|EU Releases Report on US Barriers to Trade
|11/21. The European Commission released a
report [PDF] titled "Report on United
States Barriers to Trade and Investment". The report states that the U.S.
imposes barriers to trade that disadvantage EU companies in a wide range of
areas. Several of these barriers affect technology sectors, such as intellectual
property laws (which fail to protect moral rights of authors, allow a first to
invent defense to patent infringement, and allow a homestyle exemption), the
encryption export rule, international tax policy (FSC/ETI regime), and technical
barriers (such as state regulations and labeling rules).
This is the 18th such report. It was
written by the Market Access Unit of the Directorate General for Trade in
cooperation with the Delegation of the European Commission in Washington DC.
"Despite the significant co-operative efforts undertaken, a
considerable number of impediments, ranging from more traditional tariff and
non-tariff barriers, to differences in the legal and regulatory systems still
need to be tackled", the report states. "One of the most disquieting aspects of US policy is that
domestic pressure to adopt protectionist measures appears to be stronger than
willingness to seek internationally agreed solutions. The poor US record of
``prompt compliance““ of WTO Dispute settlement recommendations, and the actions
recently taken on steel and agriculture, illustrate this."
Pascal Lamy (at right) stated in a
summarizing the report that "Tackling bilateral
trade obstacles is essential to transatlantic confidence building.
It is therefore important to advance in the
Positive Economic Agenda adopted at the
EU-US summit in May 2002."
Copyright: Moral Rights. The report identifies several
barriers to trade based in U.S. copyright law. First, it complains about the U.S.
failure to protect the moral rights of authors. The report states that "Despite
the unequivocal obligation contained in
Article 6bis of the Berne Convention,
to which the US acceded in 1989, to make ``moral rights““ available for authors,
the US has never introduced such rights and has repeatedly announced that it has
no intention to do so in the future. It is clear that while US authors benefit
fully from moral rights in the EU, the converse is not true, which leads to an
imbalance of benefits from Berne Convention membership to the detriment of the
European side. It is noted that the US has ratified and implemented the
World Intellectual Property
Organisation (WIPO) Copyright Treaty and the
WIPO Performances and
Phonograms Treaty. Adherence to these Treaties by the US requires
legislation on moral rights at least for performers."
In another matter, Professor
gave a lecture titled "Copyright and Human Rights" at the George
Washington University Law School in Washington DC on November 21. She addressed
moral rights law
in the UK and EU. However, TLJ does not quote from her lecture or 64 page
paper, because of a "do not quote or distribute" request. (Persons
interested in this paper may wish to contact Suthersanen at the
Queen Mary Intellectual Property Research
Institute in London, at +44 (0)20 7882 5923 or
email@example.com, or the
event organizer, Professor Robert Brauneis, at
firstname.lastname@example.org or 202
Copyright: Homestyle Exemption. Second, the report
complains about 17 U.S.C.
§ 110(5), which provides for a homestyle exemption to an
author's exclusive rights -- that is, playing of homestyle radios and TVs in
bars, stores and restaurants without payment of royalties. The report states that
this "practice has caused a serious deprivation of income to EU right-holders,
as a large number of commercial establishments do not pay any royalty fees.
Moreover, the incomplete copyright protection in the US has broader economic
effects negatively affecting the overall position of authors on the US market."
Patent: First to Invent Defense. The report also states that "the
``first-to-invent““ principle governing US
patent registration continues to create considerable interface problems for EU
companies, not to speak of the financial effects of high administrative and
litigation costs in patent matters." This principle was added to the
Patent Act by the American Inventors Protection Act of 1999.
Encryption Related Barriers. The report also finds fault with the
Department of Commerce's (DOC) Bureau of Industry and Security's (BIS)
encryption export rule, which was liberalized in 2000. The report states that "This new rule could pose potential problems such as a different treatment
for use by government bodies, Internet and telecommunications service providers
for which existing or new restrictions apply. The notion of ``US subsidiaries““ in
Section 740.17 could create a competitive
disadvantage for European firms based in the US (especially for the
development of new products), as they will have their products ``technically
reviewed““. Furthermore, a ``supplementary information““ provision is required for
foreign companies to apply for Encryption Licensing Arrangements (ELAs) in order
to obtain treatment equivalent to that extended to foreign subsidiaries of US
parent companies. The generalised introduction of the technical review of
encryption products above a certain key length in advance of sale creates a
difficulty for the European industry for cases of re-export."
The EC report continues that "The newly created
rules applicable to retail encryption commodities and software, in particular
the eligibility criteria (functionality, sales volume, distribution methods,
ability to modify products and the level of support by the supplier), will
probably be subject to divergent interpretations. The effect of the Cryptography
Note, as introduced in the Wassenaar Arrangement, is reduced by the US
authorities through the introduction of two new requirements: ``crypto
functionality should not be modified or customised““ and ``the items cannot be
network infrastructure products such as high end routers or switches designed
for large volume communications““. The latter items still need to be licensed."
