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March 11, 2003, 9:00 AM ET, Alert No. 620.
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Supreme Court Grants Certiorari in Verizon v. Trinko
3/10. The Supreme Court granted certiorari in Verizon v. Trinko, a case involving the application of Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2, in the context of telecommunications. The Court's Order List [14 pages in PDF], at page 4, states that "The petition for a writ of certiorari is granted limited to the following Question: ``Did the Court of Appeals err in reversing the District Court's dismissal of respondent's antitrust claims?´´" 

The law office of Curtis Trinko filed a complaint in U.S. District Court (SDNY) against Bell Atlantic (now Verizon), an incumbent local exchange carrier (ILEC), alleging that Verizon denied the customers of AT&T, Trinko's local phone service provider, equal access to its local network in violation of the anti-discrimination requirements of the Communications Act, codified at 47 U.S.C. § 202(a), and the interconnection requirements of the Communications Act, codified at 47 U.S.C. § 251 (b) and (c). Trinko also alleged violation of Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2. Finally, he alleged tortious interference with contract. Trinko sought class action status.

The District Court dismissed Trinko's claims. It held that he lacked standing to bring claims under the Communications Act; those claims belong to AT&T. It also held, based upon the Seventh Circuit's opinion in Goldwasser v. Ameritech, 222 F.3d 390 (7th Cir. 2000), that Trinko did not have an antitrust claim. Trinko appealed to the Court of Appeals.

The U.S. Court of Appeals (2ndCir) issued its opinion on June 20, 2002, affirming in part, vacating in part, and remanding. The Appeals Court held that Trinko lacked standing to sue under the Communications Act. It wrote that Verizon, "fulfilled its duties as an ILEC under subsections (b) and (c) of section 251 by entering into a state approved interconnection agreement with AT&T through the procedures described in section 252. While the defendant may have breached its obligations under the interconnection agreement, because its duties as an ILEC are directly defined by that agreement, there was no underlying violation of subsections (b) and (c) of section 251." (Footnote omitted.)

However, the Court of Appeals reversed the District Court's dismissal of the antitrust claim. That part of the Appeals Court opinion is the only issue in the present preceding before the Supreme Court.

The Appeals Court wrote that "In Goldwasser, the Seventh Circuit dismissed similar allegations of monopolistic conduct for two reasons. First, it found that the claim was "inextricably linked" to allegations by the Goldwasser plaintiff that section 251 of the Telecommunications Act had been violated. Thus, the claim was merely an allegation that the Telecommunications Act was violated and not a freestanding antitrust action. But there is no requirement that an allegation that otherwise states an antitrust claim must not rely on allegations that might also state a claim under another statute. Congress, of course, can indicate that such a statute provides an implicit immunity from the antitrust laws. Conduct that merely describes a violation of a statute that is meant to immunize a regulated industry from antitrust scrutiny could not support an antitrust action. But we do not lightly find that a statute provides such an implicit immunity."

The Court added that "There is no ``plain repugnancy´´ between the antitrust laws and the Telecommunications Act." The Court also concluded that "It is unlikely that allowing antitrust suits would substantially disrupt the regulatory proceedings mandated by the Telecommunications Act."

On December 16, 2002, the The Federal Trade Commission (FTC) and the Department of Justice (DOJ) filed a joint brief [26 pages in PDF], as amici curiae, urging the Supreme Court to grant the petition for writ of certiorari, and reverse the Second Circuit.

The amicus brief states that the question presented is "Whether, in reversing the dismissal of a complaint for failure to state a claim upon which relief may be granted under Section 2 of the Sherman Act, 15 U.S.C. 2, the court of appeals erred by relying on a standard of liability that does not require predatory or exclusionary conduct."

The brief elaborates that "The Second Circuit's decision in this case dramatically expands antitrust liability for failure to assist rivals. It conflicts with the decisions of other courts of appeals, including Goldwasser v. Ameritech Corp., 222 F.3d 390 (7th Cir. 2000), which held that ``similar allegations of monopolistic conduct´´ did not state a claim upon which relief may be granted. ... The Second Circuit’s decision is erroneous. And it will have significant practical consequences, particularly for the telecommunications industry as it adapts to the fundamental regulatory changes wrought by the Telecommunications Act of 1996."

