Tech Law Journal Daily E-Mail Alert
April 10, 2002, 9:00 AM ET, Alert No. 407.
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SEC Official Addresses Regulation of Internet Advisors
4/8. Paul Roye, Director of the Securities and Exchange Commission's (SEC) Division of Investment Management gave a speech titled "Priorities in Investment Adviser Regulation" in Washington DC.
He stated that the SEC "will hold an open meeting this Thursday to consider whether to propose a new rule under the Advisers Act that would permit certain investment advisers that provide advisory services through interactive Internet websites to register with the Commission, even if they do not have $25 million in assets under management. The staff's recommendation is driven, in part, by the development of Internet technology that was not prevalent in 1997 when NSMIA was implemented."
He added that SEC Chairman Harvey Pitt has stated that the SEC is committed to reviewing and modernizing all of the federal securities regulations. "This means that we have to analyze and revise our rules, as necessary, in the wake of technological developments in the marketplace," said Roye.
He concluded that "Now is an exciting time to be involved in the regulation of investment advisers. Adviser regulation has entered the electronic age through the IARD; adviser registration information now is available to the public with just the click of a mouse rather than a laborious search of microfiche; and adviser regulations currently are the subject of a top to bottom review."
DOC Official Addresses Tech Policy
4/10. Bruce Mehlman, Assistant Secretary for Technology Policy at the Commerce Department, gave a speech titled "Our Digital Future" to the European American Business Council Digital Economy Workshop in Brussels, Belgium. He advocated the benefits of new technologies, reviewed Bush administration policy initiatives, and discussed pending technology related policy debates.
He stated that "IT brings a history of minimal regulation, robust competition, rapid innovation, market driven economics and falling prices. Telecom has traditionally been heavily regulated, monopolistic, slow to change, heavily subsidized and often marked by high prices. While convergence of information technology and telecom creates wonderful innovations and new services for consumers, it's giving regulators and policy leaders fits."
He then recited some of the issues that are giving regulators fits, such as "how to protect privacy without hindering innovation when data is so easily captured, manipulated and transmitted; how to ensure security in the face of distributed and multinational hackers; and how to pursue law enforcement when wrong doers may live offshore or conceal their communications".
He also asked rhetorically, "How do we protect intellectual property rights in an online world with peer to peer technologies, without strangling innovation in products and services?" He also identified two other troublesome issues: spectrum management, and providing widespread access to new technologies.
Mehlman also listed the areas where the Bush administration has adopted policies. He stated that "the President has proposed aggressive investments in research & development. Our 2002 budget crossed the $100 billion mark for the first time (at $103B), and we have proposed $112 billion for 2003 -- the largest R&D commitment in our nation's history. We're also asking Congress to make the R&D tax credit permanent, to reflect the importance of private investments in R&D, which are twice as large as government's. We're seeking to strengthen intellectual property protection -- both by devoting far more resources to the U.S. Patent & Trademark Office (21% more in 2003), and by enforcing IPR aggressively at home and abroad. Additionally, the President has asked Congress to devote another $200 million to improving math and science teaching at the K-12 level".
He listed the President's tax initiatives, including tax cuts, and accelerated depreciation schedules. He also stated that the administration is supporting legislation to give the President trade promotion authority, and legislation "to reform the Export Administration Act to make it less burdensome for our technology companies to export new tech equipment consistent with national security concerns."
He also stated that "the President's technology priorities include hardening the nation's defenses, especially critical infrastructure protection and cyber security".
FBI's Internet Fraud Data
4/9. The Department of Justice's (DOJ) Federal Bureau of Investigation (FBI) issued a press release in which it stated that its Internet Fraud Complaint Center (IFCC) has written a statistical report on Internet fraud complaints.
The FBI stated that the top five categories of complaints are auction fraud (43% of all complaints), non deliverable merchandise and non payment (20.3%), Nigerian letter fraud (15.5%), credit and debit card fraud, and confidence fraud. See, FBI release.
