Tech Law Journal Daily E-Mail Alert
August 19, 2002, 9:00 AM ET, Alert No. 494.
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Bush Extends Export Administration Act Again
8/16. President Bush signed a document titled "Notice: Continuation of Emergency Regarding Export Control Regulations", which extends the Export Administration Act (EAA) for one more year. The EAA was scheduled to expire on August 20, 2001. On August 17, 2001, President Bush issued Executive Order 13222 extending the EAA for one year. The current action extends the EAA for another year.
Bush wrote that "Because the Export Administration Act has not been renewed by the Congress, the national emergency declared on August 17, 2001, must continue in effect beyond August 17, 2002. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing for 1 year the national emergency declared in Executive Order 13222."
Sen. Mike Enzi (R-WY), and others, have attempted to pass legislation in the 107th Congress extending and reforming export control laws. The Senate bill, S 149, titled the "Export Administration Act of 2001", sponsored by Sen. Enzi, is a major overhaul of export control laws. It passed the Senate Banking Committee on March 22, 2001 by a vote of 19-1. It passed the full Senate on September 6, 2001, by a vote of 85-14.
S 149 would ease restraints on the export of most dual use products, such as computers and software. However, it would raise penalties for violation of remaining prohibitions. It would also repeal provisions of the 1998 National Defense Authorization Act which require the President to use Million Theoretical Operations Per Second (MTOPS) to set restrictions on the export of high performance computers.
On August 1, 2001, the House International Relations Committee approved HR 2581, which is also titled the "Export Administration Act of 2001", sponsored by Rep. Benjamin Gilman (R-NY), by a vote of 26-7. However, it is a much different bill. The Bush administration supports S 149.
While S 149 passed the Senate overwhelmingly, it passed before the terrorists attacks of September 11, 2001. It now faces new opposition. No action has been taken in either the House or Senate on this bill since September 11, 2001. On the other hand, Sen. Fred Thompson (R-TN), one of the leading opponents of S 149 in the Senate, is retiring. Rep. Gilman has also announced his retirement.
4th Circuit Rules in Lanham Act Case
8/16. The U.S. Court of Appeals (4thCir) issued its opinion [PDF] in U.S. Search LLC v. US, Inc., a trademark case.
U.S. Search LLC (LLC) is an executive recruiting and placement firm based in Falls Church, Virginia, that specializes in recruiting for the plastics industry. The company's President is its sole recruiter. US, Inc. (Dotcom) is a publicly traded Delaware corporation based in Los Angeles, California, that provides access to online public record information over the Internet and through the use of its toll free telephone number, 1-800- USSEARCH. Its services are used to locate people, and to verify prospective employees' credentials and background after an employer had identified the candidate. Dotcom registered the mark "1-800- U.S. SEARCH" in 1998. After initiation of litigation, LLC sought to register the mark "U.S. Search". The U.S. Patent and Trademark Office rejected the application.
LLC filed a complaint in U.S. District Court (EDVa) against Dotcom alleging false designation of origin under the Lanham Act, 15 U.S.C. § 1125(a), and unfair competition under Virginia common law. Dotcom counterclaimed against LLC alleging infringement of its federally registered mark, pursuant to 15 U.S.C. §§ 1114, 1116-18, false designation of origin, pursuant to 15 U.S.C. § 1125(a), and common law unfair competition.
The District Court found that "U.S. Search" was not entitled to service mark protection when used in connection with LLC's executive recruiting services and granted summary judgment to Dotcom. The Appeals Court affirmed.
More News
8/18. The U.S. Court of Appeals (6thCir) issued its opinion in Michael Smith v. Bureau of Prisons, a case in which a federal prisoner complained regarding the quality and pricing of telephone service afforded to federal inmates. The District Court dismissed the complaint for failure to exhaust administrative remedies. The Appeals Court affirmed.
