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February 4, 2002, 9:00 AM ET, Alert No. 360.
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9th Circuit Rules on Trademark Infringement in Web Pages and Meta Tags
2/1. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in PEI v. Welles, a case involving claims of trademark infringement and dilution in a web site, and its meta tags. The Appeals Court largely affirmed the District Court's summary judgment for the web site defendants.
Background. Terri Welles was Playboy's Playmate of the Year in 1981. More than twenty years later, she is still posing for the camera, although, no longer for Playboy Enterprises, Inc. (PEI). Her body of work is now published in her own web site, which bears her name -- "Terri Welles". Her web site also carries the subtitle "Playboy Playmate of the Year 1981".
The web site also includes similar information in meta tags. That is, the source code, which is read by some search engines, includes the following: <META NAME="description" CONTENT="Playboy Playmate Of The Year 1981 ... ">. Her web site also prominently displays the disclaimer that the web site is not endorsed or sponsored by PEI; it also lists terms that are trademarked by PEI, including "Playboy", and "Playmate of the Month". Welles' web site also uses the term PMOY, which is not trademarked by PEI, as a watermark.
District Court. Playboy Enterprises, Inc. (PEI) filed complaints in U.S. District Court (SDCal) against Welles, Terri Welles, Inc., and others, alleging trademark infringement, dilution, false designation of origin, and unfair competition. PEI objected to the following: (1) use of the trademarked terms in metatags, (2) use of trademarked terms in the masthead of the web site, (3) use of trademarked terms in banner ads placed in other web sites, and (4) use of "PMOY 81" as a watermark on pages of her web site. The District Court granted Welles' motion for summary judgment.
Court of Appeals. A three judge panel of the 9th Circuit, following the precedent set in New Kids On The Block v. New America Publishing, 971 F.2d 302 (9th Cir. 1992), held that Welles' uses of PEI's trademarks in headlines, banner ads, and meta tags, are permissible, nominative uses. The Court held in New Kids that to be a permissible use of a trademark, based upon nominative use, the use must satisfy the following three part test: "First, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder."
However, the Appeals Court held that Welles' use of "PMOY 81" is not nominative and remanded for a determination of whether it infringes on a PEI trademark.
The Appeals Court also affirmed on the trademark dilution claims. It stated that "nominative uses, by definition, do not dilute the trademarks."
Trademark Law and the Free Flow of Information on the Internet. The Appeals Court's analysis of the first prong of the New Kids test in the context of meta tags may be noteworthy. "Forcing Welles and others to use absurd turns of phrase in their metatags, such as those necessary to identify Welles, would be particularly damaging in the internet search context. Searchers would have a much more difficult time locating relevant websites if they could do so only by correctly guessing the long phrases necessary to substitute for trademarks. We can hardly expect someone searching for Welles' site to imagine the same phrase proposed by the district court to describe Welles without referring to Playboy -- ``the nude model selected by Mr. Hefner's organization . . . .´´ Yet if someone could not remember her name, that is what they would have to do. Similarly, someone searching for critiques of Playboy on the internet would have a difficult time if internet sites could not list the object of their critique in their metatags."
The Court concluded that "There is simply no descriptive substitute for the trademarks used in Welles' metatags. Precluding their use would have the unwanted effect of hindering the free flow of information on the internet, something which is certainly not a goal of trademark law." However, the Court stopped short of stating that promoting the free flow of information on the Internet is a goal of trademark law.
8th Circuit Rules in Antitrust Case
2/1. The U.S. Court of Appeals (8thCir) issued its opinion [PDF] in Ozark v. Radio Shack, a price fixing antitrust case involving the marketing of satellite TV services. Affirmed.
Facts. Ozark Heartland Electronics was a retail electronics store in Missouri affiliated with Radio Shack, a retail electronics chain. Primestar provided satellite television service. Primestar distributed the satellite television service to consumers through its Partner Affiliate Distributors (PADs). Primestar has since been acquired by DirecTV.
