Tech Law Journal Daily E-Mail Alert
September 9, 2002, 9:00 AM ET, Alert No. 504.
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1st Circuit Rules in Cell Tower Permit Case
9/5. The U.S. Court of Appeals (1stCir) issued its opinion in ATC Realty v. Town of Kingston, a cell tower permit case. The Appeals Court reversed a District Court order to grant permits to construct a cell tower.
Background. The plaintiffs, ATC Realty and SBA Towers, develop cell towers, and then lease antenna facilities on these towers to wireless service companies. They sought permits from the Town of Kingston, New Hampshire, to construct a tower to fill a gap in coverage of wireless service companies. It was one of two applications considered at the same time. Kingston rejected the ATC/SBA applications, and granted the applications of its competitor.
Kingston's written determination listed four reasons, including its decision to "require cooperation and coordination between telecommunications service providers", "reduce adverse impacts on neighborhood aesthetics", "reduce the visual intrusiveness", and require that "all other reasonable opportunities have been exhausted".
District Court. ATC and SBA filed a complaint in U.S. District Court (DNH) against Kingston, alleging that the refusal was not based upon substantial evidence, as required by 47 U.S.C. § 332(c)(7)(B)(iii). The District Court granted summary judgment to ATC and SBA. Kingston appealed.
Court of Appeals. The Appeals Court reversed, and entered summary judgment in favor of Kingston.
"This case does not involve a claim that the Board has effectively prohibited the provision of telecommunication services needed to close a service gap. See 47 U.S.C. § 332(c)(7)(B) (i)(II). Rather, the Board has granted permission to plaintiffs' competitors to build a tower which will close the service gap along Route 125."
The Appeals Court found that "the plaintiffs have failed to demonstrate that the Board's selection was not supported by substantial evidence. The Planning Board was presented with two proposed towers that were virtually identical: the towers were of the same height; covered the same area; accommodated almost the same number of wireless providers; could be seen, in comparable fashion, from Route 125; had residential abutters; and were roughly equidistant from commercial zones. There is only one substantive difference between the proposed towers: unlike American Tower's application, plaintiffs' proposal engendered much opposition due to its adverse impact on the surrounding neighborhood aesthetic."
Law Professor Criticizes Supreme Court Spectrum Speech Cases
9/6. The American Enterprise Institute's (AEI) and Brookings Institution's Joint Center for Regulatory Studies published a paper [77 pages in PDF] titled "The Logic of Scarcity: Idle Spectrum As a First Amendment Violation", by Stuart Benjamin. The article takes issue with the Supreme Court's landmark First Amendment cases involving use of spectrum -- National Broadcasting Company v. US, 319 U.S. 190 (1943) and Red Lion v. FCC, 395 U.S. 367 (1969).
He writes that "The Supreme Court has distinguished the regulation of radio spectrum from the regulation of printing presses, and applied more lenient scrutiny to the regulation of spectrum, based on its conclusion that the spectrum is unusually scarce."
"I suggest that in most cases the only interest that would justify a refusal to allocate spectrum is nontrivial interference. I thus conclude that, even if one accepts the current state of the doctrine, the government cannot exclude noninterfering uses from the spectrum."
Benjamin, who is a law professor at the University of Texas, argues that "the scarcity rationale does not support, and instead undercuts, government actions that limit the use of the spectrum. ... And no other rationale would distinguish spectrum from print in a way that would support government constraints on the former but not the latter."
He argues in this paper that the appropriate standard of review "is the intermediate scrutiny ordinarily applied to content neutral speech regulation. In order to satisfy such scrutiny, the government must put forward an important or substantial government interest. I suggest that in most cases the only interest that would justify a refusal to allocate spectrum is nontrivial interference. I thus conclude that, even if one accepts the current state of the doctrine, the government cannot exclude noninterfering uses from the spectrum."
10th Circuit Construes Contract to Locate Venture Capital
8/28. The U.S. Court of Appeals (10thCir) issued its opinion, titled "Order and Judgment", in Fonix v. Perpetual Growth Fund Advisors, a case involving an agreement to locate venture capital for a technology company in return for a commission.