The FTC/DOJ brief continues that "The 1996 Act requires incumbent telecommunications carriers to assist their rivals by providing them with access to their networks under legislatively and administratively developed conditions and formulae. [citing Verizon v. FCC] This Court has recognized the importance of that complex legislation and the industry it restructures by granting review in two cases raising statutory interpretation issues. See Verizon v. FCC, supra; AT&T v. Iowa Utils. Bd., 525 U.S. 366 (1999). This case raises similarly important issues. In the courts of appeals, the United States and the FCC have filed briefs as amici curiae urging, among other things, the rejection of any construction of the 1996 Act that would render it an implied repeal of the antitrust laws in this important sector of the economy. Well-established principles preclude recognition of such immunity absent clear repugnancy between the antitrust laws and a regulatory statute, Carnation Co. v. Pacific Westbound Conference, 383 U.S. 213, 218 (1966); Otter Tail Power Co. v. United States, 410 U.S. 366, 372-375 (1973), and any implied repeal would contravene the 1996 Act’s declaration that it should not ``be construed to modify, impair, or supersede the applicability of any of the antitrust laws.´´ See 47 U.S.C. 152 note. The Second Circuit in this case, like the Seventh Circuit in Goldwasser, correctly concluded that the 1996 Act does not immunize petitioner's conduct from scrutiny under the antitrust laws. ..."

"Nonetheless, the 1996 Act's imposition of new duties to assist rivals -- coupled with the increasing number of antitrust lawsuits predicated on alleged noncompliance with the 1996 Act -- have given new urgency to careful examination of the circumstances under which antitrust law requires a dominant firm to provide such assistance. The Second Circuit's decision unduly expands those circumstances by endorsing essential facilities and monopoly leveraging theories that are uncabined by any requirement that the challenged conduct be exclusionary or predatory -- i.e., that the refusal not make economic sense except as an effort to diminish competition. That approach improperly trivializes the antitrust laws and encourages litigants to seek antitrust remedies for ordinary commercial and regulatory disputes. The decision and the many lawsuits based on the theories it endorses, moreover, could threaten substantial disruption of the telecommunications industry. Accordingly, the petition for a writ of certiorari should be granted", the FTC/DOJ brief concludes.

ILECs are pleased with the Supreme Court's decision to review the Second Circuit's opinion. Lawrence Sarjeant, of the U.S. Telecom Association (USTA), a group that represents ILECs, such as Verizon, stated in a release that the "USTA is pleased that the Supreme Court has agreed to review the decision of the Second Circuit Court of Appeals in the Trinko case. USTA believes that the Second Circuit’s decision conflicts with well established Supreme Court precedent and if left uncorrected, could produce significant negative consequences for the telecommunications industry."

Similarly, BellSouth, another ILEC, stated in a release that "The lower court's decision would wrongly create a conflict between the antitrust law and the Telecommunications Act of 1996. The administrative framework of the Telecom Act was designed to handle the myriad disputes that come from contractual agreements between competitors that have been reached through compulsory good-faith negotiation and sometimes arbitration. We believe the Supreme Court should clarify that the Congressionally designated regulators, not juries, should resolve these complex disputes. The Act expressly provided that the newly articulated administrative standards would not 'modify' or otherwise extend the federal antitrust laws."

Supreme Court Denies Cert in Natron v. STMicroelectronics
3/10. The Supreme Court denied certiorari in Nartron v. STMicroelectronics, a trademark case involving the use of the term "smart power" in connection with semiconductors. See, Order List [14 pages in PDF], at page 6. The courts below ruled that "smart power" is a generic term in the semiconductor industry.

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.

Appeals Court. Nartron appealed to the U.S. Court of Appeals (6thCir), which issued its opinion affirming the District Court on October 1, 2002, on the grounds of genericness and laches. It wrote 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." It also found that Natron's eleven year delay in brining suit was too long.

See, story titled "6th Circuit Rules on "Smart Power" Trademark", TLJ Daily E-Mail Alert No. 521, October 2, 2002.

DOD Establishes Technology and Privacy Advisory Committee
3/10. The Department of Defense (DOD) published a notice in the Federal Register stating that it is establishing a Technology and Privacy Advisory Committee (TAPAC). The DOD stated that "The TAPAC will advise the Secretary of Defense concerning the legal and policy considerations implicated by the application of pattern queries/data correlation technology to counter-terrorism and counter-intelligence missions."

The notice also states that "The Panel will consist of up to 14 members selected on the basis of their preeminence in the fields of constitutional law and public policy relating to communication and information management."