9th Circuit Issues Amended Opinion in Syntek v. Microchip Technology
8/16. The U.S. Court of Appeals (9thCir) issued its amended opinion [11 pages in 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, in its original opinion [13 pages in PDF], issued on April 8, 2002, 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. The amended opinion provides that the judicial proceeding is stayed (not dismissed) pending outcome of the administrative proceeding. The Appeals Court also denied Syntek's petition for rehearing.
The Appeals Court reasoned in its amended opinion that dismissal might "unfairly disadvantage" Syntek. It wrote that "Because the statute of limitations may prevent Syntek from refiling its claim if necessary at the conclusion of its administrative challenge to the Copyright Office’s decision, we stay the proceedings pending the outcome of the administrative process".
The amended opinion does not alter the original opinion's analysis with respect to application of the primary jurisdiction doctrine. The following description of the case revises TLJ coverage of the original opinion. See, article titled "Challenges to Source Code Copyright Registration & the Doctrine of Primary Jurisdiction", in TLJ Daily E-Mail Alert No. 406, April 9, 2002.
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 stayed the action 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 a stay 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.
The original opinion is also published at 285 F.3d 857.
DOJ Settles Antitrust Suit Against MathWorks
8/15. The Department of Justice (DOJ) announced that it filed a proposed settlement with the U.S. District Court (EDVa) in its action against MathWorks and Wind River Systems. The DOJ filed a complaint on June 21, 2002, alleging violation of Section 1 of the Sherman Act.
The complaint alleged that MathWorks and Wind River were competitors in the development and sale of dynamic control system design software tools, and that they entered into an agreement that gave MathWorks the exclusive right to sell Wind River's MATRIXx products and required Wind River to stop its own development and marketing. See, DOJ June 21 release.
The DOJ announced in an August 15 release that the DOJ had "sought a judicially enforced sale of the MATRIXx product line. The proposed settlement ensures that an independent trustee will direct the attempted sale under court supervision."
The DOJ previously settled with Wind River Systems.
Wednesday, August 21
Deadline for those persons requesting to testify at the Federal Election Commission's (FEC) August 28-29 hearing to submit comments to the FEC regarding its second Notice of Proposed Rulemaking (NPRM) [67 pages in MS Word] regarding the Bipartisan Campaign Reform Act of 2002 (BCRA), the recently enacted campaign finance reform legislation. This NPRM pertains to "electioneering communications". The proposed rules would exempt webcasts. See also, FEC release.
Thursday, August 22
RESCHEDULED FOR SEPTEMBER 5. 10:00 AM - 12:00 NOON. The Federal Communications Commission's (FCC) Advisory Committee for the 2003 World Radiocommunication Conference (WRC-03 Advisory Committee) will hold a meeting. See, notice in Federal Register, July 19, 2002, Vol. 67, No. 139, at Page 47549.  See, notice in Federal Register, August 2, 2002, Vol. 67, No. 149, at Pages 50437 - 50438, rescheduling the meeting.
People and Appointments
8/16. Supachai Panitchpakdi will become the new Director General of the World Trade Organization (WTO), effective September 1, 2002. He will replace Mike Moore. Roderick Abbott, Kipkorir Aly Azad Rana, Francisco Thompson Flôres, and Rufus Yerxa will be the Deputy Directors General, effective October 1, 2002. They will replace Ablassé Ouedraogo, Paul Henri Ravier, Miguel Rodriguez Mendoza, and Andrew Stoler. See, WTO release.
8/15. James Ziglar wrote a letter [PDF] to President Bush stating that he will resign as Commissioner of the Department of Justice's (DOJ) Immigration and Naturalization Service (INS) "no later than December 31, 2002".
8/13. Douglass Maynard joined the law firm of Akin Gump as a partner in the litigation practice group in the New York City office. He focuses libel and media law, complex commercial cases and white collar matters. He was previously associate general counsel at Time Inc. Before that, he was an assistant U.S. attorney in the Southern District of New York. See, release.
8/14. Craig Sherman and Mark Handfelt joined the law firm of Wilson Sonsini as partners in its Kirkland, Washington office. Sherman was previously Managing Director of Venture Law Group's Pacific Northwest office. See, release.
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