Radio Shack entered into a marketing agreement with Primestar under which Radio Shack and its affiliated stores would promote Primestar's satellite TV service to consumers on behalf of Primestar's PADs. The agreement authorized participating Radio Shack stores to display the Primestar service, solicit subscribers, answer customer inquiries, and collect from subscribers a prepayment on the local PADs' installation fee. Primestar suggested a prepayment fee of $149.
Ozark participated in this Radio Shack marketing campaign. However, it only charged a $99 prepayment fee, to undercut competitors' prices. Radio Shack then stripped Ozark of its authority to sign new Primestar subscribers.
District Court. Ozark and Boone filed a complaint in U.S. District Court (WDMO) against Radio Shack, Primestar, and others alleging resale price maintenance, in violation of the Sherman Act, 15 U.S.C. § 1, and breach of contract and tortious interference with contract under Missouri state law. The District Court granted summary judgment to defendants.
Court of Appeals. The 8th Circuit affirmed. It wrote that "The Sherman Act imposes liability on manufacturers who fix the minimum price at which buyers must resell their products. ... But this rule does not apply when a manufacturer directs his agent to sell at a particular price." It found that Ozark was Primestar's agent, and hence, there was no antitrust violation.
AAI Seeks to Enjoin Microsoft Settlement
2/1. The American Antitrust Institute (AAI) filed a motion [PDF] for a preliminary injunction with the U.S. District Court (DC) in the case AAI v. Microsoft and DOJ. See also, memorandum in support.
On January 24, the AAI filed a complaint [PDF] against Microsoft and the Department of Justice (DOJ) seeking declaratory relief pursuant to 15 U.S.C. § 16(b), which is also known as the Tunney Act. In the complaint, the AAI seeks to compel Microsoft and the DOJ to disclose further information about their Proposed Final Judgment (PFJ), which the AAI opposes. In the motion for a preliminary injunction, the AAI seeks to enjoin the DOJ "from closing the period which public comments may be submitted to and considered by the Justice Department under the Tunney Act pending this Court’s ruling on the merits of AAI's Complaint."
The Tunney Act provides, in part, that "Any proposal for a consent judgment submitted by the United States for entry in any civil proceeding brought by or on behalf of the United States under the antitrust laws shall be filed with the district court before which such proceeding is pending and published by the United States in the Federal Register at least 60 days prior to the effective date of such judgment."
The Act further provides that "the United States shall file with the district court ... a competitive impact statement which shall recite (1) the nature and purpose of the proceeding; (2) a description of the practices or events giving rise to the alleged violation of the antitrust laws; (3) an explanation of the proposal for a consent judgment, including an explanation of any unusual circumstances giving rise to such proposal or any provision contained therein, relief to be obtained thereby, and the anticipated effects on competition of such relief; (4) the remedies available to potential private plaintiffs damaged by the alleged violation in the event that such proposal for the consent judgment is entered in such proceeding; ..."
The AAI complaint asserts that the DOJ's competitive impact statement must be amended "(1) to include an explanation of why certain remedies previously pursued by the Justice Department were abandoned; (2) to include an explanation of the Justice Department’s evaluation and comparison of  the remedies that are being pursued in the PFJ and the various alternative remedies that are not; and (3) to include an explanation of how the PFJ will affect private litigation".
Jonathan Zuck, President of the Association for Competitive Technology (ACT), offered this reaction to the AAI's motion: "We hope that Judge Kotelly rules on this Oracle funded legal stunt quickly, so that she can dismiss it and go back to concentrating on the real legal issues before her. These continued efforts to delay settlement are only harming the industry and consumers."
WTO News
2/1. The World Trade Organization (WTO) announced that its Trade Negotiations Committee (TNC) reached an agreement on the structure of the negotiations launched at Doha, Qatar. The WTO stated in a release that "The TNC agreed there should be seven negotiating bodies, on agriculture, services, non-agricultural market access, rules, trade and environment, geographical indications for wines and spirits under the agreement on Trade Related Intellectual Property and reform of the Dispute Settlement Understanding. Negotiations on agriculture, services, environment, TRIPS, and the DSU reform will all be conducted in Special Sessions of the regular committees and councils where these issues are discussed. New negotiating groups will be created for negotiations in non-agricultural market access and rules."
