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January 22, 2002, 9:00 AM ET, Alert No. 351.
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DC Circuit Rules in CALEA Cost Recovery Case
1/18. The U.S. Court of Appeals (DCCir) issued its opinion in USTA v. FBI, a case regarding the cost recovery and notice of required capacity provisions of the CALEA. The Appeals Court affirmed the District Court's grant of summary judgment on the USTA's cost recovery claim, but reversed and remanded on the notice claim.
CALEA. Congress passed the Communications Assistance for Law Enforcement Act (CALEA), 47 U.S.C. § 1001 et seq., in 1994 to enable law enforcement authorities to maintain their existing wiretap capabilities in new telecommunications devices. The Congress had cell phones in mind. The CALEA provides that wireline, cellular, and broadband PCS carriers must make their equipment capable of certain surveillance functions. The CALEA has since been implemented in a manner that expands surveillance capabilities beyond those provided in the statute, thereby increasing the financial burden on communications carriers, and hence, their customers.
CALEA: § 1002. This section of the CALEA addresses the required capability of carriers to conduct electronic surveillance. It is not at issue in the case. However, it is the subject of a proceeding before the Federal Communications Commission (FCC). See, August 15, 2000, opinion of the U.S. Court of Appeals (DCCir) in USTA v. FCC, 227 F.3d 450. See also, the FCC's CALEA information page.
CALEA: § 1003. This section, which is the subject of this case, addresses the required capacity of telecommunications carriers to conduct electronic surveillance. That is, it goes to the "actual number of communication interceptions, pen registers, and trap and trace devices ..." and the "maximum capacity required to accommodate all of the communication interceptions, pen registers, and trap and trace devices ..." It requires the Attorney General (in this case his designate is the FBI) to publish a notice in the Federal Register of the actual number and maximum capacity that he estimates that government agencies authorized to conduct electronic surveillance may conduct and use simultaneously.
CALEA: § 1008. This section covers allocation of costs associated with compliance with the CALEA. It provides, among other things, that the Attorney General "may agree, subject to the availability of appropriations, to pay the telecommunications carrier for the additional reasonable costs of making compliance with such assistance capability requirements reasonably achievable".
FBI Rules. The FBI published its final notice [94 pages in PDF] implementing § 1003 on March 12, 1998. See, Federal Register, March 12, 1998, Vol. 63, No. 48, at Pages 12218 - 112310.
District Court. The U.S. Telecom Association (USTA), a trade association of about 1400 telephone companies, filed its original complaint in U.S. District Court (DC) on August 19, 1998, against the FBI and others alleging that this final notice violated the cost recovery provisions of the CALEA by erroneously defining the class of modifications for which carriers might be eligible for reimbursement. The USTA also alleged that the FBI's concept of the notices of required capacity misread the statute in a variety of ways, each increasing the carriers' burdens and their risks of being found noncompliant. The District Court consolidated this case with a similar case filed by the Cellular Telecommunications Industry Association (CTIA). The District Court granted summary judgment in favor of the FBI on all issues.
Appeals Court. A three judge panel of the DC Circuit affirmed the District Court on the reimbursement scheme, finding that the FBI correctly defined the modifications required to be reimbursed. However, the Court of Appeals reversed on the notice of required capacity issue, and instructed the District Court to remand the case.
Note Regarding Pen Registers and Trap and Trace Devices. These are both old telephone industry concepts. Pen registers are devices that record telephone numbers that are dialed or punched. Trap and trace devices record the telephone numbers of incoming calls. It is also noteworthy that on October 26, 2001, President Bush signed HR 3162, the USA PATRIOT Act. It expanded law enforcement agencies' authority with respect to the use of pen registers and trap and trace devices. Prior law covered "wire" communications. The USA PATRIOT Act provides that the concept of a pen register is expanded from merely capturing phone numbers, to capturing routing and addressing information in any electronic communications, including Internet communications. The Act similarly expands the concept of trap and trace devices.
