Tech Law Journal Daily E-Mail Alert
April 1, 2002, 9:00 AM ET, Alert No. 400.
TLJ Home Page | Calendar | Subscribe | Back Issues
DoubleClick Settles Class Action Suits
3/29. Double Click and plaintiffs in various lawsuits against Double Click announced that they have reached an agreement to settle all the federal and state class action privacy litigation against Double Click. See, Double Click release.
Also, the U.S. District Court (SDNY) issued a notice of settlement which summarizes the requirements imposed upon Double Click by the agreement. This notice states that "DoubleClick's privacy policy will include easy to read explanations of specified aspects of DoubleClick's online ad serving services. DoubleClick will institute internal polices to ensure the protection and routine purging of data collected online. DoubleClick will conduct a public information banner ad campaign, consisting of 300 million banner advertisements, to invite consumers to learn more about how to protect their privacy on the Internet. New DoubleClick ad serving cookies served to Internet users' browsers will expire no more than five (5) years after the date on which each cookie is served. An Internet user's online data collected by DoubleClick under one version of its privacy policy will not be used in a manner materially inconsistent with that privacy policy, unless DoubleClick has that Internet user's permission to do otherwise. DoubleClick will take steps to require that a successor in interest does not use Internet users' online data collected by DoubleClick in a manner inconsistent with the privacy policy under which that data was collected. If DoubleClick collects personally identifiable information, such information will only be merged with previously collected clickstream from across Web sites under specified conditions, including clear and conspicuous notice and opt-in by the Internet user. A national independent accounting firm will conduct two annual reviews of DoubleClick's compliance with specified settlement."
The Electronic Privacy Information Center (EPIC) called the settlement "anti consumer". For example, it wrote that "The agreement will, among other things, require future DoubleClick cookies to expire within 5 years, two years after the typical user has changed computers."
GAO Report Details Conversions from Political Appointee to Civil Service
3/28. The General Accounting Office (GAO) released a report [PDF] titled "Personnel Practices: Career and Other Appointments of Former Political Appointees, October 1998 - April 2001".
The GAO studied 45 federal agencies, and found that "111 former political appointees and congressional employees converted to career and other positions from October 1, 1998, through April 30, 2001. According to the agencies, 100 of these employees converted from political appointments and 11 employees converted from congressional staff positions." The report also found that 24 of these conversions took place at the Justice Department.
The report focused on whether "the individuals received political favoritism or an unfair advantage in the merit system selection process", and whether the merit system has been compromised.
Political appointees may be terminated at any time, and generally leave their positions at the end of an administration. Civil service employees cannot be terminated. Outgoing administrations convert some political appointees into permanent civil service employees to influence policy after the end of the administration, and to burrow in officials with policy objectives contrary to those of the incoming administration.
The report, which focuses on conversions late in the Clinton administration, was requested by three Republicans: Rep. James Sensenbrenner (R-WI), Chairman of the House Judiciary Committee, Sen. Christopher Bond (R-MO), the ranking member of the Senate Small Business Committee, and Rep. Dave Weldon (R-FL), Chairman of the House Subcommittee on Civil Service and Agency Organization.
People and Appointments
3/29. President Bush appointed Michael Toner to be a member of the Federal Election Commission (FEC). This is a recess appointment. Toner is Chief Counsel to the Republican National Committee (RNC). He was previously General Counsel to the Bush Cheney Transition and Bush Cheney 2000. From 1997 to 1999, he was Deputy Counsel to the RNC. In 1996, he was Counsel to the Dole Kemp campaign. He was an associate with the Washington DC law firm of Wiley Rein & Fielding (WRF) from 1992 to 1996. WRF is representing Sen. Mitch McConnell (R-KY) in his lawsuit challenging the constitutionality of the campaign finance bill signed by President Bush last week. See, White House release.