FCC Commissioner Martin Addresses Spectrum Management
2/1. FCC Commissioner Kevin Martin gave a speech to the Federal Communications Bar Association in Washington DC. Among the issues which he addressed were spectrum management and copy protection.
Spectrum Management. He stated that "recent technological changes allow us to take sharing to new levels. Satellite and terrestrial sharing scenarios, once believed impossible, are now becoming more realistic. Sophisticated ultrawideband technology -- promising to deliver data at faster speeds and lower power -- can potentially co-exist with spectrum users in any frequency. Software defined radios allow quick modification to transmit and receive on any frequency and in any desired transmission format. Priority access capability allows for flexibility for a higher valued use some of the time, without having to dedicate specific frequencies to those uses all of the time. And DoD's “XG” program -- which focuses on Next Generation communications devices to support military deployment -- seeks to produce even further advances in spectrum sharing technology through dynamic assignment of frequency, time and space."
Martin continued that "Our spectrum management objective should be to create incentives for the efficient utilization of this valuable resource at every given point in time, by both established users and new entrants. What the Commission can do now to further these goals is set policies that make sharing easier, and even desirable. For example, a robust secondary market for spectrum and flexible allocations can create strong incentives for making use of excess capacity."
Copy Protection. Marting stated that "The movie studios, broadcasters, cable industry, and consumer electronics industry need to reach an agreement on how digital content will be protected, and what rights consumers will retain to make personal recordings. With Ken Ferree and Rick Chessen's leadership, we've had several industry wide meetings on this issue that I understand brought the sides closer together. But they’re not there yet, and the lack of progress is seriously impeding the availability of digital content -- and thwarting any progress in the transition. If further progress is not made soon, the Commission may need to become more directly involved."
NTIA Reports on Spectrum Use by Energy, Water and RR Industries
2/1. The National Information and Telecommunications Administration (NTIA) released a report [93 pages in PDF] titled "Current and Future Spectrum Use by the Energy, Water, and Railroad Industries".
This NTIA report states that "the energy, water, and railroad industries use spectrum between 20 megahertz (MHz) and 25 gigahertz (GHz). Although they use numerous frequencies in a variety of bands, all three industries agreed and informed NTIA that spectrum currently used is either congested or quickly approaching critical mass, thus leading to problems of interference." Moreover, industry commenters assert that "additional spectrum is needed".
However, the report continues that since it was "based predominantly on comments received from the industry and public, and information from federal agencies with oversight or regulatory authority over these industries, NTIA is unable to validate specific requirements and issues highlighted herein, such as exclusivity and congestion. However, NTIA suggests some of these issues may be addressed or mitigated with the use of advanced communications technology or newly allocated frequency bands, such as the 700 MHz guard bands.
The FCC is responsible for managing the spectrum used by the private sector industries, as well as state and local governments. Hence, the NTIA can only report recommendations to the FCC in this area. The NTIA report recommends that "it is of utmost importance that the Federal Communications Commission revisit these critical issues in order to accommodate the increasing role these industries play in maintaining quality of life."
FTC Official Addresses Privacy
1/24. Howard Beales, Director of the Bureau of Consumer Protection of the Federal Trade Commission (FTC), gave a speech titled "Privacy Notices and The Federal Trade Commission's 2002 Privacy Agenda" in San Francisco, California.
Beales said that "The events of September 11 make it clear that privacy is not, and cannot be, an absolute right."
He stated that the FTC has "changed the focus of the program somewhat. For example, in the past the Commission's privacy program was focused primarily on information collection. In contrast, we believe that the focus should be on misuse of information."
He also stated that the FTC's "past focus was primarily directed to online privacy ... . Adverse consequences can occur whether the information was originally collected online or off. The risk of identity theft is real, and the consequences are the same, whether the thief steals your credit card number from an online website or from your mailbox. Thus, many of our initiatives focus on the misuse of personal information collected offline as well as information collected online."