Note Regarding Privacy. The claims plead in the complaint, and ruled upon by the District and Appeals Courts, in this case, pertain to cost recovery and notices of required capacity. However, the statute implicates fundamental notions of individual privacy. Hence, in addition to industry groups (such as the USTA and CTIA), groups that advocate privacy rights (such as the Center for Democracy and Technology (CDT), the Electronic Privacy Information Center (EPIC), and others), have also opposed the FBI's and FCC's implementation of the CALEA.
Appeals Courts Rule in Generic Drug Cases
1/17. The U.S. Court of Appeals (FedCir) issued its opinion in Biovail v. Andrx, an Abbreviated New Drug Application (ANDA) case. The District Court shortened the statutory 30 month delay of approval of Andrx's pending ANDA and ordered that the ANDA be approved by the FDA. The Appeals Court vacated the judgment and remanded.
1/18. The U.S. Court of Appeals (DCCir) issued its opinion in Pharmachemie v. Barr Laboratories, a Hatch Waxman Amendments case involving tamoxifen, a breast cancer drug. The District Court granted summary judgment to Pharmachemie. Subsequently, Pharmachemie lost its court challenge to the underlying patent. Hence, the Appeals Court dismissed the appeal for lack of jurisdiction, vacated the judgment of the District Court, and remanded the case with instructions to dismiss the complaint.
First Circuit Rules in Music Copyright Case
1/17. The U.S. Court of Appeals (1stCir) issued its opinion in Ortiz Gonzalez v. Fonovisa, a pair of cases involving music copyright infringement. The Appeals Court affirmed the District Court. It held that a distributor can be liable for copyright infringement where the plaintiff has not established that the producer was guilty of copyright infringement.
China, WTO Obligations, and Export Controls
1/18. Representatives of the State and Commerce Departments gave their assessments of the People's Republic of China's likely compliance with its World Trade Organization (WTO) obligations at a U.S.-China Commission event. A Defense Department representative also addressed export controls.
Shaun Donnelly, Acting Assistant Secretary of State for the Bureau of Economic and Business Affairs, predicted that "There will likely be bumps in the road to implementation for the Chinese Government. Government officials may have difficulty meeting deadlines for certain measures. Local officials initially may not be able to fully grasp the depth of changes needed. There may be pockets of resistance within China to full implementation of painful changes in areas like agricultural liberalization or intellectual property protection." See, transcript.
William Lash, Assistant Secretary of Commerce for Market Access and Compliance, testified that "I personally believe that the leadership of China is earnest in its commitments to play by the rules of the WTO system, even with the enormous structural challenges that WTO membership entails domestically." See, transcript.
Lash also addressed what the U.S. is doing to assist China in its reform efforts. He stated that "We have already initiated a series of training programs for Chinese officials on WTO related issues of concern to U.S. business. Our first team traveled to Beijing and Shanghai in the fall of 2000 to review China's future WTO obligations in areas like standards, intellectual property rights and anti dumping requirements with Chinese officials and the resident U.S. business community. In early 2001, a half dozen sessions were held in Washington for Chinese officials, on topics ranging from e-commerce regulation to corporate mergers and acquisitions, to WTO anti-dumping rules. Subsequently, China Team officers traveled to China with the American National Standards Institute for seminars in Beijing and Xian, organized Intellectual Property Rights Enforcement Training sessions in Shenyang, Hangzhou, and Xiamen, and conducted information technology and semiconductor seminars in Beijing."
Lisa Bronson, Deputy Under Secretary of Defense for Technology Security Policy and Counterproliferation, focused on export controls. She stated that PR China has a "poor record" on proliferation. See, transcript.
She elaborated that "China's modernization program appears to be focusing on ``pockets of excellence,´´ where advances in select technologies can be leveraged for disproportionate benefit in a potential conflict. Several such ``pockets´´ include: preemptive long range precision strike capabilities; information dominance; command and control; and integrated air defense. In support of these efforts, Beijing has identified the development of an indigenous microelectronics industry as one of its highest priorities. A cutting edge domestic microelectronics sector will support both military and commercial modernization in China. China's increasing emphasis on development of very large scale integrated circuits will have direct application in future military systems, for example, advanced phased array radars."