Background. Fonix Corporation makes speech recognition software. Perpetual Growth Funds Advisors locates investors to provide venture capital for start up technology companies. Fonix and Perpetual entered into a written contract whereby Fonix agreed to pay Perpetual a commission for locating an investor. Perpetual drafted a document that provided for a "fee of 5% paid at closing of a financing between Fonix Corp and an investor that is a result of an introduction by Perpetual". Perpetual located an investment advisor. Five funds advised by this advisor bought $10 Million in Fonix stock. Fonix wired $500,000 to Perpetual. Perpetual also wrote to Fonix that "This wire will indicate there are no outstanding obligations between Fonix Corporation and Perpetual Growth Adivsors." Fonix later obtained $56 Million in financing from other investors. Perpetual requested 5% of this amount as "trailing fees". Fonix refused.
District Court. Fonix filed a complaint in U.S. District Court (DUtah) against Perpetual based upon diversity of citizenship seeking declaratory judgment that it owed nothing to Perpetual. Perpetual counterclaimed for payment under the contract. The District Court held that both the agreement and the evidence as to the parties' intent were ambiguous, and hence, resolved the ambiguity against the drafter of the contract, Perpetual. That is, it held that Fonix does not have to pay trailing fees. Perpetual appealed.
Appeals Court. The appeals court affirmed. It found that the contract was ambiguous as to whether trailing fees would be paid. It wrote that the expert witnesses disagreed regarding standard industry practice regarding the payment of trailing fees. Finally, it wrote that the parties presented conflicting evidence regarding their discussions.
The Appeals Court concluded, "Having appropriately concluded that the extrinsic evidence failed to clarify the terms of the agreement, the district court properly interpreted the agreement against the drafter".
However, the Appeals Court also wrote that "This order and judgment is not binding precedent" beyond the parties to the case.
Antitrust Division Files Complaint Against ADM
 9/6. The Justice Department (DOJ) filed a complaint in U.S. District Court (DC) against Archer Daniels Midland (ADM) to block a joint venture with a competing corn wet miller in order for ADM to proceed with its proposed acquisition of Minnesota Corn Processors (MCP). The DOJ simultaneously filed a proposed consent decree. See, DOJ release. Meanwhile, ADM announced "the completion of the acquisition" of MCP in its release of September 6. It did not reference the litigation. According to the DOJ, the transaction would have reduced the number of competitors in the relevant market from five to four. ADM has a history with the DOJ.
Appeals Court Vacates Restitution Order for Computer Hacker
8/28. The U.S. Court of Appeals (2ndCir) issued its opinion in USA v. Harris. The Appeals Court wrote that Melissa Harris "gained access to her employer's computer without authorization in order to obtain the Social Security numbers of individuals who were the targets of a credit card fraud scheme." She plead guilty to one count of violating 18 U.S.C. § 1030(a)(2)(B). The District Court sentenced her to three months in prison, three months of home detention, ordered her to pay restitution in the amount of $435,895.15. She appealed.
The Appeals Court vacated and remanded for resentencing. It wrote that the record did not show that the District Court had considered her ability to pay, which is one of the factors to be considered by the court in ordering restitution, pursuant to 18 U.S.C. § 3664(f)(2).
2nd Circuit Rules on Copyrightable Subject Matter
8/29. The U.S. Court of Appeals (2ndCir) issued its opinion in Sparaco v. LMS, a copyright case. This appeal involves whether a site plan for a building construction project is protectable under copyright law. However, the Court's review of the history and current state of the law regarding what constitutes copyrightable subject matter may be of interest to persons in the technology sector.
Background. Albert Sparaco is a land surveyor and planner. He was retained to prepare a site plan for an assisted living facility Rockland County, New York. He completed the site plan, which included "(1) the location and contour of the building footprint; (2) location and contour of parking lots; (3) placement and design of curbs, driveways, and walkways; (4) placement of utilities and provision for sediment and erosion control; (5) landscape design, including the location for plants, trees, and lights; and (6) proposed changes to the contours and elevation of the terrain". He obtained a certificate of copyright for the site plan, having registered it as a "map" and "technical drawing." Sparaco was then replaced, and his site plan was copied, and used, with only minor modifications.
District Court. Sparaco filed a complaint in U.S. District Court (SDNY) against various defendants alleging, among other things, creation of a derivative work in violation of the Copyright Act. The District Court eventually dismissed this claim. This appeal followed.
