Tech Law Journal Daily E-Mail Alert
April 9, 2002, 9:00 AM ET, Alert No. 406.
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Challenges to Source Code Copyright Registration & the Doctrine of Primary Jurisdiction
4/8. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Syntek Semiconductor v. Microchip Technology, a case in which an alleged infringer sought a declaratory judgment from the U.S. District Court that a copyright registration of computer source code is invalid. The District Court granted summary judgment to the copyright holder. The Appeals Court vacated. It held that, pursuant to the doctrine of primary jurisdiction, the case should be dismissed without prejudice, so that the infringer may seek an administrative remedy at the Copyright Office.
Background. Microchip Technology is a Delaware corporation based in Chandler, Arizona. It designs, manufactures, and sells micro controllers. Micro controllers are integrated circuits used to control a particular system or process in an electronic product. The operation of micro controllers is dictated by low level programming micro instructions called micro code, which are fixed in storage. Microchip manufactures and sells the PIC 16C5x micro controllers, which contain the PIC 16C5x micro code.
Microchip registered its PIC 16C5x micro code with the U.S. Copyright Office. However, the Appeals Court explained that "Microchip did not have in its possession the original PIC 16C5x source code when it registered its program with the Copyright Office; so Microchip deposited source code that it had decompiled from the object code embedded in the PIC 16C5x computer chip. Microchip informed the Copyright Office of the nature of its deposit". The Copyright Office then registered the copyright.
Syntek Semiconductor is a Taiwan corporation that also designs, manufactures, and sell micro controllers. Microchip asserts that Syntek products have infringed its copyright.
Taiwanese Actions. Microchip has twice presented its findings to the public prosecutor in Taiwan that Syntek has produced and sold products that infringe its copyright. In a 1993 proceeding, Syntek was indicted, but later settled with Microchip. More recently, the Taiwan prosecutor again indicted Syntek and two of its senior officers for criminal copyright infringement. The Taiwan criminal court found Syntek's officers guilty of criminal copyright infringement in April of 1999. Syntek appealed that decision.
District Court. Syntek filed a complaint in March of 1999 in U.S. District Court (DAriz) against Microchip seeking a declaratory judgment that Microchip's U.S. copyright registration of the PIC 16C5x micro code is invalid. Syntek alleges that Microchip, by depositing source code that it had decompiled from object code, did not comply with the applicable regulations when registering its program. The District Court granted summary judgment to Microchip.
Appeals Court. The Court of Appeals raised the question of primary jurisdiction, sua sponte. It vacated the judgment of the District Court and remanded with instructions to dismiss the action without prejudice pursuant to the primary jurisdiction doctrine in order that the parties may pursue appropriate administrative remedies before the Copyright Office.
The Appeals Court wrote that "Primary jurisdiction is not a doctrine that implicates the subject matter jurisdiction of the federal courts. Rather, it is a prudential doctrine under which courts may, under appropriate circumstances, determine that the initial decisionmaking responsibility should be performed by the relevant agency rather than the courts." It added that "The doctrine of primary jurisdiction is not equivalent to the requirement of exhaustion of administrative remedies."
The Appeals Court followed a four part test announced by the Ninth Circuit in U.S. v. General Dynamics Corp., 828 F.2d 1356 (9th Cir 1987). The Appeals Court wrote in the present appeal that "Although the question is a matter for the court's discretion, courts in considering the issue have traditionally employed such factors as (1) the need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory authority that (4) requires expertise or uniformity in administration."
The Court analyzed each of these four factors. On the first factor, it wrote that "Congressional intent to have national uniformity in copyright laws is clear." On the second factor, it wrote that "the question of whether decompiled object code qualifies for registration as source code under the Copyright Act and regulations is an issue of first impression. It also involves a complicated issue that Congress has committed to the Register of Copyrights."
