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September 20, 2002, 9:00 AM ET, Alert No. 513.
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Senate Commerce Committee Approves Nanotechnology Bill
9/19. The Senate Commerce Committee approved S 2945, the 21st Century Nanotechnology Research and Development Act, by a voice vote. The bill was introduced by Sen. Ron Wyden (D-OR), Sen. Joe Lieberman (D-CT), Sen. George Allen (R-VA), and others, on September 17. See, Committee release.

Sen. Wyden stated in the Senate on September 17 that "This bill would authorize a coordinated interagency program that will support long term nanoscale research and development leading to potential breakthroughs in areas such as materials and manufacturing, nanoelectronics, medicine and healthcare, environment, energy, chemicals, biotechnology, agriculture, information technology, and national and homeland security. Building on the National Nanotechnology Initiative, the bill would authorize appropriations for research throughout the government while providing tools for better cross agency management and coordination." See, Cong. Rec., Sept. 17, 2002, at S8678.

The bill provides that "The President shall establish a National Nanotechnology Research Program." This Program would establish goals for nanotechnology research, invest in research and development programs, and provide interagency coordination.

The bill lists among its many findings that "Nanotechnology will provide structures to enable the revolutionary concept of quantum computing, which uses quantum mechanical properties to do calculation. Quantum computing permits a small number of atoms to potentially store and process enormous amounts of information. Just 300 interacting atoms in a quantum computer could store as much information as a classical electronic computer that uses all the particles in the universe, and today's complex encryption algorithms, which would take today's best super computer 20 billion years, could be cracked in 30 minutes."

The bill authorizes the appropriation of $476 Million in FY 2003 and $547 Million in FY 2004. The bill includes in its funding areas the following: "Nanoelectronics, optoelectronics, and magnetics".

Senate Commerce Committee Approves NSF Doubling Act
9/19. The Senate Commerce Committee approved S 2817, The National Science Foundation Doubling Act, by a voice vote. The bill was introduced by Sen. Ted Kennedy (D-MA), Sen. Ernest Hollings (D-SC), and others, on July 22, 2002.

Among the programs authorized by the bill are Information Technology, Nanoscale Science and Engineering, Math and Science Partnerships Initiatives, and the Science, Mathematics, Engineering, and Technology Talent Expansion Program.

The bill provides that the Information Technology program is "An information technology research program to support competitive, merit based proposals for research, education, and infrastructure support in areas related to cybersecurity, terascale computing systems, software, networking, scalability, communications, and data management."

The bill provides that the nanoscale program is "A nanoscale science and engineering research and education program to support competitive, merit based proposals that emphasize research aimed at -- (A) discovering novel phenomena, processes, materials, and tools that address grand challenges in materials, electronics, optoelectronics and magnetics, manufacturing, the environment, and healthcare; and (B) supporting new interdisciplinary centers and networks of excellence, including shared national user facilities, infrastructure, research, and education activities on the societal implications of advances in nanoscale science and engineering."

The Committee also approved by voice vote an amendment [2 pages in PDF] offered by Sen. Ron Wyden (D-OR) and Sen. Max Cleland (D-GA), that provides for a ten year retrospective report on and review of National Science Foundation (NSF) programs to promote participation of women, minorities, and persons with disabilities in science, mathematics and engineering fields.

Senate Commerce Committee Approves FTC Reauthorization Bill
9/19. The Senate Commerce Committee approved S 2946, the Federal Trade Commission Reauthorization Act of 2002, by a vote of 16-7. The bill was introduced by Sen. Byron Dorgan (D-ND) and Sen. Ernest Hollings (D-SC) on September 17. The bill reauthorizes the Federal Trade Commission (FTC) for FY 2003, 2004, and 2005.

The bill authorizes the appropriation in FY 2003 of $179 Million with approximately 1087 full time staff; in FY 2004 it authorizes $207 Million with approximately 1158 full time staff; and in FY 2005 it authorizes $224 Million with approximately 1208 full time staff.

The Senate Commerce Committee stated in a release that "The bill provides the FTC jurisdiction over telecommunications common carriers, allowing the FTC to use its expertise and enforcement powers to better protect consumers from the fraudulent advertising and deceptive business practices in this industry."

House Committees Hold Hearing on SS Numbers and Identity Theft
9/19. The House Judiciary Committee's Subcommittee on Immigration, Border Security, and Claims, and the House Ways and Means Committee's Subcommittee on Social Security held a joint oversight hearing titled "Preserving the Integrity of Social Security Numbers and Preventing Their Misuse by Terrorists and Identity Thieves".