Beales reviewed several recent FTC privacy related actions, including its settlement with Eli Lilly, its proposed changes to the Telemarketing Sales Rule, its monitoring of compliance with the Fair Credit Reporting Act, and its role regarding identity theft. He also discussed the role of privacy notices, and the FTC's recent workshop on privacy notices by financial institutions under the Gramm Leach Bliley Act.
He then spoke at length about privacy notices. He stated that "privacy notices need to be written for consumers. That's their intended audience, not the regulators who prescribed them or the lawyers who will dissect them."
He concluded by listing "three key principles that should guide our next steps. First, it takes time to digest significant regulatory changes. ... Second, there remains an enormous amount that we do not know. ... Finally, we need to focus more clearly on what consequences we are trying to avoid."
More Privacy News
2/1. The Federal Trade Commission (FTC) published a notice in the Federal Register regarding its settlement with Eli Lilly. Eli Lilly accidentally disclosed the e-mail addresses of 669 subscribers to a Prozac related e-mail list. The settlement requires Eli Lilly to establish a security program. This notice sets a deadline of February 19, 2002 for public comments on the proposed consent agreement. See, Federal Register, February 1, 2002, Vol. 67, No. 22, at Pages 4963 - 4964.
1/31. Chris Israel gave a speech titled "Online Privacy -- Observations, Acknowledgements, Actions Taken and Challenges" at the Privacy Officers Association Second Annual Privacy and Data Security Summit Washington DC. Israel is the Deputy Assistant Secretary for Technology Policy at the Department of Commerce.
People and Appointments
1/31. The Silicon Valley based law firm of Gray Cary merged with the nine attorney Washington DC law firm of Blumenfeld & Cohen. Gray Cary has over 470 attorneys in offices in Palo Alto, San Diego, San Francisco, Austin, Sacramento, and Seattle. Blumenfeld & Cohen focuses on telecommunications and technology law. See, GC release.
1/31. The Washington DC law firm of Wiley Rein & Fielding added Rod Glover and Attison Barnes as partners, and Charles Lemley as an associate. All three previously worked in the Washington DC office of the law firm of Gardner Carton & Douglas. They are litigators who represent technology based companies. See, WRF release.
1/31. Edward DuMont joined the Washington DC law firm of Wilmer Cutler & Pickering as counsel in the firm's litigation section. He was previously Assistant to the Solicitor General of the U.S. He also worked briefly on computer crime and privacy issues an Associate Deputy Attorney General. He is also a former law clerk to Judge Richard Posner of the U.S. Court of Appeals (7thCir). See, WCP release.
1/29. Matthew Kaminer joined the Washington DC office of the law firm of Fulbright & Jaworski as a senior associate. He focuses on intellectual property, information technology and corporate matters. See, FJ release.
1/30. Riaz Karamali joined the Menlo Park office of the law firm of Perkins Coie as a partner. He focuses on corporate finance, mergers and acquisitions, and venture capital transactions for technology companies and investors in such companies. He was previously a partner with General Counsel Associates in Mountain View, California. Before that, he an associate with the law firm of Gibson Dunn & Crutcher. See, PC release.
1/28. Ernest Kelly will retire as President of the Association of Communications Enterprises (ASCENT) on April 30, 2002. His replacement has not been named. See, release.
More News
2/1. The FCC now has a web page for its Homeland Security Policy Council (HSPC).
2/1. The U.S. Court of Appeals (8thCir) issued its opinion [PDF] in Mitchell Green v. Ameritrade, a case involving preemption and jurisdiction under the Securities Litigation Uniform Standards Act (SLUSA).
2/1. The Copyright Office published a notice in the Federal Register listing the arbitrators eligible for service on a Copyright Arbitration Royalty Panel (CARP) during 2002 and 2003. See, Federal Register, February 1, 2002, Vol. 67, No. 22, at Pages 5000 - 5001.
Monday, Feb 4
The House will meet in pro forma session only. The Senate will meet at 1:00 PM to take up S 622, the Adoption Tax Credit Act.