3/27. Computer Associates (CA) elected Walter Schuetze, a former Chief Accountant to the Securities and Exchange Commission (SEC), and Jay Lorsch, a professor at the Harvard Business School, to its Board of Directors. Linus Cheung, Deputy Chairman of Pacific Century CyberWorks, resigned from the Board. See, CA release.
3/29. Tracy Edmonson was named chair of the San Francisco Corporate Department of the law firm of Latham & Watkins. She succeeds Scott Haber, who will continue as a member of the firm's Executive Committee. See, LW release.
3/19. John Bruckner joined the Austin office of the law firm of Gray Cary. He was previously counsel in the Austin office of Fulbright & Jaworski. He is a patent attorney who focuses on software, electronics and materials science industry. See, Gray Cary release.
3/19. Neal Dittersdorf joined the Washington DC office of the Venable law firm as counsel in the Business Transactions and Corporate Technology practices. He focuses on information technology, outsourcing, software, e-commerce and other technology matters. See. Venable release.
3/19. James Miller joined the Washington DC office of the the law firm of Howrey Simon law firm as head of its Capitol Consulting group. He was Chairman of the Federal Trade Commission (FTC) during the first Reagan administration, and Director of the Office of Management and Budget (OMB) during the second Reagan administration.
Rep. Schiff Plans to Introduce Copy Protection Bill in House
3/27. Rep. Adam Schiff (D-CA) wrote a letter to members of the House of Representatives in which he stated that "I plan to introduce legislation that would safeguard digital content by spurring the rapid development of copyright protection technology. Similar legislation, S. 2048, has been introduced in the Senate by Senators Hollings, Stevens, Inouye, Breaux, Nelson and Feinstein. I believe this is a necessary step and I encourage you to join me in this effort."
Rep. Schiff stated that this bill "would encourage demand for broadband Internet service and protect creative enterprise from the threat of digital piracy." He elaborated that demand for broadband Internet access is "severely lacking. This is simply because consumers can't get what they want -- high quality digital content like movies, music, and video games."
"Our nation's creative enterprises have been hesitant to offer their products over the Internet out of fear of piracy -- intellectual theft," wrote Rep. Schiff.
7th Circuit Rules on FCC Ban on Sale of Phone Numbers
3/28. The U.S. Court of Appeals (7thCir) issued its opinion in Jahn v., a case regarding the FCC's ban on the sale of telephone numbers. The Appeals Court held that this FCC rule does not apply to transactions that occurred prior to its promulgation in 1997.
Background. Curtis Jahn and others formed a corporation named 800-FLOWER, Inc. to sell flowers over the phone. It used the phone number 800 356-9377, which had been assigned by AT&T. Jahn took both an equity stake in the corporation, and a royalty interest in revenues derived from phone sales. Subsequent corporate reorganizations transferred the firm's assets to a Texas corporation, and later to a New York corporation which is a defendant in the present action. Jahn gave up his equity interest, but retained his royalty interest. (The controlling 1986 agreement contained a choice of law clause designating Texas law.) The company now sells by phone and through a web site.
The Regulation. 47 C.F.R. § 52.107(a), promulgated in 1997 by the Federal Communications Commission (FCC), provides, in part, that "... hoarding is the acquisition by a toll free subscriber from a Responsible Organization of more toll free numbers than the toll free subscriber intends to use for the provision of toll free service. The definition of hoarding also includes number brokering, which is the selling of a toll free number by a private entity for a fee. (1) Toll free subscribers shall not hoard toll free numbers. (2) No person or entity shall acquire a toll free number for the purpose of selling the toll free number to another entity or to a person for a fee. ..." Prior to 1997, subscribers did not own phone numbers assigned to them. Carriers could change numbers without liability to their subscribers.
District Court. Jahn filed a complaint in U.S. District Court (WDWisc) against 1-800-, Inc. and others alleging failure to pay his full royalty under the 1986 agreement. (Jurisdiction in the case was based upon diversity of citizenship. The District Court applied Texas law.) Defendants alleged that such payment is illegal under the FCC rule. The District Court held that the royalty interest reflects at least in part the value of the phone number, and constitutes a proscribed sale under the FCC rule. The District Court did not address whether the FCC rule applies retroactively. However, it ruled that the ongoing payment is itself illegal, and defendants are therefor excused from further payment because Texas law treats illegality as a form of impossibility that constitutes a defense to non-performance. Jahn appealed.
