|AOL Time Warner Files
Treble Damages Antitrust Suit Against Microsoft
|1/22. AOLTW's Netscape unit filed a complaint
in U.S. District Court
(DC) against Microsoft alleging violation of the Sherman
Antitrust Act, the parallel sections of the District of
Columbia Code, and the common law claim of tortious
interference. Netscape seeks treble damages and injunctive
Netscape, which is now a subsidiary of AOL Time Warner,
relies upon facts and conclusions of law previously
adjudicated in the government's antitrust action against
Microsoft. See, Judge Thomas Jackson's Findings
of Fact [PDF] (November 5, 1999), Conclusions
of Law (April 3, 2000), and Final
Judgment (June 7, 2000). See also, opinion
of the U.S. Court of Appeals (DCCir) (June 28, 2001). In
addition, Netscape alleges that Microsoft continues to engage
in illegal and anticompetitive conduct.
The twenty page, seven count, complaint reviews the history of
web browsers from Netscape's release of Navigator 1.0 in 1994
through Microsoft's Internet Explorer's current 80% share. It
also reviews the history and status of the government's
antitrust action against Microsoft, which is also pending in
the U.S. District Court for the District of Columbia. (See,
D.C. Nos. 98-1232 and 98-1233.)
Netscape Communications Corporation is a Delaware corporation
with its principal place of business in Mountain View,
California. AOL completed its acquisition of Netscape in 1999.
AOL subsequently merged with Time Warner. Hence, Netscape is
now a wholly owned subsidiary of AOL Time Warner. It is the
producer of the browser named Navigator.
The complaint pleads seven causes of action: (1) Sherman Act
§ 2 -- Illegal Monopoly Maintenance of Intel- Compatible
PC Operating Systems (see, 15 U.S.C.
§ 2), (2) Sherman Act § 2 -- Further Acts of
Illegal Monopoly Maintenance, (3) Sherman Act § 1 --
Illegal Tying of Windows and Internet Explorer (see, 15 U.S.C.
§ 1), (4) Sherman Act § 2 -- Illegal
Monopolization of the Web Browser Market, (5) Sherman Act
§ 2 -- Attempted Monopolization of the Web Browser
Market, (6) Parallel Violations of District of Columbia Code
§§ 28-4502 and 28-4503, and (7) common law liability for
intentional interference with contractual relations and
intentional interference with prospective economic advantage
and/or prospective contractual or business relations.
The complaint seeks treble damages for the alleged antitrust
violations, punitive damages for tortious interference, and
attorneys fees. It also seeks "injunctive relief
sufficient to prevent further antitrust injury to Netscape and
to restore competition lost in the market for Web browsers,
and to enable middleware platforms to compete with Intel-
compatible PC operating systems".
Randall Boe, General Counsel to AOL, stated in a release
that "Netscape's lawsuit is a logical extension of the
findings entered by the District Court and unanimously
affirmed by the Court of Appeals that Microsoft thwarted
competition, violated the antitrust laws and illegally
preserved its monopoly at Netscape's expense". He added
that "There is no question that Microsoft's conduct
violated the law and harmed competition and consumers.
Netscape's lawsuit seeks not only an award of damages, but for
the Court to provide injunctive relief that will help restore
competition on the computer desktop. We support the efforts
and goals of the non-settling state attorneys general who
continue to seek appropriate remedies to end Microsoft's
anticompetitive conduct and illegal activities. The aims of
Netscape's lawsuit are entirely consistent with their
The complaint lists Netscape's attorneys as the law firms of Kirkland & Ellis and Cravath Swaine & Moore.
|Supreme Court Denies Cert
in Mouse Patent Case
|1/22. The Supreme
Court denied certiorari in Logitech v. Gart, No.
01-710. See, January 22, 2002, Order
List [PDF], at page 5.
This is a petition for writ of certiorari from the June 26,
of the U.S.
Court of Appeals (FedCir) in Gart
v. Logitech, a patent infringement case
involving computer mouses. Samuel Gart holds U.S.
Patent 4,862,165, which relates to ergonomically shaped
computer mouses for reducing muscle fatigue.
Gart filed a complaint against Logitech, a producer of
mouses and other computer input devices, in U.S. District
alleging infringement of this patent. On cross motions for
summary judgment, the District Court determined that Logitech
did not infringe the patent either literally or under the
doctrine of equivalents. The District Court also determined on
a motion for summary judgment the starting dates for accrual
of damages pursuant to 35 U.S.C.
§ 287(a). The Appeals Court vacated the grant of summary
judgment of no infringement, either literally or under the
doctrine of equivalents, and remanded for further proceedings.
The Appeals Court also reversed in part the § 287
determination. The Supreme Court denied certiorari
|People and Appointments
|1/11. Jon Dudas was named Deputy Director of the U.S. Patent and Trademark Office
(USPTO). Dudas was previously Senior Floor Director for the
Speaker of the House, Rep.
