Tech Law Journal Daily E-Mail Alert
October 2, 2002, 9:00 AM ET, Alert No. 521.
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House Approves Unlawful Internet Gambling Funding Prohibition Act
10/1. The House passed HR 556, the Unlawful Internet Gambling Funding Prohibition Act, by a voice vote after a brief debate.
Many legislators have been trying for several Congresses to pass legislation aimed at limiting Internet gambling. While Sen. Jon Kyl (R-AZ) has had success moving legislation in the Senate in the past, this is the first time that the full House has passed a bill. The Senate has not yet passed HR 556.
Rep. Bob Goodlatte (R-VA) has tried for years to pass a bill in the House. In this Congress, he is the sponsor of HR 3215, the Combating Illegal Gambling Reform and Modernization Act. However, the bill just passed by the House is a more narrow and targeted bill sponsored by Rep. James Leach (R-IA) and reported by the House Financial Services Committee (HFSC). It is directed only at financial instruments used in connection with Internet gambling.
HR 556 provides, in part, that "No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person in unlawful Internet gambling (1) credit, or the proceeds of credit, extended to or on behalf of such other person (including credit extended through the use of a credit card); (2) an electronic fund transfer or funds transmitted by or through a money transmitting business, or the proceeds of an electronic fund transfer or money transmitting service, from or on behalf of the other person; (3) any check, draft, or similar instrument which is drawn by or on behalf of the other person and is drawn on or payable at or through any financial institution; or (4) the proceeds of any other form of financial transaction as the Secretary may prescribe by regulation which involves a financial institution as a payor or financial intermediary on behalf of or for the benefit of the other person."
The HFSC approved the bill by a vote of 34-18 on October 31, 2001. See, story titled "House Committee Passes Internet Gambling Funding Bill" in TLJ Daily E-Mail Alert No. 299, Nov. 1, 2001. See also, HFSC release of October 1, 2002.
USTR Zoellick Addresses Trade, Tech, and IPR
10/1. U.S. Trade Representative Robert Zoellick gave a speech [PDF] titled "Globalization, Trade, and Economic Security" in Washington DC. He stated that "A free and open trading system is critical to many of the most competitive sectors of the U.S. economy. ... America's dynamic high tech sector depends on exports, with $189 billion in foreign sales last year. Software producers earn over half of all their revenue overseas."
He also reviewed a proposal that he and the trade ministers of Indonesia and Singapore announced back in April. He stated that "We announced a new U.S. trade proposal, the ``integrated tariff initiative,´´ which would not only open duty free trade in certain information technology products, but also eliminate burdensome processing rules. By incorporating this initiative within our soon to be completed free trade agreement with Singapore, we can connect Indonesia to the global sourcing network of international business, drawing investment and creating jobs."
He also used the occasion to promote a ten point plan named "America's Trade Agenda". One item in the plan is to "stimulate American and global innovation and creativity by upgrading intellectual property rules to match technological innovation, insisting on enforcement, and assisting developing countries with special needs."
USTR Robert ZoellickZoellick (at right) also spoke about the broader benefits of free trade. He said that "Free trade agreements can help establish the basic building blocks for sustainable development, including private property rights, competition, the rule of law, societal gains from the transmission of ideas and technology, sectoral reforms, and regional integration. Most importantly, free trade is about freedom and open societies. These values are at the heart of America's larger reform and development agenda. The U.S. free trade agenda can help fragile democracies in Central America and Southern Africa, and other developing nations, just as U.S. trade policy after World War II helped secure democracy and hope in Western Europe and Japan. From Johannesburg to San Salvador, America is opening a new pathway to promote prosperity, the rule of law, and liberty."
NTIA Seeks Comments on Family Law Documents Exception to E-SIGN Act
10/1. The National Telecommunications and Information Administration (NTIA) published a notice in the Federal Register announcing that it is seeking public comments on the domestic and family law documents exception to the E-SIGN Act.