These finding differ from those of a similar report released by the Federal Trade Commission (FTC) on January 23, 2002. The FTC ranking the top ten categories of consumer complaints to the FTC: Identity Theft (42%), Internet Auctions (10%), Internet Services and Computer Complaints (7%), Shop at Home and Catalog Offers (6%), Advance Fee Loans and Credit Protection (5%), Prizes/ Sweepstakes/ Gifts (4%), Business Opportunities and Work at Home Plans (4%), Foreign Money Offers (4%), Magazines and Buyers Clubs (3%), Telephone Pay Per Call/ Information Services (2%). See, FTC release.
The FTC report is based upon 204,000 consumer complaints of all kinds submitted in 2001. The FBI report is based upon 49,711 Internet related complaints in 2001.
The IFCC web site states that it is a "partnership" and "venture" of the FBI and the National White Collar Crime Center (NW3C). The NW3C web site states that it is funded by the DOJ.
People and Appointments
4/9. AOL Time Warner announced that Barry Schuler, who has been Chairman and CEO of America Online, "will lead a new division that will develop digital services for AOL Time Warner platforms. Mr. Schuler, who will relinquish his responsibilities as head of America Online, will continue to report to AOL Time Warner COO-elect Bob Pittman. Mr. Pittman, who ran America Online's operations before the AOL Time Warner merger, will take over Mr. Schuler's operating responsibilities at AOL. Mr. Pittman will also continue to fulfill his responsibilities as COO-elect of AOL Time Warner." See, AOLTW release.
House to Vote on Digital Tech Corps Bill
4/9. The House Rules Committee adopted a rule for consideration of HR 3925, the Digital Tech Corps Act of 2002. It adopted an open rule that provides for one hour of debate.
This bill would create an information technology worker exchange program between the federal government and the private sector in order to promote the development of expertise in IT management. It provides that "On request from or with the agreement of a private sector organization, and with the consent of the employee concerned, the head of an agency may arrange for the assignment of an employee of the agency to a private sector organization or an employee of a private sector organization to the agency".
USTR Zoellick Addresses Chinese History, Globalization, and WTO
4/9. U.S. Trade Representative (USTR) Robert Zoellick gave a speech at the Chinese University of Finance and Economics in Beijing, China. He spoke about Chinese history, globalization, and China's entry into the World Trade Organization (WTO).
He stated that "As a WTO member, China is supposed to greatly reduce tariff and non-tariff barriers. It will need to improve protection and enforcement of intellectual property rights. It needs to allow companies engaged in telecommunications, computer services, banking, securities, insurance, freight forwarding, and wholesale and retail distribution to invest in China, providing services of value and spurring domestic competition.
He added that "As a result, China's membership in the WTO will mean lower prices, greater consumer choice, greater enterprise efficiency, enhanced productivity, higher wages, new jobs, and more opportunity. Our goal now should be to work together to assure that China's commitments are implemented faithfully and on schedule, and to assure that China, in turn, can utilize WTO rules to prevent other countries from closing their markets unfairly to Chinese goods. I want to repeat a key phrase -- we should work together."
Zoellick also offered his advice regarding the requirements for a successful modern economy, including: "A transparent system of laws and regulations that are enforced fairly, eliminating opportunities for corruption and favoritism. Protection of property rights, so that people can keep the fruits of their labor and build for the future for themselves and their children. A pricing system reflecting supply and demand of individual consumers and businesses, not state imposed diktats. Competition, so people are inspired to give their best, to improve, to reach within themselves to tap their full potential."
Zoellick is on a trip to China and Japan on April 8-11.
IPR News
4/5. The U.S. Court of Appeals (FedCir) issued its opinion in In Re Jagannadha Sastry, an appeal from the U.S. Patent and Trademark Office's (USPTO) Board of Patent Appeals and Interferences (BPAI). Sastry and other individuals filed U.S. patent application No. 07/945,865 in 1992. It pertains to a composition for treating and preventing HIV. A USPTO examiner rejected all of the claims of the application for obviousness and lack of enablement. The USPTO's BPAI reversed the enablement rejection, but sustained the obviousness rejection. The Court of Appeals affirmed.