"China is both a problematic proliferator and the largest potential future market for the U.S.", said Bronson. "The challenge of China is striking the balance between the desire to successfully compete in a vast untapped commercial market and the need to protect national security, including through effective nonproliferation. Our policies and practices must strive to minimize transfers of technologies that could contribute to potentially threatening modernization efforts. Our focus is already on the areas Beijing has identified as its ``pockets of excellence,´´ but we need to continually be vigilant in the licensing process for new areas where our high technology might be exploited to our detriment."
She added that "If a commodity is widely available, and not amenable to multilateral controls, then export controls may not be the best tool for addressing a national security or proliferation concern."
People and Appointments
1/15. Jonathan Aberman joined the Washington DC office of the law firm of Fenwick & West as a partner. David Dutil joined the firm as an associate in the Washington DC office. Aberman focuses on representing companies in biotechnology, computer software, Internet services, and other industries. He previously was a partner in the Northern Virginia office of the law firm of Pillsbury Winthrop. See, F&W release.
1/14. Robert Auchter was named a partner in the law firm of Robins, Kaplan, Miller & Ciresi. He works in the intellectual property section of the Washington DC office. He focuses on patent litigation, counseling and prosecution involving consumer and industrial electronics, electronic power technology, medical devices and instruments, semiconductor processing, semiconductor devices and circuits, aerospace technology, satellite communications, interactive voice technologies, telecommunications, computer hardware and software, and other technologies. See, release.
1/15. Jerry Blackstock joined the litigation section of the Atlanta office of the law firm of Hunton & Williams. He was previously Chair of the Litigation Department of the law firm of Powell Goldstein Frazer & Murphy. See, H&W release.
1/14. Stephen Hill joined the Washington DC office of the law firm of Howrey Simon Arnold & White as a partner in the antitrust practice group. He was previously a partner in the Washington DC office of the law firm of Sidley & Austin. See, Howrey release.
1/14. Hogan & Hartson, a Washington DC based law firm, and Squadron Ellenoff Plesent & Sheinfeld, a law firm based in New York City and Los Angeles, announced that they will merge. See, H&H release.
1/14. The law firm of Morrison & Foerster announced that 14 attorneys have been elevated to partner. The list includes Hector Gallegos (who is in the Litigation, IP, and Computer & Software sections in the firm's Los Angeles office), Heike Fischer (Corporate and IP, Palo Alto), Erik Olson (Litigation and IP, Palo Alto), Erica Wilson (Litigation, Palo Alto), Eric Acker (Litigation and IP, San Diego), Rosemary Tarlton (IP, San Francisco), and Thomas Treffert (IP, San Francisco). See, MoFo release.
1/16. Evelyn Sroufe rejoined the law firm of Perkins Coie as a partner in the firm's Corporate Finance Group in the Seattle office. She was previously President and CEO of The WebSea Group, Inc., a Seattle based consulting firm to technology companies. Before that, she worked for Visio, and for Microsoft after it acquired Visio. See, PC release.
Tuesday, Jan 22
10:00 AM - 12:30 PM. The FCC's Office of Engineering and Technology and Corning Incorporated will host a tutorial on optical communications. See, FCC notice. Location: FCC, Commission Meeting Room (TWC-305), 445 12th Street, SW, Washington DC.
12:15 PM. The Federal Communications Bar Association's Common Carrier Practice Committee will host a brown bag lunch. The speaker will be Dorothy Attwood, Bureau Chief of the FCC's Common Carrier Bureau. RSVP to Rhe Brighthaupt at Location: Wiley Rein & Fielding, 1750 K St., NW, 10th Floor Conference Room.
