|FTC Issues Opinion Letter
Re Web Based Physician Joint Venture
|2/21. The Federal Trade
Commission's (FTC) Bureau of Competition
(BOC), which enforces federal antitrust laws, issued a non
letter to MedSouth Inc. regarding its plan to operate a
nonexclusive physician network joint venture. The joint
venture will include an extensive web based clinical data
record system. The letter states that the BOC sees no reason
to challenge the program. See also, FTC release.
MedSouth. MedSouth is a multi specialty physician
practice association located in the southern part of Denver,
Colorado. It has formed a joint venture with consultants, a
health care information technology service provider, and a
national clinical laboratory.
Joint Venture. The opinion letter describes the
program: "It will have two major parts: (1) a web based
electronic clinical data record system that will permit
MedSouth physicians to access and share clinical information
relating to their patients; and (2) the adoption and
implementation of clinical practice guidelines and performance
goals relating to the quality and appropriate use of services
provided by MedSouth physicians. All physicians contracting
through MedSouth will be required to participate in these
activities. With these systems, MedSouth believes it will be
able to improve and standardize members' treatment of specific
diagnoses and their fulfillment of standards of care; reduce
medical errors and improve patient care outcomes; permit its
members to provide their services more efficiently and to
reduce the aggregate long term cost of physician services; and
demonstrate to payers, employers, and others that the
integrated and coordinated delivery of services by primary
care and specialist physicians can improve the quality and
delivery of physician services."
Data System. The letter also elaborates on the data
system: "The web based clinical data record system is
intended to permit MedSouth members rapidly to access and
exchange clinical information relating to patients, including
lab and radiological reports, transcribed patient records and
office visit information, treatment plans, and prescription
information. The doctors will be able to order prescriptions
on line, and at a future time will be able to determine
whether the patient filled the prescription. The system can
aggregate data from multiple doctors to show, for example, the
trend of results on tests done at different times and places.
In the future, data relating to hospital discharges and
procedures also may be included. MedSouth expects this system
to reduce duplicative testing and procedures, speed up
treatment, decrease medical errors and adverse drug
interactions, and facilitate communication and coordination of
services among referring and referral physicians. Each
practice will acquire the hardware necessary to use the
Sale of Services to Health Plans. The letter also
states that "MedSouth proposes to offer the medical
services of its participating members pursuant to this program
to commercial third party payers, and to negotiate and execute
contracts under which MedSouth members would provide services
to health plan enrollees."
Nonexclusive Network. MedSouth will operate as a
nonexclusive network. Its physicians will be available
individually to negotiate and contract with customers not
wishing to purchase the network services.
BOC Conclusion. The BOC concluded that "the
proposed program appears to have the potential to improve the
quality and effectiveness of health care services that are
delivered to patients, and thus to provide important benefits
to consumers. ... we have concluded that we would not
recommend a challenge to MedSouth fully implementing the
program and then offering it to payers on a collective basis.
As long as doctors are, in fact, willing to deal individually
on competitive terms with payers who do not want the package
product, as you represent will be the case, significant
anticompetitive effects appear unlikely."
|SEC Files Insider Trading
|2/21. The Securities and
Exchange Commission (SEC) filed a civil complaint
in U.S. District Court (NDGa)
against John Fitzgerald alleging violation of federal
securities laws. The complaint alleges that Fitzgerald engaged
in insider trading in CheckFree
Holdings Corporation securities, in violation of Section
10(b) of the Securities Exchange Act of 1934, 15 U.S.C.
§ 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. 240.10b-5.
The complaint alleges that "On February 2, 2000, an
executive officer of CheckFree told Fitzgerald that CheckFree
had agreed to merge with TransPoint, a joint venture of Microsoft Corporation,
First Data Corporation, and Citibank". The complaint
further alleges that "Between February 9, 2000, and
February 15, 2000, Fitzgerald purchased a total of 5,857
shares of CheckFree stock on three separate days, including
the day of the merger announcement, at an average price of
$64.54 per share. ... On February 18, 2000, the third day
after the merger was announced, Fitzgerald sold 5,000 shares
at an average price of $82.085 per share."
This is D.C. No. 1:02-CV-489. See also, SEC
|DOJ Recommends Approval of
Verizon's Vermont 271 Application
|2/21. The Department of Justice's (DOJ) Antitrust Division
submitted an evaluation
[PDF] to the Federal
Communications Commission (FCC) recommending that the FCC
application to provide in region interLATA services in the
state of Vermont, pursuant to 47 U.S.C.
The DOJ wrote that "Verizon has generally succeeded in
opening its local markets in Vermont to competition and
recommends approval of Verizon's application for Section 271
authority in Vermont ..." However, the DOJ urged the FCC
to look carefully at Verizon's pricing of unbundled network
elements, to determine whether they are cost based.