9:00 AM. The Cato Institute will release a study titled "The Digital Dirty Dozen" which lists and evaluates the worst high tech legislative proposals of this Congress. The speakers will be Wayne Crews and Adam Thierer. This study will be released at an invitation only press breakfast. For more information, contact Jerry Brito at 202 218-4621. Location: Cato, 1000 Massachusetts Ave., NW.
10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Telecom Technical Services v. Siemens Rolm. Plaintiffs sued Seimens Rolm alleging violation of federal antitrust laws; they alleged monopolization of alleged markets for telecom equipment; they also sought class action status. Seimens asserted various counterclaims, including patent infringement. The U.S. District Court (NDGa) denied class action status. (This is Appeals Court No. 01-5090 and D.C. No. 95-CV-549-WBH.) Location: Courtroom 201, 717 Madison Place, NW.
10:00 AM. The House Judiciary Committee will hold a hearing on HR 2341, the Class Action Fairness Act of 2001, sponsored by Rep. Bob Goodlatte (R-VA). Location: Room 2141, Rayburn Building.
Deadline to submit petitions and comments to the FCC's Cable Services Bureau regarding the applications of Hughes Electronics Corporation and EchoStar Communications Corporation to the FCC requesting consent to the transfer of control of licenses and authorizations involved in the EchoStar DirecTV merger. See, FCC notice [MS Word]. Oppositions and responses are due by February 25, 2002. This is CS Docket No. 01-348.
Tuesday, Feb 5
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 several non tech related bills under suspension of the rules.
9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in EchoStar v. FCC, No. 01-1032. Judges Ginsburg, Edwards and Sentelle will preside.
RESCHEDULED FOR FEB 12. 12:15 PM. The FCBA's Transactional Practice Brown Committee will host a brown bag lunch on wireless transactions.
1:30 PM. The U.S. International Telecommunication Advisory Committee (ITAC) will hold a meeting. See, notice in Federal Register, October 17, 2001, Vol. 66, No. 201, Page 52825. Location: State Department.
2:30 PM. The Senate Finance Committee will hold a hearing to hear testimony on the President's FY 2003 budget and tax proposals. Treasury Secretary Paul O'Neill will testify. Location: Room 215, Dirksen Building.
4:00 PM. The Cato Institute will host a book forum on Against the Dead Hand: The Uncertain Struggle for Global Capitalism [Amazon], by Brink Lindsey (Cato Institute). The commenters will be Robert Zoellick (USTR), Sebastian Mallaby (Washington Post), and Douglas Irwin (Dartmouth). See, online information and registration page. Location: The Cato Institute, 1000 Massachusetts Ave., NW.
5:30 PM. The House Rules Committee will meet to adopt a rule for consideration of HR 3394, the Cyber Security Research & Development Act.
Deadline to submit applications to the NTIA for planning and construction grants for public telecommunications facilities under the Public Telecommunications Facilities Program (PTFP) for FY 2002. See, notice in Federal Register, November 20, 2001, Vol. 66, No. 224, at Pages 58301 - 58310.
Wednesday, Feb 6
The House will meet at 10:00 AM. It may take up HR 3394, the Cyber Security Research and Development Act, sponsored by Rep. Sherwood Boehlert (R-NY). The House Science Committee approved the bill on December 12, 2001, by a unanimous voice vote. The bill would authorize the funding of new research and education programs pertaining to cyber security. See, TLJ Alert No. 323, Dec. 7, 2001.
10:00 AM. The Senate Finance Committee will hold a hearing titled Ongoing U.S. Trade Negotiations. The scheduled witnesses are Robert Zoellick (USTR), Gary Broyles (National Association of Wheatgrowers), George Scalise (Semiconductor Industry Association), and Arthur Wainwright (National Association of Manufacturers). See, release [PDF]. Location: Room 215, Dirksen Building.
10:00 AM - 12:00 NOON. The FCC's Advisory Committee for the 2003 World Radiocommunication Conference (WRC-03) will meet.  Location: FCC, 445 12th Street, SW, Room TWC305 (Commission Meeting Room), Washington DC. This meeting had previously been scheduled for January 30. See, FCC notice of postponement [PDF].