Appeals Court. The Appeals Court reversed. Jahn is not barred from recovering royalties by this FCC regulation. However, the opinion is narrowly based on retroactivity. The Appeals Court noted at the outset that "The regulation shows that phone numbers cannot be treated like Internet domain addresses, which regularly are sold outright for a fee ..."
First, the Court held that "Federal regulations do not, indeed cannot, apply retroactively unless Congress has authorized that step explicitly." Reasoning by analogy, the Court wrote that "broadcast licenses may be sold despite the mantra that the airwaves are a public resource. If broadcast licenses may be sold even though they are not ``property´´ of the licensees, then telephone numbers could be sold until 1997 even though they, too, are not the subscribers' property. Jahn could not have compelled at&t to transfer the number to 800-Flowers (Wisconsin), but it proved willing to do so, and no rule of federal law in force at the time prevented the firm from compensating Jahn for his assistance in securing this transfer."
Second, the Court held that royalty payments made pursuant to the pre 1997 transaction are likewise unaffected by the rule. It wrote that "the regulation concerns future sales, not compensation for older and thus lawful sales."
Frank Easterbrook, a leader of the "Chicago school" free market approach to judicial interpretation, wrote the opinion on this market banning regulation. He added that "Moving assets to higher and better uses is an important goal of any economic system." He may be under consideration by President Bush for appointment to the Supreme Court.
More News
3/21. Sen. Richard Durbin (D-IL) introduced S 2062, titled the Comprehensive Trade Negotiating Authority Act of 2002.
3/27. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Bennett v. Medtronic, a case regarding covenants not to compete.
About Tech Law Journal
Tech Law Journal publishes a free access web site and subscription e-mail alert. The basic rate for a subscription to the TLJ Daily E-Mail Alert is $250 per year. However, there are discounts for entities with multiple subscribers. Free one month trial subscriptions are available. Also, free subscriptions are available for law students, journalists, elected officials, and employees of the Congress, courts, and executive branch, and state officials. The TLJ web site is free access. However, copies of the TLJ Daily E-Mail Alert and news items are not published in the web site until one month after writing. See, subscription information page.

Contact: 202-364-8882; E-mail.
P.O. Box 4851, Washington DC, 20008.
Privacy Policy
Notices & Disclaimers
Copyright 1998 - 2002 David Carney, dba Tech Law Journal. All rights reserved.
Monday, April 1
The House and Senate are both in recess for the Spring District Work Period. Both bodies will return on Monday, April 8.
The Supreme Court of the U.S. is on recess until Monday, April 15.
The USTR will hold a hearing regarding negotiation of a U.S. Singapore Free Trade Agreement. The USTR stated in its notice in the Federal Register that the agreement is "expected to include provisions on trade in services, investment, trade related aspects of intellectual property rights, competition, government procurement, electronic commerce, trade related environmental and labor matters, and other issues."
10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Philip Jackson v. Casio PhoneMate, No. 01-1456, a patent infringement case involving telephone answering machines. The U.S. District Court (NDIll) granted summary judgment to Casio. Location: Courtroom 201, LaFayette Square, 717 Madison Place, NW.
EXTENDED TO APRIL 22. Deadline to file reply comments with the FCC in response to its notice of proposed rulemaking (NPRM) regarding the appropriate regulatory requirements for incumbent local exchange carriers' (ILECs') provision of broadband telecommunications services. The FCC adopted this NPRM at its December 12 meeting. This is CC Docket No. 01-337. See, notice in the Federal Register. See, Order [PDF] extending deadline to April 22.
Deadline to submit written requests to participate as a panelist in the workshop to be hosted by the FTC on May 16 and 17 to explore issues relating to the security of consumers' computers and the personal information stored in them or in company databases. See, notice in Federal Register.