On the third prong, the Appeals Court noted that Syntek seeks, not a declaratory judgment that the copyright in invalid, but rather a declaration that the registration is invalid. The Appeals Court wrote, "Thus, resolution of the question at hand requires an analysis of whether the agency acted in conformance with its own regulations when it granted the registration. Accordingly, referral to the agency for consideration of these issues in the first instance is particularly appropriate."
Fourth, and finally, the Court reasoned that while Syntek plead that it seeks a declaration of registration invalidity, this is indistinguishable from the administrative remedy of copyright registration cancellation. Hence, it already has an administrative remedy.
The Court concluded that all four factors are met, and hence, that dismissal pursuant to the doctrine of primary jurisdiction is appropriate.
The Court's ruling addresses only the doctrine of primary jurisdiction. The Appeals Court did not address the question of whether decompiled object code qualifies for registration as source code under the Copyright Act and regulations. Nor did it address whether a private right of action exists for cancellation of a copyright registration.
Finally, the Appeals Court added that "we need not decide ... whether remedies are available under 17 U.S.C. § 701(e)". This section pertains to the general responsibilities of the Copyright Office. See also, 17 CFR § 201.7, regarding cancellation of completed registrations by the Copyright Office.
SEC Official Addresses Privacy and Information Security
4/8. Lori Richards of the Securities and Exchange Commission (SEC) gave a speech titled "Furthering Good Compliance: Current Areas of Focus in SEC Examinations". Richards is Director of the SEC's Office of Compliance Inspections and Examinations. She spoke at the National Regulatory Services, 17th Annual Spring Compliance Conference, in Miami Beach, Florida.
She stated that "Regulation S-P, the SEC's new privacy rules, became effective last July. During our exams, we're placing particular focus on that part of the rule known as the ``safeguard rule,´´ which requires firms to have safeguards over the security of information. Our information technology staff are reviewing firms' information technology systems, including firewalls, encryption and other protections."
The SEC promulgated Regulation S-P, 17 CFR Part 248, pursuant to Section 504 of the Gramm Leach Bliley Act.
Delaware Court Denies HP Motion to Dismiss
4/8. The Delaware Chancery Court denied Hewlett Packard's (HP) motion to dismiss Walter Hewlett's complaint regarding the merger of HP and Compaq. HP issued a release in which it stated that "We remain optimistic we will be able to complete the merger on our current schedule. HP continues its progress in integration planning and looks forward to the receipt of the certified vote result from the HP shareowner meeting, which is expected within a few weeks."
Silicon Valley Representatives Seek More Funding for Chip Research
4/8. Rep. Anna Eshoo (D-CA), Rep. Zoe Lofgren (D-CA), and Rep. Michael Honda (D-CA), who represent three Silicon Valley districts, wrote a letter to Rep. Jerry Lewis (R-CA) and Rep. John Murtha (D-PA), the Chairman and ranking Democrat on the House Appropriations Committee's Subcommittee on Defense, asking that Defense Advanced Research Projects Agency's (DARPA) Focus Center Research Program (FCRP) be funded at the level of $10 Million in FY 2003.
The DARPA's web site states that the FCRP is a collaborative effort between the DARPA, the Office of the Deputy Undersecretary of Defense for Science & Technology, and the Microelectronics Advanced Research Corporation to establish centers in "Materials, Structures & Devices" and "Circuits, Systems & Software" at U.S. institutions of higher education.
The trio of Congressmen wrote that "Continuing microelectronics technology advances are increasingly difficult to make. As semiconductors become ever denser, faster, and cheaper, they approach physical limits that will prevent further progress with current chip making processes." They added that "The research conducted in this program is long range (typically eight or more years out) and is essential for the timely development of replacement technology for the current chip making process."
House Commerce Committee to Mark Up Dot Kids Bill
4/8. The House Commerce Committee has scheduled a meeting to mark up HR 3833, "Dot Kids Implementation and Efficiency Act of 2002" for Wednesday, April 10. The Subcommittee on Telecommunications and the Internet approved the bill on March 7 without amendment by a unanimous voice vote. It is sponsored by Rep. John Shimkus (R-IL), Rep. Ed Markey (D-MA), and others.