Appeals Court. The Court of Appeals vacated and remanded. The Appeals Court first addressed the physical characteristics of the site. It wrote that "Sparaco's argument would have had considerable force at an earlier time in the development of the copyright law. Since the eighteenth century, the copyright statutes have explicitly named maps as falling within their protection. ... Copyright's early protection of factual information found justification in the author's labor or ``sweat of the brow´´ in assembling and creating a work. In 1845, Justice Story explained that the maker of a map was protected against copying; another was free to map the same region but was not free to copy information set forth on the first map; he needed to rely on his own labor, skill, and expense to make a second independently conceived map."
"However, in its twentieth century development, copyright law turned away from that view. Courts began to repudiate the earlier notion that an author's labor in discovering facts justified giving the author protection against the copying of those facts."
The Appeals Court continued that "In Feist Publications, Inc. v. Rural Telephone Service Company, 499 U.S. 340, 347-48 (1991), the Supreme Court further explained that copyright protection can extend only to original authorship, and that the publication of facts, regardless how much effort was expended in discovering them, is not original authorship. The facts set forth in an author's writing were not created by an author's act of authorship, and are therefore not protected by copyright. ... To the extent that the site plan sets forth the existing physical characteristics of the site, including its shape and dimensions, the grade contours, and the location of existing elements, it sets forth facts; copyright does not bar the copying of such facts."
In discussing Sparaco's proposals for improvements to the site, the Appeals Court wrote that "It is a fundamental principle of copyright law that ``[i]n no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation [or] concept.´´ ... It is only if the copier has taken the author's expression or realization of the idea that infringement results. Where copying has occurred, the question whether there has been infringement can thus turn on whether the copying was only of the author's generalized ideas and concepts or of the author's more precisely detailed realization of those ideas." (Citations omitted.)
9th Circuit Reverses in Trek Trademark Case
9/6. The U.S. Court of Appeals (9thCir) issued its opinion [28 pages PDF] in Thane v. Trek, a trademark case. The Appeals Court reversed the District Court's summary judgment for Thane.
Background. Trek Bicycle Corporation is a leading manufacturer of bicycles and related products. In 1981, the USPTO granted Trek a trademark for the use of "TREK" on bicycles and bicycle frames. See, Trademark Registration No. 1168276. It has also been awarded several other trademarks based on variations of the word "trek". Trek has extensively advertised its trademark. Trek also sponsors and supplies bicycles to the professional bicycle racing team led by Lance Armstrong, four time winner of the Tour de France. Armstrong and his USPS team have also won numerous other international bicycle races riding Trek bicycles. Their jerseys prominently display the Trek name. Armstrong presented a Trek bicycle to the President at a White House ceremony. Trek also makes stationary exercise cycles.
Thane International makes, among other things, stationary exercise equipment, which it markets via television infomercials. In addition to its Bun and Thigh Isolator, it sells OrbiTrek and OrbiTrek Pro. Thane insists that the Trek portion of these names comes, not from Trek bicycles, but from the Star Trek television series.
Thane filed an application with the USPTO to register "ORBITREK" for goods described as "stationary exercise machines." Trek filed a Notice of Opposition with the Trademark Trial and Appeal Board.
District Court. Thane filed a complaint with the U.S. District Court (CDCal) seeking a declaration that it had not violated trademark laws under the Lanham Act, state common law, or state statutory law. Trek counterclaimed for trademark infringement pursuant to 15 U.S.C. § 1114(1), false designation of origin pursuant to 15 U.S.C. § 1125(a), and trademark dilution pursuant to 15 U.S.C. § 1125(c). Trek also plead various state law claims. The District Court granted Thane's motion for summary judgment and denied Trek's, holding that "any reasonable juror would conclude that there is no likelihood of confusion between Trek Bicycle Corporation's 'Trek' mark and Thane's 'OrbiTrek' mark." This appeal followed.
Appeals Court. The Appeals Court reversed and remanded as to all claims in which likelihood of confusion is an issue. It held that "a reasonable jury could decide the likelihood of confusion issue in favor of either party".
NewCom Executives Indicted
9/6. A grand jury of the U.S. District Court (CDCal) returned a 36 count indictment against Sultan Warris Khan, Asif Mohammad Khan, Steven Veen, and Alexander Remington, alleging, among other things, securities fraud, making false statements to the Securities and Exchange Commission (SEC), and money laundering.
