Tech Law Journal Daily E-Mail Alert
October 22, 2002, 9:00 AM ET, Alert No. 532.
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Legislators Introduce Tech Related Bills
10/22. Representatives and Senators introduced many technology related bills last week. However, the Congress is not likely to pass many more bills in the 107th Congress. The new 108th Congress will meet in January 2003, at which time bills may be re-introduced.

On October 16, Rep. Ed Markey (D-MA), Rep. Henry Waxman (D-CA), Rep. John Dingell (D-MI), Rep. Howard Berman (D-CA), and Rep. Michael Capuano (D-MA) introduced HR 5646, a bill pertaining to the privacy of individually identifiable health information. The bill was referred to the House Commerce Committee, the House Ways and Means Committee, and the House Education and Workforce Committee.

On October 16, Rep. Dave Camp (R-MI) and Rep. Benjamin Cardin (D-MD) introduced HR 5658, a bill to amend the Internal Revenue Code of 1986 to provide an alternative simplified credit for qualified research expenses. It was referred to the House Ways and Means Committee.

On October 16, Rep. Chris John (D-LA) introduced HR 5671, a bill to promote the secure sharing of information and communications within the Department of Homeland Security. It was referred to the House Government Reform Committee.

On October 16, Rep. James Sensenbrenner (R-WI) introduced HR 5685, a bill to prohibit the Federal Communications Commission (FCC) from requiring digital television tuners in television receivers. It was referred to the House Commerce Committee.

On October 16, Rep. Diane Watson (D-CA) introduced HR 5689, a bill to authorize the appropriation of $1 Million for a contribution to the World Intellectual Property Organization (WIPO) for projects intended to promote the integration of developing countries into the global intellectual property system. The bill was referred to the House International Relations Committee.

Rep. Honda Introduces Nanotech Bill

10/16. Rep. Mike Honda (D-CA) introduced HR 5669, the Nanoscience and Nanotechnology Advisory Board Act of 2002. Rep. Honda issued a release [PDF] which states that the bill would "establish an independent advisory board, comprised of leaders from industry and academia, to advise the President of the United States and Congress on research investment strategy, policy, objectives, and oversight related to the federal government’s National Nanotechnology Initiative (NNI)."

Rep. Honda stated that "The federal government’s nanotechnology strategy must have clear goals and metrics to assess our country’s progress. Additionally, nanotechnology will give rise to a host of novel social, ethical, philosophical, and legal issues. It will be important to have a group in place to predict and work to alleviate anticipated problems."

The bill was referred to the House Science Committee.

Sen. McCain Introduces Telecom Ownership Diversification Bill

10/15. Sen. John McCain (R-AZ) introduced S 3112, the Telecommunications Ownership Diversification Act of 2002. This bill amends the Internal Revenue Code of 1986 to provide for a deferral of tax on gain from the sale of telecommunications businesses in specific circumstances or a tax credit and other incentives to promote diversity of ownership in telecommunications businesses. It was referred to the Senate Finance Committee.

Sen. McCain stated that "This legislation is designed to ensure that new entrants and small businesses will have the chance to participate in today's telecommunications marketplace. At a time when the telecommunications industry is economically depressed, this bill promotes the entry of new competitors and small businesses into the field by providing carefully limited changes to the tax law."

He explained that "This legislation would give sellers of telecommunications businesses a tax deferral when their assets are bought for cash by small business telecom companies. It would also encourage the entry of new players and the growth of existing small businesses by enabling the seller of a telecom business to claim a tax deferral on capital gains if it invests the proceeds of any sale of its business in purchasing an interest in an eligible small telecom business." See, Congressional Record, October 15, 2002, at S10446.

Federal Communications Commission (FCC) Chairman Michael Powell released a statement [PDF]. He commented that "I applaud and welcome Senator John McCain's on-going and consistent efforts to encourage and facilitate new entry, including women and minorities, into the telecommunications industry. Senator McCain has consistently shown great leadership in his commitment to creating an incentive structure to promote greater inclusiveness in our media and communications delivery sectors and I wholeheartedly support this effort."

Powell concluded that "We must all look for new tools that will promote opportunity for new entry into telecommunications businesses. This tax based incentive system, designed to provide such opportunity while avoiding some of the problems of past programs, would be a welcome addition to the toolbox."

A copy of the bill is in the Congressional Record, October 15, 2002, at S10447-9

People and Appointments
10/21. Greg Jenner was named Deputy Assistant Secretary for Tax Policy. He has been acting Deputy Assistant Secretary since July 8, 2002. Pam Olson remains the Assistant Secretary for Tax Policy. Jenner previously was a partner in the Tax and Legislative Groups at Venable Baetjer Howard & Civiletti. Before that he worked for Price Waterhouse Coopers. During the first Bush administration he worked for the Assistant Secretary for Tax Policy. Before that, he worked for the Senate Finance Committee. See, Treasury release.
Supreme Court Tech News

10/22. The Supreme Court denied certiorari in two technology cases -- TechSearch v. Intel, patent infringement case involving microchip technology, and Hugh Symons Group v. Motorola, a state deceptive trade practices act case involving microprocessors. The Court also invited the Solicitor General to submit a brief in Micrel v. Linear Technology, a patent infringement case involving the on sale bar.