See, prepared testimony of witnesses: James Lockhart (Deputy Commissioner of Social Security), Charisse Phillips (State Department), Robert Bond (Secret Service), Grant Ashley (Federal Bureau of Investigation), James Huse (Social Security Administration), Matthew Reindl, and Chris Hoofnagle (Electronic Privacy Information Center).

Second Circuit Affirms in Gerber v. Computer Associates
9/4. The U.S. Court of Appeals (2ndCir) issued its opinion in Gerber v. Computer Associates, affirming a $5.7 Million verdict against Computer Associates (CAI) in a shareholder action arising out of CAI's acquisition of another software company.

CAI is a large software company. In 1991 it acquired, by tender offer and follow up merger, another software company named On-Line Software International. Joel Gerber was an On-Line shareholder.

Gerber filed a complaint in U.S. District Court (EDNY) against CAI alleging that in acquiring On-Line, CAI paid more money per share to On-Line's Chairman and CEO than it paid to other shareholders, in violation of 15 U.S.C. §§ 78l(i), 78m(d)-(e), and 78n(d)­(f). Gerber sought class action status. The District Court certified the class. A jury of the District Court returned a verdict of $5.7 Million for the class. The District Court entered judgment on the verdict, and denied CAI's JMOL and other motions. The Appeals Court affirmed.

Senate Subcommittee Holds Hearing on Antitrust Enforcement
9/19. The Senate Judiciary Committee's Antitrust Subcommittee held an oversight hearing on enforcement of the antitrust laws. Charles James (Assistant Attorney General for the Antitrust Division) and Timothy Muris (FTC Chairman) both testified.

See, opening statement of Sen. Herb Kohl (D-WI), Chairman of the Subcommittee, opening statement of Sen. Mike DeWine (R-OH), the ranking Republican on the Subcommittee, and opening statement of Sen. Orrin Hatch (R-UT).

James addressed a wide range of topics in his prepared testimony, including criminal enforcement, merger reviews, gun jumping, the Microsoft case, the American Airlines case, and the case against software makers MathWorks and Wind River Systems. He also addressed globalization and coordination with the European Union. Finally, he covered recent Department of Justice (DOJ) analysis of intellectual property issues, remedies in merger enforcement, and coordinated effects.

Microsoft. James reviewed the post judgment history of the case, including settlement. He stated that "the proposed consent decree represents a complete and fully successful resolution of the case, in that it enjoins the conduct found to be unlawful, prevents recurrence of that conduct, and takes proactive steps to restore lost competition. Moreover, it provides for immediate relief, in that Microsoft agreed to be bound by the decree’s terms upon signature. Consequently, Microsoft has already modified its licensing practices to permit computer manufacturers to substitute competing middleware products for those provided as part of its operating system, modified its new XP operating system, and begun to release important interfaces and protocols that will enable third-parties to develop products and services that will interopperate with Windows."

FTC DOJ Clearance Agreement. James also touched on the ill fated clearance agreement between the FTC and DOJ, which was abandoned when Sen. Ernest Hollings (D-SC) threatened to cut budgets. James stated that "During its brief life, the agreement had reduced clearance to a one-day process, and for the first time in decades eliminated all pending clearance disputes. ... Much to our disappointment, the agreement had to be voided in May of this year due to the threat of budgetary reprisals against the agencies."

Intellectual Property. James also addressed IPR and antitrust, and the joint hearings held earlier this year by the FTC and DOJ. He stated that "In recent years intellectual property issues have arisen with increased frequency in our merger and civil conduct investigations and enforcement actions. While intellectual property and antitrust law share the common purpose of promoting dynamic competition and thereby enhancing consumer welfare, issues at the intersection of intellectual property and antitrust can be murky. More than ever before, the creation and dissemination of intellectual property is the engine driving economic growth.

"Consequently," said James, "as antitrust law addresses the competitive implications of conduct involving intellectual property, and as intellectual property law addresses the nature and scope of intellectual property rights, care must be taken to maintain proper incentives for the innovation and creativity on which our national economy depends."

He added that "Both we and FTC believed that a thorough review of the issues in this important area should be undertaken" and that "We expect to publish a report in 2003".