Dennis Hastert (R-IL). Prior to that, he served as the
Deputy General Counsel and Staff Director for the House Judiciary
Committee, and Counsel to the Courts and Intellectual
Property Subcommittee. USPTO Director James Rogan was
previously a member of these committees.
1/22. President Bush made a recess appointment of Cynthia
Glassman to be a Commissioner of the Securities and Exchange Commission
(SEC), thereby avoiding the Senate confirmation process. She
is currently a principal at Ernst
& Young. Before that, she worked at Furash &
Company. From 1977 through 1986 she worked at the Federal Reserve System
in several positions, including Economist and Senior
1/22. President also reappointed Isaac Hunt to be a
Commissioner of the Securities
and Exchange Commission (SEC). He was first appointed to
the SEC by former President Clinton in 1996.
1/22. Alison Ritchie was named Chief Executive Officer
of BTopenworld, BT's mass market Internet division. See, BT
|FTC Proposes Changes to
Telemarketing Sales Rule
|1/22. Federal Trade Commission
(FTC) announced that it is proposing numerous changes to its
Telemarketing Sales Rule (TSR). The proposals include the
creation of a national "do not call" registry, and a
prohibition on blocking caller ID systems by telemarketers. In
addition, the proposed rule contains several Internet
The TSR, which is codified 16 CFR Part 310, implements the
1994 Telemarketing Consumer Fraud and Abuse Prevention Act, 15
U.S.C. §§ 6101-6108. The TSR prohibits specific
deceptive and abusive telemarketing acts or practices,
requires disclosure of certain material information, requires
express verifiable authorization for certain payment
mechanisms, sets record keeping requirements, and specifies
those transactions that are exempt from the TSR. The proposed
ruled is contained in a notice
[150 pages in PDF] to be published in the Federal Register.
The notice states that the proposed rule provides that
"facsimile transmissions, electronic mail, and other
similar methods of delivery are direct mail for purposes of
the direct mail exemption".
The proposed rule also narrows the exemptions to the TSR. For
example, it excepts calls involving the sale of Internet
services and web services from the business to business
exemption. The proposed version of § 310.6(g) would
provide an exemption for "Telephone calls between a
telemarketer and any business, except calls to induce a
charitable contribution, and those involving the sale of
Internet services, Web services, or the retail sale of
nondurable office or cleaning supplies; provided, however,
that § 310.5 of this Rule shall not apply to sellers or
telemarketers of nondurable office or cleaning supplies,
Internet Services, or Web services."
Also, since this proposed rule includes the terms
"Internet services" and "web services",
the proposed rule adds definitions of these terms, at § 310.2(m)
and § 310.2(bb), respectively.
"Internet services" is defined as "the
provision, by an Internet Service Provider, or another, of
access to the Internet." Moreover, the notice states that
the FTC "intends for this term to encompass the provision
of whatever is necessary to gain access to the Internet,
including software and telephone or cable connection, as well
as other goods or services providing access to the Internet.
Specifically, the term includes provision of access to the
Internet, or any component thereof, such as electronic mail,
the World Wide Web, websites, newsgroups, Internet Relay Chat
or file transfers."
Similarly, the term "Web services" is defined as
"designing, building, creating, publishing, maintaining,
providing, or hosting a website on the Internet."
The notice also states that the FTC "has decided not to
expand the Rule's coverage to online solicitations."
FTC Commissioner Orson Swindle wrote in a concurring
statement that the FTC's "regulatory scheme would be
more effective if it covered the entire spectrum of entities
engaged in telemarketing. Under the Telemarketing Act and the
TSR, however, the Commission lacks jurisdiction in whole or in
part over the calls of entities such as banks, telephone
companies, airlines, insurance companies, credit unions,
charities, political campaigns, and political fund raisers. In
addition, the Commission also proposes to exempt from the TSR
calls made on behalf of certain religious organizations."
The FTC requests that public comments be submitted by March
29, 2002. Also, FTC staff will conduct a public forum on June
5, 6, and 7, 2002, to discuss the written comments.
|Supreme Court Denies Cert
in Copyright Preemption Case
|1/22. The Supreme
Court denied certiorari in Taco Bell v. Wrench,
No. 01-701, a case involving preemption of state law contract
and tort remedies by the federal Copyright Act. See, January
22, 2002, Order
List [PDF], at page 5.
Background. The plaintiffs, Wrench LLC and its two
principals, are the creators of a cartoon character named
"Psycho Chihauhua." Following discussions with the
plaintiffs, the defendant, Taco Bell, began an ad campaign
featuring a Chihuahua dog similar to that developed by
plaintiffs, but without plaintiffs' permission.
District Court. Plaintiffs filed a complaint in U.S.