Three of the defendants were executives of NewCom, a computer peripheral company that was based in Westlake Village, California. Sultan Khan was its President, CEO and Chairman. Asif Khan was its EVP. Veen was its CFO. Remington is the owner of Micro Equipment Corporation, which distributes computer parts and peripherals and was NewCom's main supplier. See, USAO release.
The SEC previously filed and settled a civil complaint against NewCom, the Khans, and others. See, SEC release.
People and Appointments
9/6. Shellie Blakeney was named Legal Advisor to the Tom Sugrue, Bureau Chief of the Federal Communications Commission's (FCC) Wireless Telecommunications Bureau. She has worked at the FCC since 1998. See, release [PDF].
9/6. Tina Jonas was named the Federal Bureau of Investigation's (FBI) Chief Financial Officer and Assistant Director, Finance Division. See, FBI release.
9/5. Rep. Chris Cox (R-CA) named James Freeman his new Legislative Director. Freeman is a former television news producer and USA TODAY online columnist. Peter Uhlmann remains Chief of Staff. See, Cox release.
9/4. David Brodsky, Laurie Smilan, and Michele Rose joined the law firm of Latham & Watkins. Brodsky, who has joined the firm's New York City office, was previously Managing Director and General Counsel -- Americas for Credit Suisse First Boston. Smilan, who has joined the Northern Virginia office, was previously the Co-Managing Partner of the Northern Virginia office of the law firm of Wilson Sonsini. Rose, who also has joined the Northern Virginia office, was previously a partner at Wilson Sonsini. See, release.
8/31. Jane Barrett, Katherine Marelich, and Audra Mori joined the Los Angeles office of the law firm of Piper Rudnick as partners. All three previously worked in the Los Angeles office of Preston Gates & Ellis. Barrett focuses on intellectual property and other matters. Marelich focuses on litigation involving copyright, trademark, trade secret and unfair business practices. Mori focuses on copyright and trademark. See, release.
Monday, September 9
The House will meet at 12:30 PM for morning hour and at 2:00 PM for legislative business. No votes are expected before 6:30 PM. The House will consider several non technology related measures under suspension of the rules. See, Whip Notice.
The Senate will meet at 12:00 NOON for morning business. At 1:00 PM the Senate will vote on confirming Kenneth Marra to be a Judge of the U.S. District Court (SDFl). The Senate will then resume consideration of HR 5005, the Homeland Security Act. Sen. Fred Thompson (R-TN) will be recognized to offer an amendment to strike Titles II and III of the Sen. Joe Lieberman's (D-CT) substitute amendment.
9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in WorldCom v. FCC, No. 01-1198. Judges Tatel, Garland and Williams will preside. Location: Courtroom 20, 333 Constitution Ave., NW.
Day one of a two day conference on patent interference law, hosted by the Intellectual Property Owners Association (IPO). For more information, call 202 466-2396. Location: Ronald Reagan International Trade Center.
Tuesday, September 10
The House will meet at 9:00 AM for morning hour and at 10:00 AM for legislative business. The House will consider HR 5011, the Military Construction Appropriations Act for FY 2003, and HR 5010, the Department of Defense Appropriations Act for FY 2003. See, Whip Notice.
The Senate is scheduled to consider HR 5093, the Interior Appropriations bill, and to continue its consideration of HR 5005, the Homeland Security Bill.
9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in AT&T v. FCC, No. 01-1188. Judges Ginsburg, Sentelle and Silberman will preside. Location: 333 Constitution Ave., NW.
10:00 AM. The House Judiciary Committee will hold a meeting to mark up several bills. The last item on the agenda is HR 4561, the Federal Agency Protection of Privacy Act, sponsored by Rep. Bob Barr (R-GA). The bill would require federal agencies to the agency shall prepare and make available for public comment an initial privacy impact analysis when it proposes new regulations. This item was held over from last week. Audio web cast. Location: Room 2141, Rayburn Building.
10:00 AM. The Senate Judiciary Committee will hold a hearing to examine the implementation of the USA PATRIOT Act, focusing on the expansion of the Foreign Intelligence Surveillance Act (FISA). Location: Room 226, Dirksen Building.