Wednesday, Jan 23
The House reconvenes at 12:00 NOON. It will then take up two non tech related bills (HR 700 and HR 2234).
The Senate reconvenes at 12:00 NOON. The Senate will recess from 12:30 - 2:15 PM, for the weekly party conferences.
9:00 AM - 5:15 PM. There will be a day long conference titled Broadband Outlook 2002 Conference. Location: Four Seasons Hotel, Washington DC. The scheduled speakers include the following:
 • 9:15 - 9:45 AM. Nancy Victory, head of the NTIA.
 • 10:45 - 11:45 AM. Robert Pepper, Chief of the FCC's Office of Plans and Policy.
 • 11:45 AM - 12:00 NOON. Dorothy Atwood, Chief of the FCC's Common Carrier Bureau.
 • 12:00 NOON - 1:30 PM. Ken Feree, Chief of the FCC's Cable Services Bureau.
12:15 PM. The Federal Communications Bar Association's Global Telecommunications Development Committee will host a brown bag lunch. Doreen McGirr (Department of State) and John Giusti (FCC International Bureau) will speak about preparations for the ITU World Telecommunications Development Conference. RSVP to Kent Bressie. Location: Wilkinson Barker Knauer, 2300 N Street, NW, 7th floor, Washington DC.
Thursday, Jan 24
The House will meet at 10:00 AM to take up HR 1762, a bill to amend the Higher Education Act.
9:30 AM. The House Commerce Committee's Subcommittee on Oversight and Investigations will hold a hearing the destruction of Enron related documents by Anderson personnel. Location: Room 2322, Rayburn House Office Building.
11:00 AM. The Cato Institute will host a panel discussion titled "Eye in the Sky -- and Everywhere Else:
Do Biometric Technologies Violate Our Rights?" The speakers will be Joseph Atick (Visionics Corp.), Marc Rotenberg (EPIC), Dorothy Denning (Georgetown University), and John Woodward (RAND). A lunch will follow the program. Location: Cato Institute, 1000 Massachusetts Avenue, NW, Washington DC.
12:15 PM. The Federal Communications Bar Association's Mass Media Committee will host a brown bag lunch. The speakers will be David Solomon, Chief of the FCC's Enforcement Bureau, and Linda Blair, Deputy Chief of the FCC's Enforcement Bureau. RSVP to Location: National Public Radio, 635 Massachusetts, Ave., NW, 1st Floor, Washington DC.
2:00 PM. The Senate Judiciary Committee will hold a hearing on judicial nominations. Sen. Maria Cantwell (D-WA) will preside. Location: Room 226, Senate Dirksen Building.
Friday, Jan 25
The House will meet at 10:00 AM in pro forma session only.
Monday, Jan 28
8:30 - 10:00 AM. The American Enterprise Institute (AEI) will host a press breakfast. AEI scholars will provide as well a retrospective on the first six years under the Telecommunications Act of 1996. RSVP to Veronique Rodman, Director of Public Affairs, at 202 862-4871 or Location: AEI, 1150 17th Street, NW, 11th Floor, Conference Room, Washington DC.
12:00 NOON. Deadline to submit comments to the Office of the United States Trade Representative (USTR) regarding the operation and effectiveness of the World Trade Organization (WTO) Basic Telecommunications Agreement, the telecommunications provisions of the North American Free Trade Agreement (NAFTA), and other telecommunications trade agreements. This request for comments is pursuant to an annual review of telecom agreements required by Section 1377. See, notice in the Federal Register, December 27, 2001, Vol. 66, No. 248, at Pages 66963 - 66964.
Appeals Courts Rule in Trademark Cases
1/14. The U.S. Court of Appeals (2ndCir) issued its opinion in 20th Century Fox v. Marvel, a contract and Lanham Act case regarding the rights of trademark licensees.
1/18. The U.S. Court of Appeals (5thCir) issued its opinion in Waco International v. KHK Scaffolding, a case involving ex parte seizure orders in trademark infringement cases. The Appeals Court affirmed the District Court.
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