4/9. The U.S. Patent and Trademark Office (USPTO) published a notice in Federal Register stating that it will hold a public hearing on May 16 on its proposed plan to eliminate the paper patent and trademark registration collections from its public search facilities, and to transition to electronic patent and trademark information collections. The USPTO is seeking public comment on issues related to this proposal. The USPTO is also seeking input on whether any governmental entity or non-profit organization is interested in acquiring the paper patent and trademark registration collections to be removed from the USPTO's public search facilities. The deadline to submit requests to speak at the public hearing is April 30. See, Federal Register, April 9, 2002, Vol. 67, No. 68, at Pages 17055 - 17060.
4/9. The Recording Industry Association of America (RIAA) announced that it "reached an out of court settlement for $1 million with Integrated Information Systems, Inc. (IIS), a high tech company that ran a dedicated server permitting its employees to access and distribute thousands of infringing MP3 files over the corporate network." See, RIAA release.
4/9. The Recording Industry Association of America (RIAA) announced "a $3.2 million settlement with DOCdata USA, a CD manufacturing facility, to resolve claims of copyright infringement." See, RIAA release.
More News
4/9. The Commodity Futures Trading Commission's (CFTC) published a notice in Federal Register stating that its Technology Advisory Committee will hold a public meeting on April 24 on technology related issues in the financial services and commodity markets, including cyber security. See, Federal Register, April 9, 2002, Vol. 67, No. 68, at Page 17060.
4/9. The Cato Institute announced that it will host a panel discussion titled "A Progress Report on the HDTV Transition" on May 1. The scheduled speakers are Mark Cuban (HDNet), Thomas Hazlett (Manhattan Institute), Rick Chessen (FCC), David Donovan (Association for Maximum Service Television), Michael Calabrese (New America Foundation), and Richard Wiley (Wiley Rein and Fielding). See, agenda and online registration page.
4/9. The World Trade Organization (WTO) and Cambridge University Press (CUP) launched a new scholarly journal named the World Trade Review. WTO Director General Mike Moore stated that "The mission of this Journal is to publish peer reviewed articles which contribute to public discussion and debate about the multilateral trading system". See, WTO release.
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Notices & Disclaimers
Copyright 1998 - 2002 David Carney, dba Tech Law Journal. All rights reserved.
Wednesday, April 10
The Supreme Court of the U.S. is on recess until Monday, April 15.
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 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 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.
POSTPONED TO APRIL 23. 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.
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 @netcaucus.org or call Danielle at 202 637-4370. Location: Reserve Officers Assoc., 1st 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 SEC. Location: Room 2128, Rayburn Building.
9:30 AM - 4:30 PM. The 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 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 will hold 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 (Dartmouth). The speakers will be Irwin, Robert Litan (Brookings) and Steve Clemons (New America Foundation). Lunch will follow. See, CATO notice. Location: 1000 Massachusetts Ave., 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, will speak. RSVP to Jeri Clausing at 202 530-5127 or jeric @bsa.org. Location: Reserve Officers Assoc., One Constitution Ave., 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), 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: NCLIS, 1110 Vermont Ave., NW, Suite 820.
The FCBA will host a luncheon featuring Nancy Victory, Director of the NTIA. April 9 was the deadline to RSVP to Wendy Parish at wendy @fcba.org.
Deadline to submit comments to the 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). 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 FTC regarding proposed changes to its Telemarketing Sales Rule. See, notice in Federal Register and FTC release.
Tuesday, April 16
6:00 - 8:15 PM. The FCBA will host a CLE seminar titled U.S. Spectrum Policy: Convergence or Co-Existence? This is Part II of a two part series.
6:30 - 8:30 PM. The IP Law Forum of the Women's Bar Association of DC and the IP Section of the District of Columbia Bar will host a panel discussion and reception titled "What Judges Want: Effective Advocacy in Technology Cases". The speakers will be Judge Paul Michel of the U.S. Court of Appeals (FedCir), Judge Yvette Kane of the U.S. District Court (WDPenn), and Judge Marvin Garbis of the U.S. District Court (DMd). The price to attend is $40. For more information, contact the WBA at 202 639-8880. Location: Auditorium, The Hirshhorn Museum, 7th Street and Independence Ave., SW.