The Electronic Signatures in Global and National Commerce (E-SIGN) Act provides, at Section 101, for the acceptance of electronic signatures in interstate commerce, with certain enumerated exceptions. Section 103 of the Act provides that "The provisions of section 101 shall not apply to ... a State statute, regulation, or other rule of law governing adoption, divorce, or other matters of family law". The Act also requires the NTIA to review, evaluate and report to Congress on each of the exceptions.
The deadline to submit written comments to the NTIA regarding this exception is December 2, 2002. See, Federal Register, October 1, 2002, Vol. 67, No. 190, at Pages 61599 - 61601.
This is the fourth notice in a series. On September 3, the NTIA published a pair of notices in the Federal Register regarding two other exceptions -- court records and hazardous materials notices. The deadline for comments on those exceptions is November 4. See also, NTIA release, notice in Federal Register, September 3, 2002, Vol. 67, No. 170, at Pages 56277 - 56279, regarding court records, and notice in Federal Register, September 3, 2002, Vol. 67, No. 170, at Pages 56279 - 56281, regarding hazardous materials notices. On September 24, the NTIA published a notice in the Federal Register that it is seeking public comments on the product recall notices exception. See, Federal Register, September 24, 2002, Vol. 67, No. 185, at Pages 59828 - 59830.
Congressional Hearings
10/1. The House Government Reform Committee's Subcommittee on Technology and Procurement Policy held a hearing titled "Ensuring Coordination, Reducing Redundancy: A Review of OMB's Freeze on IT Spending at Homeland Security Agencies". See, prepared testimony [15 pages in PDF] Joel Willemssen, Managing Director for Information Technology Issues of the General Accounting Office (GAO), titled "Homeland Security: OMB's Temporary Cessation of Information Technology Funding for New Investments".
10/1. The House Commerce Committee's Subcommittee on Telecommunications and the Internet held a hearing titled "Recording Industry Marketing Practices: A Check-Up". See, prepared testimony of witnesses: Lee Peeler (Deputy Director of the Federal Trade Commission's Bureau of Consumer Protection), Michael Rich (American Academy of Pediatrics), Hilary Rosen (Recording Industry Association of America), Gary Severson (Wal Mart Stores), John Marmaduke (Hastings Entertainment), and Russell Simmons (Hip-Hop Summit Action Network).
10/1. The House Commerce Committee's Subcommittee on Oversight and Investigations held a hearing titled "Capacity Swaps by Global Crossing and Qwest: Sham Transactions Designed to Boost Revenues?" See, prepared testimony of witnesses: Lenette Crumpler, Gary Winnick (Chairman of Global Crossing), Jim Gorton (former General Counsel of Global Crossing), Dan Cohrs (CFO of Global Crossing), Joe Perrone (EVP of Finance of Global Crossing), David Walsh (former P/CEO of Global Crossing), Joseph Nacchio (former Ch/CEO of Qwest), Afshin Mohebbi (P/COO of Qwest), Peter Hellman (Chairman of the Audit Committee of Qwest), Oren Schaffer (VP/CFO of Qwest).
6th Circuit Rules on "Smart Power" Trademark
10/1. The U.S. Court of Appeals (6thCir) issued its opinion in Natron v. ST, a trademark case regarding the use of the term "smart power" in connection with semiconductors. The Appeals Court ruled that "smart power" is a generic term in the semiconductor industry, and hence, affirmed a grant of summary judgment to a semiconductor producer that had been sued for trademark infringement.
Background. Nartron makes electronic devices including sensors, acoustic devices, displays, controls, harnesses and connectors, lamps, flashers and switches. STMicroelectronics (ST) makes semiconductors, including products that combine power and intelligence on a single integrated circuit chip.
Nartron began using "Smart power" in 1978. It obtained a federally registered trademark for "Smart power" for "electrical relay assemblies in combination with electrical logic components and parts thereof" in 1982. Nartron broadened the identification of its goods to "electrical power circuits in combination with electrical logic circuits and parts thereof" in 1986.
ST has used "smart power" since 1988. So have others in the semiconductor industry. It is used to refer to technology that combines power transistors and control circuitry on a single integrated circuit.