It concludes that "The practical effects of this remain to be seen. A combination
of the continuing constraints on the export of strong encryption products and on
the interoperability of systems employing such technology inhibits not only
trade in encryption products but also, more importantly, the effective growth of
e-commerce. Moreover, many modern encryption techniques are patented and
licenses may be required to allow sales of European products in the US. Thus,
significant barriers to international trade in encryption products without key
recovery continue to exist." (Parentheses in original.)
Tariff Barriers on Optical Fiber and Computer Tubes.
The report states that "With regard to information technology (IT) products, the
Information Technology Agreement (ITA)
providing for the complete elimination of tariffs by the year 2000 on a large
number of products was implemented as of July 1997. The main elements of the new
US tariff structure eliminate tariffs on all semiconductors, computers, computer
peripherals and computer parts, electronic calculators, telecommunication
equipment, electronic components (capacitors, resistors, printed circuits),
semiconductor testing and manufacturing equipment and certain consumer
electronic items. Although tariffs on optical fibre cables were eliminated under
the ITA, the US refused to do the same for optical fibres on which they maintain
a rather substantial protection. Tubes for computer monitors are excluded also.
Attempts to broaden the scope and coverage of products of the ITA in the form of
the ITA II have so far failed." (Parentheses in original.)
The report also complains about some of the more obvious, though not
technology related, barriers to trade, such as the Byrd Amendment, the 2002 farm
act, and restraints on steel imports.
|Zoellick Discusses Trade in the Phillipines
|11/21. U.S. Trade Representative (USTR)
Robert Zoellick participated in a
press conference at the meeting of ASEAN Economic Ministers in Manila, The
He stated that "the next step would be, before having a free trade agreement,
would be to have a bilateral trade investment framework agreement to lay the
groundwork and to work through some of the issues and explore on both sides the
degree of interest. We have TIFA's with the Philippines, Thailand and Indonesia
and our friends from Brunei have expressed an interest in developing one."
He also again stated that not being on the intellectual property watch list is not
a prerequisite for a free trade agreement (FTA) with the U.S. He stated that "We don't have a list of
prerequisites ... we actually have a free trade agreement with Israel and Israel
is on our watchlist. So there's no prerequisite. And we're negotiating free trade
agreements with 34 countries in the western hemisphere and many of them are on
He also stated that "we're not saying that every trade agreement has to look like the one with
Singapore". The U.S. and Singapore announced an agreement in substance for an
FTA earlier this week.
|DOJ and Microsoft Pick Settlement Watchers
|11/21. The Department of Justice (DOJ)
filed a motion
with the U.S. District Court (DC) in
the antitrust case, USA v. Microsoft, requesting that Harry Saal and Franklin
Fite be appointed Members of the Technical Committee, as provided in in Section
IV of the Court's Final Judgment.
The DOJ selected Saal. Microsoft selected Fite. The DOJ, the settling states,
and Microsoft, all agree to both appointments.
The DOJ described Saal's background in its
in Support. It stated that "Saal has extensive experience in a variety of senior
management and technical positions with both "start-ups" and large technology
firms. Most notably, he was founder and Chief Executive Officer of Network
General Corporation (now Network Associates, Inc.), which was the first company
dedicated to network diagnostics, as well as founder of Nestar Systems,
Incorporated, which was one of the first companies to specialize in local area
network systems for personal computers." (Parentheses in original.)
The DOJ also stated that Fite "previously was employed as a supervisor for
the Software Process Laboratory at AT&T Bell Laboratories, and also worked for
Microsoft from 1992 to 2000 as a Director for the Windows CE Operating System
and a General Manager for the Windows CE Platforms. Most recently, Mr. Fite
served as President and Chief Technology Officer of Nimble Technology, a
``start-up““ enterprise software company that develops and sells XML-based data
|Thanksgiving Publication Schedule
|The Tech Law Journal Daily E-Mail Alert will not be published on Wednesday, November
27, Thursday, November 28, or Friday, November 29.
|Friday, November 22
|Deadline to submit comments to the
ultrawideband report [110 pages in PDF] titled "Measured Emissions Data For Use In
Evaluating The Ultra-Wideband (UWB) Emissions Limits in the Frequency Bands
Used By The Global Positioning System". See also, FCC
public notice [3 pages in PDF]. The report was prepared by Stephen Jones
of the FCC's Office of Engineering and
Technology. He can be contacted at 301 362-2054 or
SKJones@fcc.gov. This is ET Docket No.
DEADLINE EXTENDED TO DECEMBER 9.