On February 7, 2003, the DOD announced in a release that it "will establish two boards to provide oversight of the Total Information Awareness Project, the program designed to develop tools to track terrorists. The two boards, an internal oversight board and an outside advisory committee, will work with the Defense Advanced Research Projects Agency (DARPA), as it continues its research. These boards will help ensure that TIA develops and disseminates its products to track terrorists in a manner consistent with U.S. constitutional law, U.S. statutory law, and American values related to privacy."

The DARPA web site has described the TIA as a project that "will imagine, develop, apply, integrate, demonstrate and transition information technologies, components and prototype, closed-loop, information systems that will counter asymmetric threats by achieving total information awareness useful for preemption; national security warning; and national security decision making."

The DOD stated in February that the members of the outside advisory committee will include Newton Minow (Northwestern University), Floyd Abrams (Cahill Gordon & Reindel), Zoe Baird (President of the Markle Foundation), Griffin Bell (King & Spalding), Gerhard Casper (Stanford University Law School), William Coleman (Chief Customer Advocate of BEA), and Lloyd Cutler (Wilmer Cutler & Pickering).

For more information, contact Lisa Davis, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics), at 703 697-0051. See, Federal Register, March 10, 2003, Vol. 68, No. 46, at Page 11384.

People and Appointments
3/10. Secretary of Homeland Security Tom Ridge announced his intent to name Pamela Turner to be the Assistant Secretary for Legislative Affairs at the Department of Homeland Security. She is currently SVP for Government Relations at the National Cable and Telecommunications Association (NCTA).

3/10. Audrey Spivack was named Associate Director of the Federal Communications Commission's (FCC) Office of Media Relations. She worked for the FCC since 1976. See, FCC release [PDF].

3/10. Thomas Bennett was named to the newly created position of Assistant Inspector General for Universal Service Fund (USF) Oversight at the Federal Communications Commission (FCC). Thomas Cline was named Assistant Inspector General for Audits. Robert Shipp was named to the newly created position of Director of Contract and Performance Audits. See, FCC release [PDF].

More News
3/10. The Supreme Court denied a petition for rehearing in Eldred v. Ashcroft. See, Order List [14 pages in PDF], at page 11. On January 15, 2003, the Court issued its opinion [89 pages in PDF] upholding the constitutionality of the Copyright Term Extension Act, which retroactively extended the maximum duration of copyrights. This is No. 01-618. See, TLJ story titled "Supreme Court Upholds CTEA in Eldred v. Ashcroft", January 15, 2003.

3/10. Intel announced in a release that it has "invested in four companies involved in Wi-Fi technology". The companies are rovingIP.net, a clearinghouse for Wi-Fi service providers, Vivato, a Wi-Fi switch manufacturer, Broadreach Networks Limited, a broadband internet access provider, and Pronto Networks, a provider of carrier-class OSS solutions for large hot spot networks

3/10. The Federal Communications Commission (FCC) announced that it has amended Section 1.17 of its rules to prohibit written and oral statements of fact that are intentionally incorrect or misleading and written statements of fact that are made without a reasonable basis for believing that the statement is correct and not misleading. See, FCC release [PDF].

Tuesday, March 11
The House will meet at 12:30 PM for morning hour and at 2:00 PM for legislative business. The House will consider several non tech related items under suspension of the rules. Votes are postponed until 6:30 PM.

Day two of a two day annual meeting of the Advanced Television Systems Committee (ATSC). At 9:00 AM, Nancy Victory, Director of the National Telecommunications and Information Administration (NTIA), will speak. At 9:15 AM, Eddie Fritts (NAB) will speak. At 9:30 AM, Robert Sachs (NCTA) will speak. At 9:45 AM, Gary Shapiro (CEA) will speak. At 1:45 PM, there will be a panel discussion titled "Speeding to Digital". The participants will be Richard Wiley (Wiley Rein & Fielding), Rick Chessen (FCC), Michael McEwen (CDTV), Leonardo Ramos (Televisa Mexico), and Jungsun Seol (South Korea Ministry of Information and Communications). See, full agenda [PDF]. Location: Grand Hyatt Hotel, 1000 H Street, NW.

8:30 AM - 5:00 PM. The National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB), which was previously named the Computer System Security and Privacy Advisory Board (CSSPAB), will meet. This is the first day of a three day meeting. See, agenda in notice in the Federal Register, February 28, 2003, Vol. 68, No. 40, at Pages 9638 - 9639. Location: NIST, Bethesda Hyatt Regency Hotel, 7400 Wisconsin Avenue, Bethesda, MD.