District Court. Narton filed a complaint in 1998 in U.S. District Court (EDMich) against ST alleging wilfull infringement in violation of 15 U.S.C. §§ 1051-1127, unfair competition in violation of 15 U.S.C. § 1125(a); dilution of the distinctive and valuable quality of the "Smart power" trademark in violation of 15 U.S.C. § 1125(c), and unfair competition and trademark infringement in violation of Michigan common law.
ST moved for summary judgment on Narton's trademark infringement claim on the grounds that "smart power" is a generic term not subject to protection, and that Narton's suit is barred by the doctrine of laches, due to its unreasonable delay of 11 years in filing suit. The District Court granted summary judgment to ST on both grounds. This appeal followed.
Appeals Court. The Court of Appeals affirmed. First, as to genericness, the Appeals Court reasoned that "A generic term can never function as a trademark. ... On the other hand a term that is ``merely descriptive´´ may be used as a trademark if it has acquired a secondary meaning. Thus, in considering Nartron's challenge of ST's use of ``smart power´´ as used in connection with ST's products in the semiconductor industry ... the crucial question is whether there is a genuine issue of material fact as to whether the term is a generic (i.e., common descriptive) or ``merely descriptive´´ term." (Citations and footnotes omitted. Parentheses in original.)
The Court continued that "A generic term is one that is commonly used as the name of a kind of goods ... Unlike a trademark, which identifies the source of a product, a generic term merely identifies the genus of which a particular product is a species". It also wrote that the appropriate test is whether the relevant public perceives the term primarily as the designation of the article." (Citations omitted.)
The Court concluded that "ST produced overwhelming evidence, which Nartron failed to rebut, that the term ``smart power,´´ as used by ST and other participants in the semiconductor industry, denotes a type of technology, not goods associated with Nartron." (Emphasis in original.)
Second, as to laches, the Appeals Court wrote that "Nartron failed to rebut ST's evidence demonstrating that, for eleven years, ST had constantly and continuously used the term ``smart power,´´ and totally rejected every one of Nartron's requests to stop using the term." In determining whether the length of the delay was unreasonable, the Appeals Court referred to the Michigan state law statute of limitations for injury to personal property, which is three years.
Qwest Refiles Long Distance Application for Nine States
9/30. Qwest Communications refiled its Section 271 application with the Federal Communications Commission (FCC) to provide in region interLATA service in the states of Colorado, Idaho, Iowa, Montana, Nebraska, North Dakota, Utah, Washington and Wyoming. See, Qwest release.
The FCC announced that comments are due by October 15, 2002, and that reply comments are due by October 25, 2002. This is WC Docket No. 02-314. See, FCC release [PDF].
More News
10/1. The Supreme Court granted certiorari in Zapata Industries, Inc. v. W.R. Grace & Co. - Conn., No. 01-1766. See, Order List [PDF.]
10/1. The Supreme Court denied NextWave's motion for leave to file a supplemental appendix (and raise additional arguments) in FCC v. NextWave. See, Order List [PDF.] Oral argument will be heard on October 8.
10/1. Federal Reserve Board (FRB) Governor Susan Bies gave a speech titled "The Challenge for Corporate Governance Posed by Financial Innovation" at the Carnegie Endowment for International Peace in Washington DC. She stated that "Just as financial innovations spawned a variety of risk management tools for businesses, they have also been responsible, in part, for changes in the structure of equity ownership. Along with advances in computer processing power that have facilitated the management of ever larger portfolios, an increasing awareness among investors of the value of portfolio diversification has led to a dramatic secular rise in the share of equity that is held by institutional investors on behalf of households."
10/1. The Securities and Exchange Commission (SEC) filed a civil complaint in U.S. District Court (DMass) against Arthur Goodwin, William Burke and Christopher Whalen alleging revenue recognition fraud in violation of Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(5) of the Securities Exchange Act of 1934 and Exchange Act Rules 10b-5, 12b-20, 13a-13 and 13b2-1. The complaint states that the three were officers of Interspeed, Inc., a now defunct Massachusetts Internet equipment provider. See also, SEC release.