Deadline to submit comments to the The
in response to its requests for comments regarding whether to revise, clarify
or adopt any additional rules in order to more effectively carry out
Congress's directives in the Telephone Consumer Protection Act of 1991 (TCPA).
notice in the Federal Register. See,
of extension [PDF].
Deadline to submit a request to participate in roundtable meetings hosted
by the U.S. Patent and Trademark Office (USPTO)
regarding small business views on foreign patent challenges. The USPTO
is seeking comments, and holding roundtable meetings, pursuant to a
recommendation contained in a General Accounting
Office (GAO) report
[PDF] titled "Federal Action Needed to Help Small Businesses Address Foreign
Patent Challenges". This report was released on August 22, 2002. See also,
story titled "GAO Reports Foreign Patent Challenges Facing Small Businesses"
in TLJ Daily
E-Mail Alert No. 497, August 23, 2002. See,
notice in the Federal Register, October 28, 2002, Vol. 67, No.208, at
Pages 65786 - 65787.
|Monday, November 25
|Deadline to submit comments to the The
National Telecommunications and Information Administration (NTIA)
regarding the product recall notices exception to the Electronic Signatures in
Global and National Commerce (E-SIGN) Act. The Act provides, at §101, for the
acceptance of electronic signatures in interstate commerce, with certain
enumerated exceptions. §103 of the Act provides that "The provisions of
section 101 shall not apply to ... (2) any notice of ... (D) recall of a
product, or material failure of a product, that risks endangering health or
safety". The Act also requires the NTIA to review, evaluate and report to
Congress on each of the exceptions. See,
notice in the Federal Register.
|Tuesday, November 26
|2:00 - 4:00 PM. The Bureau of Industry
and Security's (BIS) National Infrastructure Advisory Council (NIAC) will
hold a partly open, and partly closed, meeting. The NIAC advises the President
on the security of
information systems for critical infrastructure supporting other sectors of
the economy, including banking and finance, transportation, energy,
manufacturing, and emergency government services. The agenda of this meeting
includes deliberation regarding comments received on the draft document
titled "National Strategy to Secure Cyberspace". (Comments were due by
November 18.) The scheduled speakers include Richard Davidson (Director of NIAC), Richard Clarke,
Juster (Director of BIS). For more information contact Eric Werner at 202
notice in the
federal register. Location: Truman Room, White House Conference Center, 726
Jackson Place, NW.
|Wednesday, November 27
|The Tech Law Journal Daily E-Mail Alert will not be published, for a
|Thursday, November 28
|Thanksgiving Day. The FCC will be closed. The TLJ Daily E-Mail Alert
will not be published.
|Friday, November 29
|The TLJ Daily E-Mail Alert will not be published.
Deadline to submit comments to the Commerce Department's
Bureau of Industry and Security (BIS),
formerly known as the Bureau of Export Administration (BXA), in response to
its request for comments on its foreign policy based export controls set forth
in the Export Administration Regulations (EAR). This pertains to, among other
things, high performance computers and encryption products. See,
notice in the Federal Register, September 27, 2002, Vol. 67, No. 188, at
Pages 61047 - 61049.
|SBC Offers UNE Proposal to FCC
|11/18. SBC Communications representatives
met with Federal Communications Commission
(FCC) officials to propose the "Establishment of a two year transitional
wholesale offering for serving residential customers that is functionally
equivalent to the UNE-P at a rate of $26 per month. CLECs could migrate new
residential customers under this wholesale offering during the transition period
for a non-recurring charge of $10.00. Existing UNE-P customers migrated to $26
rate over twelve months." See,
notice of ex parte communication [PDF].
SBC further stated that "Upon the effective date of the Triennial Review
Order, ILECs would no longer be required to provide UNE-P to serve business
customers. Resale, as well as facilities based competition utilizing unbundled
loops, would remain available. Parties would remain free to negotiate business
to business facilities leasing arrangements."
SBC President William Daley stated in a
that "We have offered to the Commission a reasonable framework that will help
bring certainty back into the market, establishes a healthy model for
sustainable competition and which promotes investment in the nation's telecom
CompTel opposed the proposal. It stated
in a release that
"SBC's UNE transition proposal should be rejected by policymakers. It is a clear
attempt by SBC to remonopolize the local phone market. SBC's proposal would lead
to higher prices for consumers and pre-empt state regulatory authority to
determine the appropriate price competitors must pay to access key parts of the
The Consumer Federation
of America stated in a release that "This price is nearly
double the price set in many states like New York and Illinois
where real local phone competition is just beginning to
flourish. In the 1996 Telecommunications Act, Congress
recognized that state regulators are best positioned to
determine local market conditions and to set network
availability and pricing. The FCC should not usurp state
regulator's authority just as consumers are beginning to see the
benefits of local phone competition."
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