This bill provides that "The NTIA shall require the registry selected to operate and maintain the United States country code Internet domain to establish, operate, and maintain a second level domain within the United States country code domain that provides access only to material that is suitable for minors and not harmful to minors".
ACT Comments on Digital Music Copyright Issues
4/8. The Association for Competitive Technology (ACT) wrote a letter [PDF] to several members of the House Judiciary Committee, and its Court, Internet and Intellectual Property Subcommittee, regarding digital music copyright issues. It stated that "We strongly believe that the marketplace, without the assistance of additional legislation or regulation, is in the best position to respond to the demands of consumers and copyright holders."
ACT wrote that "we remain steadfast in opposing government mandated and managed technology standards". It stated that "The government should not pick winners and losers through its certification process; especially while the IT industry is working to achieve an open DRM standard." It also stated that "These standards will ``freeze´´ technology by requiring government approval of design changes. Instead of real time innovation, we could easily end up with a one size fits all standard."
ACT also commented on HR 2724, the Music Online Competition Act (MOCA), sponsored by Rep. Rick Boucher (D-VA) and Rep. Chris Cannon (R-UT). ACT wrote that "MOCA's nondiscriminatory licensing provision is tantamount to compulsory licensing. ... We believe that compulsory licensing schemes erode intellectual property rights and act as a disincentive to innovate."
However, ACT recommended that the Congress amend 17 U.S.C. § 117. It wrote that "Section 117 permits the owner of a copy of a computer program to make an additional copy of the program where the making of such a copy is an essential step in the utilization of the computer program conjunction with a much and that it is used in no other matter. Given that temporary or ``buffer´´ copies are a characteristic of most forms of streaming digital content, there is a question as to whether these copies should be precluded from liability. ACT feels that language should be added to section 117 to remove any uncertainty in this regard as it will aid in the creation of robust DRM solutions for streaming content."
IBM Touts Its DRM Software
4/8. IBM announced "new software that enables customers to digitally protect and secure copyrighted and digital content for content management, distribution and e-commerce applications. The new Electronic Media Management (EMMS) software now includes support for open standards and can secure all types of digital media, including audio, text, video, and streaming media."
IBM further asserted that with its software "Hollywood and entertainment content creators can share digital assets and assign rights to a broader range of content. In healthcare, a provider can transfer digitized patient records between doctors, without compromising the security of these protected records. Similarly, banks and financial institutions that process requests from consumers for mortgages and loans can use EMMS to protect this personal information and allow status updates and approvals to be accessed only by authorized individuals. Government agencies that generate video from surveillance technology or scanned satellite images can benefit from EMMS's rights management capability, which may be used to prevent theft, unauthorized use and access, and ensure authenticity of the content." See, IBM release [PDF].
People and Appointments
4/1. James Blank was named a partner in the New York office of the law firm of Latham & Watkins. He focuses on intellectual property litigation and counseling, including patent infringement, trademark infringement, trade dress infringement, unfair competition, and copyright infringement. He also advises clients on technology transactions and intellectual property issues that arise in connection with mergers, acquisitions and corporate financings. See, LW release.
4/2. Jack Lever was named Chair of the Intellectual Property Department of the law firm of McDermott Will & Emery. He replaces Ray Lupo. See, MWE release.
4/4. Carolyn Gleason was named head of the International Trade Practice Group of the law firm of McDermott Will & Emery. She focuses on dispute settlement under the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). The group handles WTO cases, import relief, customs work, export control work, bilateral and regional trade issues, trade legislation and other international trade matters, and preventing competitors from engaging in unfair trade practices. See, MWE release.