12:15 PM. The FCBA's Online Committee will host a brown bag lunch. RSVP to Scott Harris at sharris
2:00 PM. The FTC and the Antitrust Division of the Department of Justice (DOJ) will hold the first of a series of joint hearings on antitrust and intellectual property. The hearings are titled "Competition and Intellectual Property Law and Policy in the Knowledge Based Economy". The speakers at the opening hearing will be Timothy Muris (FTC Chairman), Charles James (Assistant Attorney General for the Antitrust Division), James Rogan (Director of the USPTO), Judge Pauline Newman (U.S. Court of Appeals for the Federal Circuit), Robert Pitofsky (Professor at Georgetown University Law Center), Todd Dickinson (Howrey Simon), Gerald Mossinghoff (Oblon Spivak), Richard Gilbert (Professor at U.C. Berkeley), and Richard Levin (President of Yale). See, FTC release and DOJ release. Location: Room 432, FTC, 600 Pennsylvania Ave., NW.
Deadline to submit comments to the FCC regarding Verizon's Section 271 application to provide in region interLATA services in the state of Vermont. See, FCC notice [PDF]. This is CC Docket No. 02-7.
Extended deadline to submit additional comments to the Copyright Office in response to its March 9, 2001, Notice of Inquiry concerning the interpretation and application of the copyright laws to certain kinds of digital transmissions of prerecorded musical works in light of an agreement between the Recording Industry Association of America (RIAA), the National Music Publishers Association (NMPA), and The Harry Fox Agency (HFA). See, 17 U.S.C. § 115. See, notice in Federal Register. This is Docket No. RM 2000-7B.
Thursday, Feb 7
The House will meet at 10:00 AM. It may take up HR 3394, the Cyber Security Research and Development Act, sponsored by Rep. Sherwood Boehlert (R-NY).
10:00 AM. The Senate Judiciary Committee has scheduled an executive business meeting. Location: Room 226, Dirksen Building.
12:30 PM. Tom Ridge, Director of the Office of Homeland Security will speak at a luncheon. Location: Ballroom, National Press Club, 529 14th St. NW, 13th Floor.
Friday, Feb 8
The House will not be in session.
9:00 AM - 12:30 PM. The FTC and the Antitrust Division of the Department of Justice (DOJ) will hold the second in a series of joint hearings on antitrust and intellectual property. There will be two concurrent sessions, titled "Patent Law for Antitrust Lawyers" and "Antitrust Law for Patent Lawyers". See, FTC release and DOJ release. Location: Rooms 432 and 332, respectively, of the FTC, 600 Pennsylvania Ave., NW.
TO BE DECIDED ON THE BRIEFS. 9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Chameleon Radio Corp v. FCC, No. 00-1546. Judges Edwards, Sentelle and Silberman will preside.
10:00 AM - 12:00 NOON. The American Enterprise Institute (AEI) will host a panel discussion titled "Should the Government Promote Open Source Software? " The speakers will be Robert Hahn (AEI-Brookings Joint Center), James Bessen (Research on Innovation), David Evans (NERA), Lawrence Lessig (Stanford University), and Craig Mundie (Microsoft). See, online registration page. Location: 12th Floor, AEI, 1150 17th Street, NW.
10:00 AM. Chris Murck, Chairman of the American Chamber of Commerce in China, will speak on the U.S. relationship with China after the September 11 events, and in advance of President Bush's trip to Beijing on February 21. He will also comment on China's membership into the WTO and its likely impact on the global marketplace. For more information, contact Micaela de Leon Vivero at mdeleon or 202 778-1024. Location: Murrow Room, National Press Club, 529 14th St. NW, 13th Floor.
12:15 PM. The FCBA's Wireless Telecommunications Practice Committee will host a lunch. The topic will be "Hot Wireless Issues on the Hill". The price to attend is  $15.00. RSVP to Wendy Parish at by 12:00 NOON on February 6. Location: Sidley & Austin, Room 6-E, 1501 K Street, NW.
Sixth Anniversary of passage of the Telecommunications Act of 1996.
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