Muris also addressed intellectual property in his opening statement. He stated that "The continuing development of ``high tech´´ industries and the significance of intellectual property rights influence our antitrust agenda. The U.S. economy is more knowledge based than ever. While the fundamental principles of antitrust do not differ when applied to high tech industries, or other industries in which patents or other intellectual property are highly significant, the issues are often more complex, take more time to resolve, and require different kinds of expertise. To address these needs, we now have patent lawyers on staff, and we sometimes hire technical consultants in areas such as electrical engineering or pharmacology."

B2Bs. Muris also addressed business to business electronic market places. He stated that "the Commission has not formally taken enforcement action against any B2Bs since it closed its investigation of Covisint in September 2000, but we stand ready to take such action if an appropriate case arises."

He added that the FTC "views positively the development of B2Bs because of their potential to generate significant efficiencies for our economy, winning for customers lower prices, improved quality and greater innovation. At the same time, we are aware of B2Bs’ potential to inflict competitive harm. By their nature, B2Bs either bring together competitors in a collaborative environment, or constitute vertical collaborations between suppliers and purchasers in an industry or market. These arrangements may facilitate anticompetitive conduct, either in the markets for the goods and services traded on B2Bs (or derived from those traded on B2Bs), or in the market for marketplaces themselves." (Parentheses in original.)

Muris also discussed the FTC's Internet Task Force, and the Internet Competition Workshop. See also, FTC release.

More News
9/19. The House Commerce Committee's Subcommittee on Oversight and Investigations authorized the issuance of subpoenas in connection with the Committee's investigation into Global Crossing, Qwest and related entities. The subcommittee adopted a resolution, by a vote of 11-0, that provides, "the Chairman of the Committee on Energy and Commerce, with the concurrence of the Ranking Minority Member, may authorize and issue subpoenas to testify and subpoenas duces tecum to any person or entity in respect of matters involved in, relating to, or arising from the Committee’s investigation of Global Crossing Ltd., Qwest, and related entities."

9/19. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property held a hearing on HR 5119, the Plant Breeders Equity Act of 2002. See, opening statement of Rep. Howard Coble (R-NC), Chairman of the Subcommittee. See also, prepared testimony of witnesses: James Toupin (USPTO), Vincent Garlock (American Intellectual Property Law Association), Craig Regelbrugge (American Nursery & Landscape Association), and Peter DiMauro (International Center for Technology Assessment).

9/18. Research in Motion (RIM) filed a complaint in U.S. District Court (DDel) against Handspring alleging patent infringement. RIM makes wireless handheld communications products, including the Blackberry line. Handspring makes PDAs, including the Treo Organizers and Treo Communicators. RIM stated in a release that the complaint alleges that the Treo k180, Treo 270 and Treo 300 "infringe the claims of a patent associated with unique keyboard features implemented in RIM's" BlackBerry.

Friday, September 20
The House will not be in session.

8:30 - 10:00 AM. Harold Furchtgott Roth and Gregory Sidak of the American Enterprise Institute (AEI) will host a press breakfast titled "Is the FCC Moving Too Slowly?". The AEI states that this is a "media only" event. RSVP Veronique Rodman at vrodman or call Heather Dresser at 202 862-5884. Location: AEI, 11th Floor Conference Room, 1150 17th Street, NW.

9:30 AM - 12:30 PM. The FCC's Public Safety National Coordination Committee will meet. See, notice in Federal Register. Location: FCC, 445 12th Street, SW.

Tuesday, September 24
9:00 AM. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection will hold a hearing on HR 4678, the Consumer Privacy Protection Act of 2002, sponsored by Rep. Cliff Stearns (R-FL). Web cast. Location: Room 2322, Rayburn Building.

10:00 AM. The House Commerce Committee's Subcommittee on Oversight and Investigations will hold a hearing titled "Capacity Swaps by Global Crossing and Qwest: Sham Transactions Designed to Boost Revenues?" See, notice. Web cast. Press contact: Ken Johnson or Arturo Silva at 202 225-5735. Location: Room 2123, Rayburn Building.

10:00 AM. The Senate Judiciary Committee's Subcommittee on Judiciary Administrative Oversight and the Courts will hold a hearing on "the Washington, D.C. judicial circuit". Location: Room 226, Dirksen Building.