Verizon has already obtained FCC approval to provide long
distance services in Massachusetts, Pennsylvania, Connecticut,
and New York. This is CC Docket No. 02-7. See also, DOJ
release and Verizon
|California Supreme Court To
Review DeCSS Case
|2/20. The Supreme
Court of the State of California ordered review of the
Court of Appeal decision in DVD Copy Control Association v. Bunner,
a case regarding California trade secret law, and the
publication of the DeCSS program in web sites. The Santa Clara
County Superior Court issued a preliminary injunction. On
November 1, 2001, the California
Court of Appeal (6th) issued its opinion
reversing that injunction. See, Conference
Results [PDF], February 20, 2002, at page 1.
Plaintiff. DVD is sometimes known as Digital Versatile
Disc. CSS is a Content Scrambling System for DVD to protect
intellectual property rights by means of encryption. The DVD
Copy Control Association (DVDCCA) is a trade association of
businesses in the movie industry. It controls the rights to
CSS. DVDCCA licenses the CSS decryption technology to
manufacturers of hardware and software for playing DVDs.
Defendant. DeCSS is a decryption tool that facilitates
infringement. DeCSS consists of computer source code which
describes a method for playing an encrypted DVD on a non CSS
equipped DVD player or drive. It was written by Jon Johansen,
a 15 year old Norwegian. Andrew Bunner published a copy of
DeCSS on a web site.
Complaint. The DVDCCA filed a complaint in 1999 in
California Superior Court against Andrew Brunner and others
alleging violation of the California Uniform Trade Secrets Act
in connection with their publishing copies of DeCSS in web
sites, or linking to copies of DeCSS.
Preliminary Injunction. The Superior Court issued an
order granting a preliminary injunction in January 2000 which
enjoined defendants from "[p]osting or otherwise
disclosing or distributing, on their web sites or elsewhere,
the DeCSS program, the master keys or algorithms of the
Content Scrambling system (‘CSS’), or any other
information derived from this proprietary information."
The Court of Appeal. The Court of Appeal reversed. It
reasoned that the DeCSS source code is speech entitled to
First Amendment protection. It also noted that unlike
copyright, trade secret protection is not secured by the
Constitution. The Court of Appeal further reasoned that the
Superior Court order constituted a prior restraint of pure
Supreme Court. On February 20, 2002, the state Supreme
Court agreed to hear the case. It did not issue an opinion; it
did not set a date for oral argument. This is Supreme Court
|Economist Estimates Costs
of Nine States' Microsoft Remedy
Liebowitz, Professor of Economics at the Management School
of the University of Texas
at Dallas, released a study
[PDF] titled "Swiss Cheese Windows: Estimating Some Costs
of the Nine State Remedy". He assesses the affect of the
proposal of the nine states that have not joined in the
Microsoft antitrust settlement. He asserts that requiring
Microsoft to remove middleware code from Windows operating
system could cost software producers as much as $80 Billion
over three years.
Liebowitz wrote that "While these nine states have
dropped the proposal to break-up Microsoft, they have instead
proposed a remedy that pokes enough holes in the Windows
platform to suggest the Swiss cheese analogy. One key element
of their proposed remedy relates to the replacement of
middleware components of the Windows operating system. These
states would have Microsoft completely remove its middleware
code from Windows at the request of a computer manufacturer or
third party licensee. The effects of this proposed remedy, if
it were implemented, would be felt by many in the information
technology (IT) industry -- software developers, service
firms, resellers, business users and consumers."
He concluded that "PC software producers would incur as
much as $30 billion to $80 billion over the next three years
in development, testing, marketing, and support costs. This
extra cost is due to software developers having to adapt their
software to new middleware they might not prefer because there
is no safety net middleware they can always count on being
available to all Windows computer users." Moreover, wrote
Liebowitz, "Consumers pay either way -- higher prices,
fewer choices of software, less certainty that software they
buy will run properly."
|George Bush and Jiang Zemin
|2/21. President Bush and Chinese President Jiang Zemin held
a joint press conference in Beijing, PR China. They addressed
many topics, including trade. See, transcript.
President Jiang stated that "We have agreed to vigorously
carry out bilateral exchanges and cooperation in such areas as
economy and trade, energy, science and technology,
environmental protection, the prevention of HIV/AIDS, and law
enforcement, conduct strategic dialogue on regional economic
and financial matters, and hold within the year meetings of
the Joint Economic Commission, Joint Commission on Commerce
and Trade, and Joint Commission on Science and
President Bush stated that "China as a full member of the
WTO will now be a full partner in the global trading system,
and will have the right and responsibility to fashion and
enforce the rules of open trade. ... I believe equally
dramatic changes lie ahead. These will have a profound impact
not only on China itself, but on the entire family of nations.
And the United States will be a steady partner in China's
historic transition toward greater prosperity and greater
|2/21. Treasury Secretary Paul
O'Neill gave a speech
at the U.S. Chamber of
Commerce in Washington DC regarding the administration's
economic and budget priorities.
2/20. Lincoln Bloomfield, Assistant Secretary of State for
Political Military Affairs, gave a speech
regarding the State Department's portion of the export control
system at an American Institute
of Aeronautics and Astronautics (AIAA) conference. He is
responsible for the State Department's Office of Defense Trade
Controls (DTC). He also discussed the upgrading of the DTC's
information technology infrastructure. He stated that
"Our plan is to initiate a six month beta test of a fully
electronic licensing program in the coming weeks ..."
