB) devices (ET Docket No. 98-153). Location: Commission Meeting Room, FCC, 445 12th Street, SW, Room TWC305.
Location Change. 10:00 AM. The Senate Judiciary Committee will hold a hearing on the future of the Microsoft settlement. The scheduled witnesses include Charles James (Antitrust Division), Jay Himes (NY Office of the Attorney General), Charles Rule (counsel to Microsoft), Lawrence Lessig (Stanford), Mark Cooper (Consumer Federation of America), Jonathan Zuck (Association of Competitive Technology), Matthew Szulik (Red Hat, Inc.), and Mitchell Kertzman (Liberate Technologies). Location: Room 106, Dirksen Building.
10:00 AM. The Senate Finance Committee will hold a business meeting. The agenda includes mark up HR 3005, the Bipartisan Trade Promotion Authority Act of 2001. Location: Room 215, Dirksen Building.
2:00 PM. The House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property will hold the first part of a two part hearing titled "The Digital Millenium Copyright Act: Section 104 Report." The witnesses will be Marybeth Peters (Register of Copyrights), Carey Ramos (NMPA), Cary Sherman (RIAA), and Emery Simon (Business Software Alliance). Location: Room 2141, Rayburn Building.
Thursday, Dec 13
Day one of a two day conference titled the "19th Annual Institute on Telecommunications Policy & Regulation". Location: International Trade Center.
9:15 AM - 4:30 PM. The International Trademark Association will host a CLE program titled "Trademark Trial and Appeal Board (TTAB) Practice for Advanced Practitioners Forum." The price to attend is $395. See, brochure and agenda. Location: Crystal Gateway Marriott, 1700 Jefferson Davis Highway, Arlington, VA.
10:00 AM. The Senate Judiciary Committee will hold a business meeting. Location: Room 226, Dirksen Building.
10:00 AM. The House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property will hold the second part of a two part hearing titled "The Digital Millenium Copyright Act: Section 104 Report." The witnesses will be Marybeth Peters (Register of Copyrights), Marvin Berenson (Broadcast Music Inc.), Jonathan Potter (Digital Media Association), and Gary Klein (Consumer Electronics Association). Location: Room 2141, Rayburn Building.
2:00 PM. The Progressive Policy Institute (PPI) and the NanoBusiness Alliance will jointly host a panel discussion on the public policy implications of emerging science and business of nanotechnology. The panelists will be Rob Atkinson (PPI), Mark Modzelewski (NanoBusiness Alliance), Mike Roco (National Nanotechnology Initiative), Steve Johns (Ardesta Capital), Meyya Meyyapan (NASA Ames Center for Nanotechnology), Steve Wilson (NYU Center for Advanced Materials and Nanotechnology), Stephan Maebius (Foley and Lardner Law), and Josh Wolfe (Lux Capital). Location: Capitol Building, Room SC4.
2:00 PM. House Science Committee Chairman Sherwood Boehlert (R-NY) will hold a year end on the record question and answer session on Committee business, accomplishments, and plans for next year. Location: Room 2318, Rayburn Building.
6:00 PM. The FCBA will hold its 15th Annual FCBA Chairman's Dinner. The reception begins at 6:00 PM; dinner begins at 7:30 PM. Location: Washington Hilton & Towers, 1919 Connecticut Avenue, NW.
Friday, Dec 14
8:30 - 10:00 AM. The American Enterprise Institute (AEI) will host a press breakfast on "The Role of the FCC in Restricting the Ownership of Licenses". Harold Furchtgott Roth and other AEI scholars will speak. RSVP to Veronique Rodman at 202 862-4871 or vrodman@aei.org. Location: AEI, 1150 17th Street, NW, 11th Floor Conference Room.
Day two of a two day conference titled the "19th Annual Institute on Telecommunications Policy & Regulation". Location: International Trade Center.