District Court (WDMich)
against Taco Bell, based upon diversity of citizenship, in
which they plead various implied contract and tort causes of
action. The trial court issued three opinions. It granted
summary judgment to Taco Bell on the grounds that the
Copyright Act preempted all of the claims, including those
based on breach of an implied in fact contract. The trial
court also held that plaintiffs' concept lacked the novelty
necessary to sustain their claims. (See, D.C. No. 98-00045,
W.D. Mich., 1998 WL 480871, 36 F. Supp. 2d 787, and 51 F. Supp. 2d
Appeals Court. On June 6, 2001, the U.S.
Court of Appeals (6thCir) issued its opinion
reversing the District Court. It held that the preemption
language of the Copyright Act, found at § 301,
provides that a state common law or statutory claim is
preempted if the work is within the scope of the "subject
matter of copyright," as specified in §§ 102
and 103, and, the rights granted under state law are
equivalent to any exclusive rights within the scope of federal
copyright as set out in § 106.
The Appeals Court held that neither the subject matter nor
equivalency prongs of the test were satisfied, and hence,
there is no preemption. It held that since the plaintiffs'
claims pertain to intangible ideas and concepts, they do not
come within the subject matter of copyright; § 102(b)
expressly excludes intangible ideas and concepts. It also held
that an implied in fact contract claim under Michigan law
contains the additional element of expectation of
compensation, which is not an element of a § 106 claim,
and hence, not equivalent. The Appeals Court also held that
the Michigan Courts would not impose a novelty requirement in
an implied in fact contract claim.
Supreme Court. The Supreme Court denied Taco Bell's
petition for writ of certiorari, without opinion.
|Wednesday, Jan 23
|The House reconvenes at 12:00 NOON. It will then take
up two non tech related bills (HR
700 and HR
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. 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
• 11:45 AM - 12:00 NOON. Dorothy Atwood, Chief
of the FCC's Common Carrier
• 12:00 NOON - 1:30 PM. Ken Feree, Chief of the
FCC's Cable Services Bureau.
12:15 PM. The FCBA's
Global Telecommunications Development Committee will host a
brown bag lunch. Doreen McGirr (State Dept.) 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.
|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,
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
Dorothy Denning (Georgetown University), and John Woodward
(RAND). A lunch will follow the program. Location: Cato
Institute, 1000 Massachusetts Avenue, NW.
12:15 PM. The FCBA'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 email@example.com.
Location: NPR, 635 Massachusetts, Ave., NW, 1st Floor.
2:00 PM. The Senate
Judiciary Committee will hold a hearing on judicial
nominations. Sen. Maria
Cantwell (D-WA) will preside. Location: Room 226, Dirksen
|Friday, Jan 25
|The House will meet at 10:00 AM in pro forma session only.
9:30 AM - 1:00 PM. The National
Coalition for Technology in Education and Training (NCTET)
will host an event titled "Measuring the Impact: A
National Summit on Education Technology". This is an
invitation only event. For more information, contact Brenda
Kempster at 760 674-8919 or Brenda @kempstergroup.com.
Location: U.S. Chamber of Commerce, 1615 H Street, NW.
|Monday, Jan 28
|Day one of the COMNET Conference & Expo. Location:
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
Location: AEI, 1150 17th Street, NW, 11th Floor, Conference
12:00 NOON. Deadline to submit comments to the 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.
|Tuesday, Jan 29
|Day two of the COMNET Conference & Expo. Location:
President Bush will deliver the State of the Union Address
to a joint session of the Congress.
|1/22. The Copyright
Office published a notice
in the Federal Register directing "all claimants to
royalty fees collected under the section
119 statutory license in 2000 to submit comments as to
whether a Phase I or a Phase II controversy exists as to the
distribution of these fees, and a Notice of Intention to
Participate in a royalty distribution proceeding." See,
Federal Register, January 22, 2002, Vol. 67, No. 14, at Pages
2912 - 2914.
1/14. The U.S. Attorneys Office for the Eastern District of
Virginia formed a Computer Hacking and Intellectual Property
(CHIP) unit. The unit will be comprised of six Assistant
United States Attorneys. The Eastern District of Virginia
includes the tech heavy northern Virginia suburbs of
Washington DC. See, release.
1/18. Michael Logan plead guilty in U.S. District Court (NDCal)
to unauthorized access to a protected computer causing damage
in violation of 18
U.S.C. § 1030(a)(5)(C). Logan stated in his written Plea
Agreement [PDF] that he "intentionally accessed a
computer of Catholic Healthcare West (CHW) without
authorization. I thereafter sent electronic mail (e-mail) to
approximately 30,000 employees and associates of CHW which
purported to be from a named employee of CHW and which
contained insulting statements about that named employee and
other CHW employees." Sentencing is scheduled for April
26, 2002. See also, September 25, 2001, Indictment,
and January 18, 2002, release.
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