9:00 AM - 3:45 PM. The National Institute of Standards and Technology's (NIST) Advanced Technology Program Advisory Committee will meet. See, notice in the Federal Register, February 28, 2003, Vol. 68, No. 40, at Page 9638. Location: NIST, Administration Building, Lecture Room B, Gaithersburg, Maryland.

9:30 AM. The Information Policy Institute will host a news conference title "Media Concentration and Local Markets". For more information, contact Michael Turner at 212 629-4557 Location: National Press Club, Holeman Lounge, 529 14th St. NW, 13th Floor.

2:00 PM. The House Judiciary Committee's Crime Subcommittee will meet to hold a hearing, and then a markup session, on two bills, including HR 1161, the Child Obscenity and Pormography Prevention Act. Webcast. Location: Room 2141, Rayburn Building.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Ranger Cell v. FCC, No. 02-1093. Judges Ginsburg, Edwards and Garland will preside. Location: 333 Constitution Ave., NW.

6:00 - 8:00 PM. The Federal Communications Bar Association's (FCBA) Legislative Committee will host a reception for members of the House and Senate Commerce Committees. See, registration form [PDF] for prices. Location: Room 106, Dirksen Building.

Extended deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking, (FNPRM), released last month, regarding whether providers of various services and devices not currently within the scope of the FCC's 911 rules should be required to provide access to emergency services. This is CC Docket No. 94-102 and IB Docket No. 99-67. See, notice in the Federal Register, January 23, 2003, Vol. 68, No. 15, at Pages 3214 - 3220, and notice of extension.

TIME? Phil Bond, Under Secretary of Commerce for Technology, will participate in a panel discussion at the Conference on Nanotechnology on "Implications for U.S. Economic Growth -- The Global Nanotech Race" at the Woodrow Wilson International Center. For more information, contact Connie Correll at 202 482-1065. Location: Ronald Reagan Building, One Woodrow Wilson Plaza, 1300 Pennsylvania Ave., NW.

Wednesday, March 12
8:30 AM - 5:00 PM. The National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB), which was previously named the Computer System Security and Privacy Advisory Board (CSSPAB), will meet. This is the second day of a three day meeting. See, agenda in notice in the Federal Register, February 28, 2003, Vol. 68, No. 40, at Pages 9638 - 9639. Location: NIST, Bethesda Hyatt Regency Hotel, 7400 Wisconsin Avenue, Bethesda, MD.

10:30 AM - 12:30 PM. The Federal Communications Commission's (FCC) Wireless Telecommunications Bureau will host a forum to present a new license search interface that will be available for the public to access Multi-point Distribution Service/Instructional Television Fixed Service (MDS/ITFS) License data. Location: FCC, 6th Floor (South Conference Room), Room B516, 445 12th Street, SW.

Rescheduled for March 21. 12:15 PM. The Federal Communications Bar Association's (FCBA) Transactional Practice Committee will host a brown bag lunch. The topic will be FCC antitrust merger reviews. The speakers will include Jim Bird (head of the Federal Communications Commission's (FCC) Office of General Counsel's (OGC) Transactional Team) and Jim Barker (Latham & Watkins). For more information, contact Lauren Kravetz at 202 418-7944 or lkravetz@fcc.gov. This event had originally been scheduled for February 19, but was postponed due to snow.

12:15 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host a brown bag lunch. The title of the program is "The Role of In House Counsel". The speakers Bob Calaff (T-Mobile USA), Melissa Newman (Qwest Communications), Bob Beizer (Gray Television), and Jim Coltharp (Comcast). For more information contact Yaron Dori at ydori@hhlaw.com or Ryan Wallach at rwallach@willkie.com. Location: Willkie Farr & Gallagher, 1875 K St., NW.

2:00 PM. The Senate Judiciary Committee will hold a hearing on pending judicial nominations: Comac Carney (to be Judge of the U.S. District Court for the Central District of California), James Selna (Central District of California), Philip Simon (Northern District of Indiana), Theresa Springmann (Northern District of Indiana), Mary Ellen Williams (Federal Claims), and Victor Wolski (Federal Claims). See, notice. Location: Room 226, Dirksen Building.