On October 21, the Supreme Court denied a petition for writ of certiorari in TechSearch v. Intel, No. 02-262, a patent infringement case arising in the U.S. District Court (NDCal) involving TechSearch's U.S. Patent No. 5,574,927, titled "RISC Architecture Computer Configured for Emulation of the Instruction Set of a Target Computer". On April 11, 2002, the U.S. Court of Appeals (FedCir) issued its opinion affirming the District Court's judgment of non-infringement. See, Supreme Court Order List [PDF], October 21, 2002, at page 12.

On October 15, the Supreme Court denied a petition for writ of certiorari in Hugh Symons Group v. Motorola, No. 02-313. See, Supreme Court Order List [PDF], October 15, 2002, at page 3.

Plaintiff filed a diversity complaint in U.S. District Court (WDTex) against Motorola alleging violation of Texas's Deceptive Trade Practices Act (DTPA) in connection with allegations that Motorola breached an oral contract, and acted fraudulently and with negligent misrepresentation regarding the quality, grade, and characteristics of its MPC 821 microprocessor. Plaintiff had considered using the MPC 821 in the production of a hand held computer.

The District Court granted summary judgment to Motorola on the grounds that plaintiff was not a consumer within the meaning of the DTPA because it had over $25 million in gross assets (see, § 17.44 of the DTPA), that plaintiff failed to satisfy the statute of frauds, and that the tort claims sounded in contract and failed because there was no breach of contract. On May 28, 2002 the U.S. Court of Appeals (5thCir) issued its opinion affirming the District Court.

On October 15, the Supreme Court invited the Office of the Solicitor General to submit a brief in Micrel v. Linear Technology, a patent infringement case involving the on sale bar. This is No. 02-39. See, Supreme Court Order List [PDF], October 15, 2002, at page 1.

Linear Technology filed a complaint in U.S. District Court (NDCal) against Micrel alleging infringement of U.S. Patent No. 4,755,741, which pertains to adaptive transistor drive circuitry used in telecommunications, cell phones and computers. The District Court held the patent invalid due to the on-sale bar. 35 U.S.C. § 102(b) provides that "A person shall be entitled to a patent unless ... (b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States". On December 28, 2001, the U.S. Court of Appeals (FedCir) issued its opinion reversing the District Court.

McCain & Feingold Propose Vouchers for Broadcast Political Ads

10/16. Sen. John McCain (R-AZ), Sen. Russ Feingold (D-WI), and Sen. Richard Durbin (D-IL) introduced S 3124, the Political Campaign Broadcast Activity Improvements Act, a bill to amend the Communications Act of 1934 to create a Federal Communications Commission (FCC) run voucher program for the broadcast of political ads.

The FCC would disperse up to $650 Million in vouchers to candidates and up to $100 Million to parties, starting in 2004. The amounts would be adjusted upwards to account for inflation in future years.

The program would be funded by a tax on broadcast spectrum. The bill provides that "The Commission shall assess, and collect annually, a spectrum use fee based on a percentage of a broadcasting station's gross revenues in an amount necessary to carry out the provisions of this section." However, the bill exempts public broadcasting stations.

The bill would require that broadcast stations "broadcast at least 2 hours per week of candidate centered programming or issue centered programming during each of the 6 weeks preceding a Federal election, including at least 4 of the weeks immediately preceding a general election" and "not less than 1 hour of such programming was broadcast in each of those weeks during the period beginning at 5:00 p.m. and ending at 11:35 p.m. ..."

The bill would also revise and expand the lowest unit cost provision applicable to political campaign broadcasts.

Sen. Feingold stated that the bill requires "broadcast stations to devote a reasonable amount of air time to election programming. It would also direct the FCC to create a voucher system in which candidates and parties would receive vouchers they could use for paid radio or TV advertising time financed by a broadcast spectrum usage fee. Candidates would qualify for vouchers based on a ratio matched to the amount of small dollar donations they raise." See, Congressional Record, October 16, 2002, at S10586.

The bill was referred to the Senate Commerce Committee. A copy of the bill is in the Congressional Record, October 16, 2002, at S10583-6.

More News

10/21. Ericsson Wireless Communications, Lucent Technologies, Motorola, and Nortel Networks each signed contracts with China United Telecommunications Corporation (aka China Unicom) to supply code division multiple access (CDMA) 2000 1x equipment. Commerce Secretary Don Evans stated in a release that "These signings are a tangible example of the vital trade relationship between the United States and China ... We believe that these projects in petrochemicals, telecommunications, energy, and other sectors will help enhance U.S. China trade relations and the well-being of people in both countries." See also, Ericsson release, Lucent release, Motorola release, and Nortel release.