2/21. The U.S.
Court of Appeals (9thCir) issued its opinion
[PDF] in US
Cellular v. GTE Mobilnet, a case regarding
interpretation of a 1982 limited partnership agreement
pertaining to cellular telephone service in the Los Angeles
area. The District Court held that the agreement had not been
breached. The Appeals Court affirmed.
|Friday, Feb 24
|The House and Senate are in recess this week.
10:00 AM. The 21st Century IP Coalition, a group of companies
and associations concerned with USPTO fees and funding, will
hold a meeting. For information call Wayne Paugh in the IPO
office at 202 521-6717.
|Monday, Feb 25
|The Senate will reconvene at 12:00 NOON following its
Presidents Day recess. The House will not be in session.
Deadline to submit oppositions and responses 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,
[MS Word]. This is CS Docket No. 01-348.
4:00 PM. Deadline for Members of the House to submit to the House Rules Committee
proposed amendments to HR
1542, the Tauzin Dingell bill. See, Cong. Rec., Feb. 7,
2002, at H217.
6:30 PM. The National Press
Club will host a panel discussion on distance learning.
The topics to be discussed include copyright issues. The
speakers will be Deborah Everhart (Blackboard.com) and Martin
Irvine (Georgetown University). Coffee reception starts at
6:30 PM. The program starts at 7:15 PM, and is scheduled to
finish at 9:00 PM. Location: NPC, 529 14th St. NW, 13th Floor.
|Tuesday, Feb 26
|The House will reconvene at 2:00 PM following its Presidents
12:15 PM. The Federal
Communications Bar Association's (FCBA) Cable Practice
Committee and the National Cable & Telecommunications
Association (NCTA) will host a luncheon. The speaker will be
Sarah Whitesell, Associate Bureau Chief of the FCC's Cable Services Bureau. The
price to attend is $15. RSVP to Wendy Parish at email@example.com. Reservations
and cancellations must be received by Friday, February 22.
Location: 1724 Massachusetts Avenue, NW.
1:00 - 4:00 PM. Rep.
Gil Gutknecht (R-MN), Vice Chairman of the House Science Committee,
will hold a "Technology and Terrorism
Demonstration". Location: Room 2318, Rayburn Building.
4:00 PM. The House
Judiciary Committee's Subcommittee on Crime will mark up HR
3482, the "Cyber Security Enhancement Act of
Lamar Smith (R-TX), the Chairman of the Subcommittee, and
the sponsor of the bill, will likely offer an amendment
in the nature of a substitute. Location: Room 2237,
Deadline to submit reply comments to the Federal Communications Commission
(FCC) in the matter of Ambient's application for a
determination that it is an exempt telecommunications company.
It is an electric power company that also provides broadband
Internet access and related information services over power
lines to electrical outlets in residences. See, FCC
|Wednesday, Feb 27
|Day one of a two day conference titled "Combatting
Cyber Attacks on Your Corporate Data". See, conference information
page. Location: Omni Shoreham Hotel.
10:00 AM. The Senate
Judiciary Committee will hold a hearing to examine sovereign
immunity and the protection of intellectual property. Sen. Patrick Leahy (D-VT)
will preside. Location: Room 226, Dirksen Building.
6:00 - 8:00 PM. The Federal
Communications Bar Association (FCBA) will host a
Continuing Legal Education (CLE) seminar titled
"Unlicensed Operation Under FCC Rules". The price to
attend is $60 for FCBA members, $50 for government and law
student members, and $80 for non-members. Registrations and
cancellations due by 12:00 NOON on Tuesday, February 26. To
register, contact Wendy Parish at wendy @fcba.org. Location:
Capital Hilton Hotel, 16th & K Streets, NW.
Extended deadline to submit reply 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, January 31, 2002, Vol. 67, No. 21, at
Pages 4694 - 4695. This is Docket No. RM 2000-7B.
|Thursday, Feb 28
|Day two of a two day conference titled "Combatting
Cyber Attacks on Your Corporate Data". See, conference information
page. Location: Omni Shoreham Hotel.
12:15 PM. The Federal
Communications Bar Association's Transactional Practice
Committee will host a brown bag lunch on mass media
transactions. RSVP to Sue Fischer at 202 776-2000. Location: Dow Lohnes & Albertson,
1200 New Hampshire Aveune, NW.
4:00 PM. Adam
Mossoff (Professor at Northwestern University School of
Law) will give a lecture titled "The Relevance of Natural
Rights in Intellectual Property Today". For more
information, contact Prof. Robert Brauneis at firstname.lastname@example.org
or 202 994-6138. Location: George Washington University Law
School, 2000 H Street, NW.
6:30 - 8:30 PM. FCC Commissioner Michael Copps
will speak at a Federal
Communications Bar Association (FCBA) reception on
"the value of mentoring in building a career."
Location: Kelley Drye & Warren, 1200 19th Street, NW.
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