Deadline to submit applications to the Department of Commerce (DOC) to participate in "Information and Communications Technologies Business Development Mission" to Northern Ireland and the Republic of Ireland on April 6-11, 2003. The DOC stated that this mission will offer "Numerous opportunities for trade and partnership in e-commerce, telecommunications, electronics, and software. Also opportunities for partnership in R&D in lab and university and cross-border initiatives." See, notice and application form [PDF].

Thursday, March 13
8:30 AM - 2:00 PM. The National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB), which was previously named the Computer System Security and Privacy Advisory Board (CSSPAB), will meet. This is the third day of a three day meeting. See, agenda in notice in the Federal Register, February 28, 2003, Vol. 68, No. 40, at Pages 9638 - 9639. Location: NIST, Bethesda Hyatt Regency Hotel, 7400 Wisconsin Avenue, Bethesda, MD.

9:00 AM. The House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property will hold a hearing titled "International Copyright Piracy: Links to Organized Crime and Terrorism". Webcast. Location: Room 2141, Rayburn Building.

9:30 AM. The Senate Judiciary Committee will hold a hearing titled "Setting the Record Straight: The Nomination of Justice Priscilla Owen". See, notice. Location: Room 226, Dirksen Building.

9:30 AM. The Senate Commerce Committee will meet in executive session to vote on pending nominations and legislation. Location: Room 253, Russell Building.

9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. See, agenda. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

10:00 AM. The House Financial Services Committee will meet to mark up several bills, including HR 21, the Unlawful Internet Gambling Funding Prohibition Act of 2003. See, release. Press contact: Peggy Peterson at 202 226-0471. Location: Room 2128, Rayburn Building.

12:15 PM. The Federal Communications Bar Association's (FCBA) Common Carrier Practice Committee will host a brown bag lunch. The speakers will be Policy Division Chief & Deputies. No RSVP is required. Location: Willkie Farr & Gallagher, 1875 K St., NW.

2:00 PM. The House Government Reform Committee's Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census will hold a hearing titled "Federal E-Government Initiatives: Are We Headed in the Right Direction?" The scheduled witnesses are Mark Forman (Office of Management and Budget), Joel Willemssen (General Accounting Office), David McClure (The Council for Excellence in Government), and Leonard Pomata (webMethods). Press contact: Bob Dix at 202 225-6751. Location: Room 2154, Rayburn Building.

Friday, March 14
9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Rainbow Push Coalition v. FCC, No. 02-1020. Judges Ginsburg, Edwards and Garland will preside. Location: 333 Constitution Ave., NW.

10:00 AM - 1:00 PM. The Federal Communications Commission's (FCC) Homeland Security: Network Reliability Council VI will meet. FCC Chairman Michael Powell and Qwest Ch/CEO Richard Notebaert will chair the meeting. See, notice [PDF]. Webcast. Location: FCC, Room TW-C305 (Commission Meeting Room), 445 12th Street, SW.

12:00 NOON - 2:00 PM. The Progress and Freedom Foundation (PFF) will host a panel discussion titled "The Content, Tech & Telecom Industries Examine Intellectual Property". The panelists will include Jeffrey Campbell (Cisco Systems), Sarah Deutsch (Verizon), and Mitch Glazer (Recording Industry Association of America). See, notice. Register to attend by contacting Stefannie Bernstein at 202 289-8928 or sbernstein@pff.org or David Fish at dfish@pff.org. Location: Room 1539, Longworth Building.

Monday, March 17
9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Trans Intelligence v. FCC, No. 02-1098. Judges Ginsburg, Edwards and Garland will preside. Location: 333 Constitution Ave., NW.

Day one of a three day conference titled "Open Source for National and Local eGovernment Programs in the U.S. and EU". See, agenda. For more information, contact Tony Stanco at 202 994-5513 or Stanco@seas.gwu.edu. Location: George Washington University, The Marvin Center Grand Ballroom, 800 21st Street, NW.

Deadline to submit comments to the Federal Communications Commission (FCC) regarding its notice of proposed rulemaking (NPRM) pertaining to the service rules for the Dedicated Short Range Communications Systems in the 5.850-5.925 GHz band (5.9 GHz band). See, notice in the Federal Register, January 15, 2003, Vol. 68, No. 10, at Pages 1999-2002. For more information, contact Nancy Zaczek at 202 418-7590 or nzaczek@fcc.gov, or Gerardo Mejia at 202 418-2895 or gmejia@fcc.gov.

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