9/19. Michael Powell, Chairman of the Federal Communications Commission (FCC) gave a speech [PDF] to the National Summit on Emerging Tribal Economies in Phoenix, Arizona. He discussed, among other topics, telecommunications in Indian Country, and the benefits of broadband. He stated that " With a sufficient technology infrastructure, Indian Country can take advantage of many of the economic realities of rural life to become competitive in any number of technology industries. Independent professional workers working from reservations via broadband facilities could constitute an attractive workforce for both tribal and non-tribal companies. Broadband infrastructure deployed to support tribal entrepreneurs will allow them to gain access to business information once reserved only to the largest multinational corporations."
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Notices & Disclaimers
Copyright 1998 - 2002 David Carney, dba Tech Law Journal. All rights reserved.
Wednesday, October 2
The House will meet at 10:00 AM for legislative business. The agenda includes several non tech related matters. See, Whip Notice.
7:30 AM. Rep. Sherwood Boehlert (R-NY) and Sen. Ron Wyden (D-OR) will speak at an event titled "Cybersecurity Initiatives: Challenges for Agencies and Opportunities for Businesses", hosted by the Breakfast Series. Location: The Ritz Carlton, 1700 Tysons Blvd., McLean, VA.
8:00 AM. NueStar will host a press conference and breakfast titled ".USe-Gov Breakfast". For more information, contact Denise Henning at 571 434-5762. Location: Zenger Room, National Press Club, 529 14th St. NW, 13th Floor.
10:00 AM. The Senate Judiciary Committee will hold a hearing titled "Stopping Child Pormography: Protecting our Children and the Constitution". See, notice. Location: Room 226, Dirksen Building.
11:00 AM. The Consumers Union (CU), Consumer Federation of America (CFA), and National Association of State Utility Consumer Advocates (NASUCA) will host a press briefing on "possible actions by the Senate and the FCC that have the potential of raising consumer phone rates and eliminating competition in telecommunications". The speakers will be Gene Kimmelman (CU) and  Mark Cooper (CFA), and Charles Acquard (NASUCA). Press contact: David Butler (CU) 202 462-6262. Location: Room SC-4, Capitol Building.
1:30 - 3:30 PM. The FCC's WRC-03 Advisory Committee Informal Working Group 7: Regulatory Issues and Future Agendas will meet. Location: Boeing Company, Arlington, VA.
Thursday, October 3
The House will meet at 10:00 AM for legislative business. The agenda includes several non tech related matters. See, Whip Notice.
9:00 AM. Rep. Sherwood Boehlert (R-NY) will give a speech to the National Research Council Board on Science, Technology and Economic Policy (STEP) Conference titled "Public Private Partnerships: Partnering Against Terrorism". He will focus on cybersecurity. Location: National Academies Building, 2100 C Street, NW.
10:00 AM - 12:00 NOON. The AEI Brookings Joint Center will host an event titled "High Stakes Antitrust: The Clinton Legacy". Location: Stein Room, Brookings Institution, 1775 Massachusetts Ave., NW.
10:00 AM. The Senate Judiciary Committee will hold a business meeting. See, notice. Press contact: Blythe McCormick at 202 224-9437. Location: Room 226, Dirksen Building.
11:00 AM. Rep. Rick Boucher (D-VA) and Rep. John Doolittle (R-CA) will hold a press conference to announce the "introduction of legislation to reaffirm fair use rights in the digital era". Press contact: Alyssa Mastromonaco at 202 225-3861. Location: Room 2218, Rayburn Building.
1:00 - 3:00 PM. The FCC's Office of Engineering and Technology will host a tutorial titled "Free Space Optical Communications". FSO is the practice of transmitting information, or data by means of modulated beams of light through the atmosphere, rather than through fiber optical cables. John Schuster, CTO of Terabeam Corporation, will speak. See, notice [PDF]. Location: FCC, Commission Meeting Room (TW-C305), 445 12th Street, SW.