4/5. The law firm of Hunton & Williams elected 15 attorneys to partnership, including Emerson Briggs, Doug Heffner, Derek Johnston, and John Martin. Emerson Briggs works in the Washington DC office, where he focuses patent and trademark litigation at the administrative, trial and appellate levels; he also works on the protection, enforcement and licensing of e-commerce and Internet patents, trademarks and copyrights. Doug Heffner also works in the Washington DC office, where he focuses on international trade. Derek Johnston works in the Atlanta office, where he focuses the development and commercialization of products and services in the computer, software, hardware, Internet, e-commerce and information technologies industries. John Martin works in the Richmond office, where he focuses on trial and appellate litigation, with an emphasis on antitrust, intellectual property and unfair competition. See, HW release.
4/8. Robert Mirelson was named Deputy Chief of the Federal Communications Commission's (FCC) Consumer and Governmental Affairs Bureau (CGB). His area of responsibility will be consumer outreach. He previously worked for Booz Allen Hamilton. Before that, he served for 29 years in the U.S. Army.
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Tuesday, April 9
The Supreme Court of the U.S. is on recess until Monday, April 15.
The House will return from its Spring District Work Period. It will meet at 2:00 PM for legislative business to consider a number of measures under suspension of the rules.
8:30 AM. The Global Information Infrastructure Committee will hold a meeting regarding Internet use in China. For more information, contact Robert Rogers at rrogers or 202 261-6572. Location: Winner's Room, National Press Club, 529 14th St. NW, 13th Floor.
9:30 AM - 12:00 NOON. The Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice will continue their joint hearings titled Competition and Intellectual Property Law and Policy in the Knowledge Based Economy. See, agenda. Location: Room 432, FTC, 600 Pennsylvania Ave., NW.
10:00 AM. Mikhail Lesin, Minister of Information and Press of the Russian Federation, will give a speech titled The State of the Russian Media. Location: West Room, National Press Club.
2:00 PM. The House Financial Services Committee will hold another hearing on HR 3763, the Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002. Location: Room 2128, Rayburn Building.
4:00 PM. Margo Bagley (Emory University School of Law) will give a lecture titled Patently Unconstitutional: Geographic Limitations on Prior Art in a Small World. For more information, contact  Robert Brauneis at rbraun or 202 994-6138. Location: George Washington University Law School, 2000 H Street, NW.
5:30 PM. The House Rules Committee will meet to adopt a rule for consideration of HR 3925, the Digital Tech Corps Act of 2002. Location: H-312, The Capitol.
Wednesday, April 10
The House will meet at 10:00 AM for legislative business. It may take up HR 3925, the Digital Technology Corps Act of 2002.
9:30 AM - 4:30 PM. The Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice will continue their joint hearings titled Competition and Intellectual Property Law and Policy in the Knowledge Based Economy. See, agenda. Location: Room 432, FTC, 600 Pennsylvania Ave., NW.
10:00 AM. The House Commerce Committee will mark up HR 3833, the Dot Kids Implementation and Efficiency Act of 2002. Location: Room 2123, Rayburn Building.
10:00 AM. The House Appropriations Committee's Subcommittee on Commerce, Justice, State, and the Judiciary will hold a hearing on the proposed budget for the Federal Trade Commission (FTC) for FY2003. FTC Chairman Timothy Muris will testify. Location: Room H-309, The Capitol.
10:00 AM - 12:00 NOON. The AEI Brookings Joint Center for Regulatory Studies will host a panel discussion titled Microsoft: Making the Punishment Fit the Crime. The participants will be Robert Hahn (AEI Brookings), Robert Litan (AEI Brookings), George Priest (Yale Law School), Steve Salop (Georgetown Law Center), and Richard Schmalensee (MIT Sloan School of Management). See, online registration page. Location: Wohlstetter Conference Center, AEI, 12th Floor, 1150 17th Street, NW.
RESCHEDULED. 10:30 AM. The Senate Judiciary Committee's Subcommittee on Antitrust, Competition, and Business and Consumer Rights will hold a hearing titled Cable Competition and the ATT Comcast Merger. Sen. Herb Kohl (D-WI) will preside.