12:00 NOON. The FCBA's Engineering and Technical Practice Committee will host a brown bag lunch titled "Spectrum Management Reform: Preliminary Perspectives". The scheduled speakers are Paul Kolodzy (FCC Senior Spectrum Policy Advisor) and Mike Gallagher (NTIA). RSVP to Lisa Gaisford. Location: FCC, 445 12th St., SW, Courtyard Level, Conference Rooms B418 & B511.
12:00 NOON. Deadline to submit written comments to the Office of the USTR in response to its notice in the Federal Register requesting comments on China's compliance with the commitments it made in connection with its accession to the World Trade Organization (WTO).
Day two of a two day conference on patent interference law, hosted by the Intellectual Property Owners Association (IPO). For more information, call 202 466-2396. Location: Ronald Reagan International Trade Center.
The Intellectual Property Owners Association (IPO) Board of Directors will hold a meeting.
Wednesday, September 11
Anniversary of the terrorist attacks of September 11, 2001.
The House will meet at 12:00 NOON for legislative business. No votes are expected before 5:00 PM. The House will consider The Patriot Day Resolution.
Thursday, September 12
The House will meet at 10:00 AM for legislative business. The House is scheduled to consider HR 5193, the Back to School Tax Relief Act of 2002.
8:00 AM - 5:30 PM. Day one of a two day conference hosted by the International Intellectual Property Institute (IIPI) titled "Specialized Intellectual Property Courts". See, IIPI release and online registration form. Location: George Washington University Law School, Moot Court Room, 2000 H Street, NW.
9:30 AM. The FCC will hold a meeting. The FCC will consider a Notice of Proposed Rulemaking (NPRM) concerning its media ownership rules, pursuant to Section 202(h) of the Telecommunications Act of 1996. It will also consider a NPRM and Memorandum Opinion and Order concerning possible revisions to the rules on unsolicited advertising over the telephone and facsimile machine and the possible establishment of a national do not call list. This is CC Docket No. 92-90. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).
10:00 AM. Federal Reserve Board Chairman Alan Greenspan will testify to the House Budget Committee. Location: Room 210, Cannon Building.
10:00 AM. The House Judiciary Committee's Subcommittee on the Constitution will hold an oversight hearing titled "Privacy Concerns Raised by the Collection and Use of Genetic Information by Employers and Insurers". Audio web cast. Location: Room 2237, Rayburn Building.
2:30 PM. The Senate Commerce Committee's Subcommittee on Science, Technology, and Space Subcommittee will hold a hearing to examine S 2537, the Dot Kids Implementation and Efficiency Act of 2002, and HR 2417, the Dot Kids Domain Name Act of 2001. These bills would facilitate the creation of a new second level Internet domain within the U.S. country code domain that would provide a safe online environment for children. The House has already passed another version -- HR 3833. Location: Room 253, Russell Building.
Deadline to submit comments to the FCC regarding WorldCom's August 8, 2002, petition for a declaratory ruling pursuant to 47 C.F.R.§ 1.2, that requesting carriers are entitled to access ILEC Line Information Database data at cost based rates when they use such data to provide interexchange and exchange access service. This is CC Docket No. 01-338. See, FCC notice [PDF].
Friday, September 13
The House will meet at 9:00 AM for legislative business. No votes are expected past 2:00 PM.
9:00 AM - 5:00 PM. Day two of a two day conference hosted by the International Intellectual Property Institute (IIPI) titled "Specialized Intellectual Property Courts". See, IIPI release and online registration form. Location: Markey National Courts Bldg., 717 Madison Place, NW.
10:45 AM. Press conference associated with the International Intellectual Property Institute's (IIPI) conference titled "Specialized Intellectual Property Courts". Location: Court Room 203, Markey National Courts Bldg., 717 Madison Place, NW.
10:00 AM. The FCC's Network Reliability and Interoperability Council (NRIC) will hold a meeting. Location: FCC, 445 12th Street, SW, Commission Meeting Room.
Deadline to submit comments to the FTC regarding its proposed consent agreement with MSC Software Corporation. See, Agreement Containing Consent Order [22 pages PDF]. See, notice in Federal Register.
More News
9/4. Sen. William Frist (R-TN) and Sen. Pat Roberts (R-KS) introduced S 2902, the Mathematics and Science Education Excellence Act. The bill would create a grant program to promote mathematics and science education. It was referred to the Senate Committee on Health, Education, Labor, and Pensions.
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