11:00 AM. The Cato Institute will host a policy forum titled "Digital Pearl Harbor: How Real Is the Cybersecurity Threat, and Who's Responsible Anyway?" The scheduled speakers include Howard Schmidt (Federal Office of Cybersecurity), Ken Silva (Verisign), Ira Parker (Genuity), and Scott Charney (Microsoft). See, notice and online registration page. Lunch will follow the program. Location: Cato, 1000 Massachusetts Ave., NW.

12:15 PM. The FCBA's Young Lawyers Committee will host a brown bag lunch to "discuss FCC's recent order mandating that consumer electronics manufacturers install digital television tuners in almost all new TVs, as well as TV interface devices such as VCRs". The scheduled speakers are Lynn Claudy (NAB), Michael Petricone (CEA), and Valerie Schulte (NAB). RSVP to Ryan Wallach at rwallach Location: Willkie Farr & Gallagher, 1875 K Street, NW.

CLOSED TO THE PUBLIC. 5:30 PM. Meeting of a legislative executive working group on the Foreign Sales Corporation (FSC) and Extraterritorial Income Exclusion Act (ETI) issue. Location: Room 211, Dirksen Building.

Deadline to submit opposition comments to the Copyright Office (CO) regarding the motion for stay filed by various broadcasters of the CO's final rule that provides that transmissions of a broadcast signal over a digital communications network are not exempt from copyright liability under 17 U.S.C. § 114(d)(1)(A). See, notice in the Federal Register.

Wednesday, September 25
10:00 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing on the transition to digital television. Web cast. Location: Room 2123, Rayburn Building.

12:15 PM. The FCBA's Online Communications Committee will host a brown bag lunch. The topic will be the Bush Administration's just released report titled "National Strategy to Secure Cyberspace". The speakers will be John Tritak (Director of the White House Critical Infrastructure Assurance Office) and Tom Orlowski (VP of Information Systems, National Association of Manufacturers). RSVP to bviera Location: Kelley Drye & Warren, 1200 19th St., Suite 500. 

Thursday, September 26
TIME? The House Judiciary Committee's Subcommittee on Court, the Internet and Intellectual Property will hold a hearing on HR 5211, sponsored by Rep. Howard Berman (D-CA). The bill is sometimes referred to as the "peer to peer piracy protection act", or as the "Berman bill".

10:00 AM. The Senate Judiciary Committee will hold a hearing to examine pending judicial nominations. Press contact: Mimi Devlin at 202 224-9437. Location: Room 106, Dirksen Building.

10:00 AM. The Senate Health, Education, Labor, and Pensions Committee will hold a hearings on web based education. Location: Room 430, Dirksen Building.

12:00 NOON. The FCBA will host a lunch. The speaker will be Duane Ackerman, CEO of BellSouth. The price to attend is $45 for members, $35 for government persons and law student members, and $55 for non-members. Registrations and cancellations are due by 5:00 PM on September 23. Location: Mayflower Hotel, 1127 Connecticut Avenue, State Ballroom.

3:00 PM. Niva Koren (University of Haifa Faculty of Law) will present at paper titled "Seizing Power in the Information Environment: The Comeback of the State", as a part of the George Washington University Law School Intellectual Property Workshop Series. For more information, contact Prof. Robert Brauneis at 202 994-6138. Location: Clinic Moot Court Room H 105, 716 20th Street, NW.

Friday, September 27
7:30 - 9:30 AM. The U.S. Chamber of Commerce will host a breakfast and panel discussion for technology professionals titled "Partnering Insights for Challenging Times". The scheduled speakers are Patrick Sweeney (ServerVault), Shane Oleson  (Keymind division of Axiom Resources Management), Tim Grimes (Siemens Enterprise Networks), and Val Sriban (META Group). See, notice and registration page. The price to attend is $35 for the general public, and $25 for members of Partnerpoint, the U.S. Chamber, and co-sponsoring organizations. Location: U.S. Chamber of Commerce, 1615 H Street, NW.

TIME? The Federal Accounting Standards Advisory Board (FASAB) will meet to discuss issues related inter-entity costs, the Credit Reform Task Force, and other matters. See, notice in Federal Register. Location: Room 2N30, GAO Building.

Deadline to submit reply comments to the FCC regarding WorldCom's August 8, 2002, petition for 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].

Deadline to submit reply comments to the Copyright Office (CO) regarding the motion for stay filed by various broadcasters of the CO's final rule that provides that transmissions of a broadcast signal over a digital communications network are not exempt from copyright liability under 17 U.S.C. § 114(d)(1)(A). See, notice in the Federal Register.

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