10/21. The Department of Justice's Antitrust Division published a notice in the Federal Register regarding the Proposed Final Judgment and Competitive Impact Statement in U.S. v. Mathworks and Wind River Systems. See, Federal Register, October 21, 2002, Vol. 67, No. 203, at Pages 64657 - 64666.

10/17. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection held a hearing titled "ECNs and Market Structure: Ensuring Best Prices for Consumers". Electronic Communications Networks (ECN) are electronic trading systems that automatically match buy and sell orders at specified prices. See, opening statement of Rep. Cliff Stearns (R-FL), the Chairman of the Subcommittee. See also, prepared statements of witnesses: Kevin Foley (CEO of Bloomberg Tradebook), Kevin O'Hara (General Counsel of Archipelago), Robert Gasser (CEO of NYFIX Millennium), William O'Brien (General Counsel of Brut), and Michael Ryan (General Counsel of the American Stock Exchange).

Tuesday, October 22
The Association for Maximum Service Television (MSTV) will host its 16th Annual DTV Conference. At 9:00 AM. FCC Chairman Michael Powell will deliver the opening keynote address. Press contact: David Fiske at 202 418-0513. Location: Park Hyatt Hotel, 1201 24th Street NW, Ballrooms B-C.

11:00 - 11:45 AM. The FCBA's International Communications Committee, and others, will host a fee based teleconference titled "The ITU Plenipotentiary 2002: What Happened and How it affects You". The scheduled participants include David Gross (State Department), Clovis Baptista (Executive Director of CITEL), Andrei Makarof (Russian telecom consultant), and Valerie d'Costa (Singapore). Susan Ness (former FCC Commissioner) will moderate. The price is $15 or $20. For more information, contact Norma Rosado at 202 662-1727 or rosadon

Wednesday, October 23
12:00 NOON - 1:30 PM. The Heritage Foundation will host a panel discussion titled "Pirates and Posses: The Battle Over Digital Copyright". The speakers will be Bruce Mehlman (Commerce Department's Technology Administration), Gary Shapiro (Consumer Electronics Association), Alec French (Minority Counsel, House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property), James Delong (Competitive Enterprise Institute), and James Gattuso (Heritage). See, notice. Location: 214 Massachusetts Ave NE.
Thursday, October 24
12:15 PM. The FCBA's Cable Practice Committee will hold a brown bag lunch. The speaker will be Susan Eid, Legal Advisor to FCC Chairman Michael Powell. RSVP to Wendy Parish. Location: NCTA, 1724 Mass Ave., NW.

12:15 PM. The FCBA's Young Lawyers Committee will hold a brown bag lunch. The topic will be "The Role of Industry Associations in Advocacy at the FCC and Congress". The speakers will include Mike Altschul (CTIA), Dan Brenner (NCTA), and others. RSVP to rwallach Location: Willkie Farr & Gallagher, 1875 K St., NW, 2nd Floor.

3:00 PM. Jessica Litman (Wayne State University Law School) will present a draft of a paper titled "Digital Networks in the Public Domain". The lecture is sponsored by the George Washington University (GWU) Law School's Dean Dinwooodey Center for Intellectual Property Studies. For more information, contact Prof. Robert Brauneis at 202 994-6138 or by email. Location: GWU Law School, Burns Building, 5th Floor, Faculty Conference Center, 720 20th St., NW.

3:30 PM. Gideon Parchomovsky will give a lecture titled "Toward an Integrated Theory of Intellectual Property". For more information, contact Prof. Julie Cohen at jec@law. Location: Georgetown University Law Center, Faculty Lounge, 600 New Jersey Ave., NW.

6:00 - 8:00 PM. The FCBA's will host an Oktoberfest reception featuring the FCC's Bureau Chiefs.

Friday, October 25
8:00 AM - 3:15 PM. The National Science Foundation's Advisory Committee for Computer and Information Science and Engineering will hold a meeting. For more information, contact Gwen Blount at 703 292-8900. See, notice in Federal Register, October 8, 2002, Vol. 67, No. 195, at Page 62834. Location: Hilton Arlington and Towers, Master Ballroom, 950 N. Stafford Street, Arlington, VA.

10:00 AM - 12:30 PM and 2:00 - 4:00 PM. The FTC and the DOJ's Antitrust Division will hold the final workshops in their joint series titled "Competition and Intellectual Property Law and Policy in the Knowledge Based Economy" on October 25 and 30 and November 6. The October 25 event is titled "Competition, Economic, and Business Perspectives on Patent Quality and Institutional Issues: Competitive Concerns, Prior Art, Post Grant Review, and Litigation". Location: FTC, Room 432, 600 Pennsylvania Ave., NW.

Deadline for the DOJ's Antitrust Division to release its evaluation of BellSouth's Section 271 application with the FCC to provide in region interLATA service in the states of Florida and Tennessee. This is WC Docket No. 02-307.

Deadline to submit reply comments to the FCC in response to Qwest Communications' Section 271 application to provide in region interLATA service in the states of Colorado, Idaho, Iowa, Montana, Nebraska, North Dakota, Utah, Washington and Wyoming. This is WC Docket No. 02-314. See, FCC release [PDF].

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