Tuesday, April 2
10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Netscape Communications v. Allen Konrad, No. 01-1455. Location: Courtroom 201, LaFayette Square, 717 Madison Place, NW.
1:00 PM ET. The FTC will hold a press conference to announce an international law enforcement initiative targeting deceptive spam and Internet fraud. See, FTC release. Location: the press conference will be held at the FTC office at 915 Second Ave., Suite 2896, Seattle, Washington. There will be a video link at the FTC headquarters, 600 Pennsylvania Ave., NW, Room 481.
2:00 PM. The Institute for Health Freedom will hold a press conference regarding medical privacy. For more information, contact Sue Blevins at 202 429-6610. Location: Lisagor Room, National Press Club, 529 14th St. NW, 13th Floor.
Wednesday, April 3
10:00 AM. A group of trade associations will hold a press conference to announce the formation of a group named the High Tech Broadband Coalition. The speakers will be Robert Holleyman (BSA), Gary Shapiro (CEA), Jerry Jasinowski (NAM), George Scalise (SIA), and Matthew Flanigan (TIA). For more information, contact Jeff Joseph (CEA) at 703 907-7664 or jjoseph Location: Lisagor Room, National Press Club, 529 14th St. NW, 13th Floor.
12:15 PM. The FCBA's International Practice Committee will host a brown bag lunch. The speakers will be Tom Tycz (Chief of the FCC's International Bureau's Satellite Division), James Ball (Chief of the FCC's International Bureau's Policy Division), and Kathryn O'Brien (Chief of the FCC's International Bureau's Strategic Analysis and Negotiations Division). RSVP to Laurie Sherman at 202 223-7365 or Patricia Paoletta at 202 719-7532. Location: FCC, 445 12th Street, SW, Conference Room 6-B516.
Thursday, April 4
8:30 AM - 5:30 PM. Day one of a two day event hosted by the NTIA titled "Spectrum Summit". The summit will address spectrum allocation and efficiency, the spectrum requirements of new technologies, and regulatory processes. See, NTIA notice and notice in Federal Register. Location: auditorium, Department of Commerce, 1401 Constitution Ave., NW.
2:00 - 4:00 PM. There will be a meeting of the FCC's Advisory Committee for the 2003 World Radiocommunication Conference. See, FCC notice [PDF], and notice in Federal Register. Location: FCC, Commission Meeting Room, Room TW-C305, 445 12th Street, SW.
4:00 PM. Dan Burk (Professor, Univ. of Minnesota Law School) will give a lecture titled "Anti Circumvention Misuse". He will review the history of the equitable misuse doctrine in the context of patents and copyrights, and argue that the DMCA anti circumvention right is a new form of intellectual property that should be subject to the equitable misuse doctrine. For more information, contact Prof. Robert Brauneis at rbraun or (202) 994-6138. Location: The George Washington Univ. Law School 720 20th Street, NW.
Friday, April 5
8:30 AM - 4:15 PM. Day two of a two day event hosted by the NTIA titled "Spectrum Summit". The summit will address spectrum allocation and efficiency, the spectrum requirements of new technologies, and regulatory processes. See, NTIA notice and notice in Federal Register. Location: Ronald Reagan International Trade Center, 1300 Pennsylvania Ave., NW.
9:00 AM. The FCC's electronic filing systems will be shut down for maintenance purposes. This shut down will last through 1:00 PM on April 7. See, FCC notice.
9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Global Naps Inc v. FCC, No. 01-1192. Judges Edwards, Roger and Tatel will preside. Location: 333 Constitution Ave. NW.
Extended deadline to submit comments to the Copyright Office in response to its Notice of Proposed Rulemaking on "the requirements for giving copyright owners reasonable notice of the use of their works for sound recordings under statutory license and for how records of such use shall be kept and made available to copyright owners." See, original notice in Federal Register, and extension notice in Federal Register.