12:00 NOON. The Congressional Internet Caucus Advisory Committee will host a luncheon panel discussion on the use of e-learning to train workers. The scheduled participants include Sen. Conrad Burns (R-MT), Rep. Johnny Isakson (R-GA), Jerry Berman (Internet Education Foundation), Rich Moran (Accenture), Daniel Hamburger (Indeliq), Greg Priest (SmartForce), and retired Brig. Gen. Frank Anderson (Defense Acquisition University). RSVP to RSVP or call Danielle at 202 637-4370. Location: Reserve Officers Association, First and Constitution Ave., NW.
2:00 PM. The House Ways and Means Committee's Subcommittee on Select Revenue Measures will hold a hearing the Extraterritorial Income Regime. Location: Room 1100, Longworth Building.
Thursday, April 11
The House will meet at 10:00 AM for legislative business.
9:30 AM. The House Financial Services Committee will hold a meeting to mark up several bills, including HR 3763, the Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002, and HR 3764, a bill to authorize appropriations for the Securities and Exchange Commission (SEC). Location: Room 2128, Rayburn Building.
9:30 AM - 4:30 PM. The Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice will continue their joint hearings titled Competition and Intellectual Property Law and Policy in the Knowledge Based Economy. See, agenda. Location: Room 432, FTC, 600 Pennsylvania Ave., NW.
10:00 AM. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property will hold an oversight hearing titled The U.S. Patent and Trademark Office: Operations and Fiscal Year 2003 Budget. Location: Room 2141, Rayburn House Office Building.
10:00 AM. The House Appropriations Committee's Subcommittee on Commerce, Justice, State, and the Judiciary will hold a hearing on the proposed budget for FY 2003 for the Office of Homeland Security. Location: Room 2359, Rayburn Building.
10:00 AM. The House Ways and Means Committee's Subcommittee on Trade will hold a hearing on normal trade relations with Russia. Location: Room 1100, Longworth Building.
10:00 AM. The Senate Judiciary Committee has scheduled an executive business meeting. Location: room 226, Dirksen Building.
11:00 AM. The Cato Institute will host a book forum on Free Trade under Fire [Amazon], by Douglas Irwin, Professor of Economics at Dartmouth College. The speakers will be Irwin, Robert Litan (Brookings) and Steve Clemons (New America Foundation). Lunch will follow. See, CATO notice. Location: 1000 Massachusetts Avenue, NW.
12:00 NOON - 1:30 PM. The Business Software Alliance will host its 5th Annual "Talking Technology" forum luncheon. Mark Forman, Associate Director for Information Technology and E-Government with the Office of Management and Budget (OMB), will speak. RSVP to Jeri Clausing at 202 530-5127 or Location: Reserve Officers Association, One Constitution Avenue, NE.
Friday, April 12
The House will not be in session.
10:00 AM - 12:00 NOON. The American Enterprise Institute (AEI) will hold a panel discussion titled Is Open Source the Future of Software? The participants will be Robert Hahn (AEI Brookings), James Bessen (Research on Innovation), David Evans (NERA), Lawrence Lessig (Stanford University), and Brad Smith (Microsoft). See, AEI online registration page. Location: 1150 17th St., NW.
10:00 AM - 12:00 NOON. The National Commission on Libraries and Information Science (NCLIS) will hold an open business meeting. See, notice in Federal Register. Location: Conference Room, NCLIS Office, 1110 Vermont Avenue, NW, Suite 820.
The Federal Communications Bar Association (FCBA) will host a luncheon. The speaker will be Nancy Victory, Director of the NTIA. RSVP to Wendy Parish at wendy by Tuesday, April 9, at 5:00 PM.
Deadline to submit comments to the Federal Communications Commission (FCC) regarding its annual report to Congress regarding progress made in achieving the objectives of the Open Market Reorganization for the Betterment of International Telecommunications Act (ORBIT Act), 47 U.S.C. § 646. The next FCC Orbit Act report is due to Congress on June 15, 2002. See, FCC notice [PDF].
Monday, April 15
Extended deadline to submit comments to the Federal Trade Commission regarding proposed changes to its Telemarketing Sales Rule (TSR). See, notice in Federal Register. See also, FTC release.