The George Mason University (GMU) Tech Center and the Federalist Society will host a one day conference on cyber crime. Registration is free, except for persons seeking CLE credit, who must pay $50. A continental breakfast and buffet lunch will be provided. See, notice. Location: GMU School of Law, 3301 Fairfax Drive, Arlington, VA. 
Friday, October 4
Target adjournment date for the House and the Senate.
The House will meet at 9:00 AM for legislative business. The agenda includes several non tech related matters. See, Whip Notice.
9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Seven Company Services, Inc. v. FCC, No. 01-1326. This is a petition for review of a final order of the FCC regarding 47 U.S.C. § 224 (Section 703 of the 1996 Act) and rates, terms and conditions of access for attachments by cable operators and telecommunications carriers to utility poles, ducts, conduits and rights of way. See, FCC order [78 pages in PDF in three parts: 1 | 2 | 3] titled "Consolidated Partial Order on Reconsideration", released on May 25, 2001. This in the proceedings titled "In the Matter of the Commission's Rules and Policies Concerning Pole Attachments" (CS Docket No. 97-98), and "In the Matter of the Implementation of Section 703(e) of the Telecommunications Act of 1996" (CS Docket No. 97-151). Judges Edwards, Rogers and Garland will preside. Location: 333 Constitution Ave., NW.
9:30 - 10:45 AM. Paul Gallant (Chair of the FCC's Media Ownership Working Group) will participate on a panel titled, "Media Ownership and the Public Interest: The Role of the FCC" at a Consumer Federation of America's conference on energy and communications regulation. Location: Radisson Barcelo Hotel.
12:15 PM. The FCBA's Wireless Committee will host a luncheon titled "Wireless Industry Consolidation: Is It Needed? Will It Happen?" The scheduled speakers are Chris Murphy (Consumers Union), Rudy Baca (Precursor Group), and Lauren Patrich (FCC Commercial Wireless Division). The price to attend is $15. RSVP to wendy Registrations and cancellations due by 5:00 PM on October 1. Location: Sidley Austin, 1501 K Street, NW, Conference Room 6E. 
Monday, October 7
The Supreme Court will return from its recess, which it began on June 28, 2002.
12:00 NOON. The FCBA's Engineering and Technical Practice Committee will hold a brown bag lunch to discuss committee planning and priorities for the rest of the year. Location: Paul Hastings, 1299 Pennsylvania Ave., NW, 10th floor.
2:00 - 4:00 PM. The FCC will hold an en banc hearing on "the current state of the telecommunications sector and to discuss steps needed to restore its financial health". See, notice [PDF]. Location: FCC, Commission Meeting Room (TW-C305), 445 12th St., SW.
Extended deadline for the U.S. International Trade Commission (USITC) to complete its investigation titled "Certain Integrated Circuits, Processes for Making Same, and Products Containing Same". This is the USITC's Investigation No. 337-TA-450. See, notice in the Federal Register.
Tuesday, October 8
The Supreme Court will hear oral argument in FCC v. Nextwave, Case No. 01-653, and Arctic Slope Corp. v. Nextwave, Case No. 01-657.
Day one of a three day public workshop hosted by the FTC to "explore how certain state regulations and private business practices may be having significantly anticompetitive effects on e-commerce". See, FTC release. Location: FTC, 600 Pennsylvania Ave., NW.
12:15 PM. The FCBA's Professional Responsibility Committee will hold a brown bag lunch to discuss the scheduling of committee events and activities for the upcoming year. For More Information: Frank Montero. No RSVP is required. Location: Arnold & Porter, 555 12th Street, NW.
12:30 PM. Tom Donahue, P/CEO of the U.S. Chamber of Commerce, will give a luncheon address. Location: National Press Club, Ballroom, 529 14th St. NW, 13th Floor.
10:00 AM. The Copyright Office (CO) will hold a status conference regarding data format and delivery for record keeping requirements to be established by the CO for the Section 112 and 114 statutory licenses. See, notice [PDF].